April 26, 2006 -- Hundreds of soldiers wounded in battle in Iraq have found themselves fighting off bill collectors on the home front, according to a report to be released tomorrow. The draft report by the Government Accountability Office, which ABC News obtained, said that hundreds of wounded soldiers had military debts incurred through no fault of their own turned over to collection agencies.
"Financial friendly fire," said Rep. Tom Davis, R-Va., chairman of the House Committee on Government Reform. "Because their financial records are so bad, this is a friendly fire where we are hurting and wounding our own."
Army specialist Tyson Johnson of Mobile, Ala., had just been promoted in a field ceremony in Iraq when a mortar round exploded outside his tent, almost killing him.
"It took my kidney, my left kidney, shrapnel came in through my head, back of my head," he recounted.
His injuries forced him out of the military, and the Army demanded he repay an enlistment bonus of $2,700 because he'd only served two-thirds of his three-year tour.
When he couldn't pay, Johnson's account was turned over to bill collectors. He ended up living out of his car when the Army reported him to credit agencies as having bad debts, making it impossible for him to rent an apartment.
"Oh, man, I felt betrayed," Johnson said. "I felt like, oh, my heart dropped."
Payroll Errors, Says Military
And there are many more like Johnson. Staff Sgt. Ryan Kelly lost his leg in a roadside bomb attack in Iraq.
He didn't realize it, but the Army continued to mistakenly pay him combat bonus pay, about $2,000, while he was in the hospital rehabilitating, and then demanded that he pay it back.
He, too, was threatened by the Army with debt collectors and a negative credit report.
"By law, he's not entitled to the money, so he must pay it back," said Col. Richard Shrank, the commander of the United States Army Finance Command.
The Army said it moved wounded soldiers out of the battlefield so quickly its accounting office could not keep up, resulting in numerous payroll errors.
"This is no way to win a war, I can tell you that," said Davis. "You'd think after four years after fighting a war in Iraq, the government would have its act together."
But the Army said it is now trying to correct the problem. Since ABC News first reported on the plight of soldiers, featuring Johnson and Kelly in a "Primetime" investigation in October 2004, the Army has forgiven most of their debts.
But Davis said there may be thousands more whose thanks for putting their lives on the line has been a knock on the door from a Pentagon debt collector.
ABC News' Maddy Sauer contributed to this report.