War Profiteering

VA, Prudential Made Secret Deal

Could this resonate as much as the Walter Reed scandal? Bloomberg reports that since 1999, Prudential Financial Inc. has had a secret agreement with the U.S. Department of Veterans Affairs that allows it to withhold lump-sum payments of life-insurance benefits to the family of fallen soldiers—so that Prudential can invest that money and keep whatever money it makes for itself. The arrangement was completely secret for 10 years until it was put into writing in 2009. “Every veteran I’ve spoken with is appalled at the brazen war profiteering by Prudential,” says the executive director of Veterans for Common Sense. Survivors who request lump-sum payments are sent “checkbooks”—essentially, IOUs that aren’t insured by the FDIC—instead of actual checks. Prudential makes eight times as much through the investments as what it pays in interest to beneficiaries.