evidence of record; and that, although it was undiagnosed, it wasn't to a compensable degree.

It was announced this morning that the VA will be reviewing only category four, and that's not manifest on active duty or within the two year period. However, it makes sense not only to review all of these categories, but to provide the veteran with an opportunity to present additional evidence to support a claim which is not in the claims folder.

And I'm not quite sure of the VA's rationale of only going with category four because, if I could, I'd like to discuss these other categories. If the illness was not chronic during that two year period, there's nothing to say that that illness is not chronic today. And I don't understand why the VA's not reviewing those.

an

Again, the same thing is true if it was not shown by the record during that two year period, who's to say that today it wouldn't demonstrate that this veteran is now suffering from undiagnosed disability at a compensable level. And the same with the fact that it wasn't compensable at the time during that two year period.

All those categories certainly should be reviewed. With regards to category three, I'm somewhat concerned and confused. According to the VA, this category includes a condition that's undiagnosed and became manifested to a compensable degree but has an intercurrent cause or is due to the willful misconduct or alcohol or drug abuse.

I'm not a doctor nor am I an expert on undiagnosed illnesses, but I don't understand how you can say that you don't know what this person is suffering from, but you do know what has caused it. And I believe that what we're seeing here is something very akin to what our concerns are with regards to the smoking regulations.

And you know, the VA hangs their hat on the fact that this veteran may be abusing alcohol or may be abusing drugs. And the same is going to hold true with regards to smoking. It's a convenient way to deny a claim just because one of these elements are involved.

One of the frustrating aspects of dealing with Gulf War Illness is the medical community's desire to provide a diagnosis for these veterans' illnesses. Physicians are trained to provide a diagnosis. In other words, to pigeon hole the problem with their best guess. And that's category one, where there's a diagnosed illness.

Again, we believe that these should be reviewed for the same reasons. These need to be looked at now to determine whether or not those diagnoses were proper at the time and whether this veteran now has these symptoms considered to be Persian Gulf Illness.

Finally, adjudicating Persian Gulf War claims at the four regional offices has adversely impacted upon the adjudication of the local veterans' claims. These claims are being transferred out to other offices. It's creating a logistic nightmare for our service officers to keep tabs on their local veterans' claims.

Again, I think the VA's movement to decentralize will certainly take care of that problem.

The DAV supports the decentralization of the Persian Gulf claims and we're pleased to see that the VA will be focusing on a

nationwide training program for its rating specialists and adjudicators to provide them with the expertise that will be needed to adjudicate these claims.

Like you, Mr. Chairman, if it's possible, I'm sure DAV would like to have its people present to monitor these training sessions.

That concludes my statement and I'd be pleased to answer any questions.

[The prepared statement of Mr. Violante, w/attachment, appears on p. 78.]

Mr. QUINN. Thanks. We'll make that request for you to see if you could join or anyone else who is interested during those training sessions on behalf of all the VSO's. And Michael or somebody from the office will get back to you later.

Mr. VIOLANTE. Thank you.

Mr. QUINN. Mr. Puglisi.

STATEMENT OF MATTHEW PUGLISI, ASSISTANT DIRECTOR, NATIONAL VA AND REHABILITATION COMMISSION, THE AMERICAN LEGION

Mr. PUGLISI. Thank you, Mr. Chairman. And good morning to you and distinguished members of the subcommittee. And the American Legion appreciates the opportunity to offer testimony today regarding the processing of Persian Gulf War claims by the Department of Veterans Affairs.

We commend you, Mr. Chairman, for convening this hearing. The topic of Persian Gulf claims has received little media attention, but it's an important issue that lies at the heart of how the Federal Government aids disabled veterans of the Gulf War.

This hearing comes in the midst of a massive review of Gulf War undiagnosed illness claims by VA because of earlier widespread processing errors and the recent extension of the presumptive period.

This review and the extension of the presumptive period, although welcome by the American Legion, both exacerbate the inherent flaw of Gulf War environmental hazards processing system, of which undiagnosed illness claims are a major subset.

And that's the centralized processing of these claims which we just found out today will no longer be occurring. But the centralized processing has left us a legacy that we'll be dealing with for many months, if not years, and that's 14,000 claims are currently pending in that system.

That's a backlog, and that signals 14,000 disabled veterans who have been waiting to hear from VA concerning their claims. When VA initiated their plan to centralize Persian Gulf claims, the American Legion adamantly opposed this effort because of the possibility it would create such a backlog.

The American Legion has consistently encouraged VA to immediately end the practice of centralized processing and we therefore welcome Ms. Moffitt's announcement earlier this morning. And we are convinced that it signals better future service for disabled Gulf War veterans.

An environmental hazard claim is one where the veteran's current disability may have been caused by exposure to an environmental hazard in the Southwest Asia theater of operations. An

undiagnosed illness claim is one where the signs and symptoms of illness reported by the veteran go undiagnosed by a VA medical doctor.

Undiagnosed illness claims are a subset of environmental hazard cases. And approximately 90 percent of environmental hazard cases involve an undiagnosed illness. As of March 1997, the vast majority, 83 percent, of Gulf War disability claims have not involved an environmental hazard as a possible cause of the veteran's disability.

Most of the claims filed by Gulf War veterans, therefore, are adjudicated at VA regional offices that have jurisdiction for specific geographic areas in the U.S. or overseas.

In 1995, investigations conducted by the Department of Veterans Affairs, the U.S. General Accounting Office, and the American Legion's Gulf War Task Force found widespread errors in the processing of Gulf War undiagnosed illness claims.

And just as a note in reaction to some testimony given earlier this morning by Ms. Moffitt, out of the four Area Processing Offices in our investigation, and we made site visits to all four, the Phoenix Area Processing Office was clearly more better prepared to handle these claims.

The staff received extensive training. The allowance rate was sometimes three or four times greater than the other APO's. And the atmosphere within the Phoenix Area Processing Office was geared towards helping Gulf War veterans as much as possible.

That wasn't the case in the other places. So if VA wants to see how to do this right when it decentralizes these claims, we strongly recommend that they look at how the Phoenix regional office and its director ran that program.

VA undertook a review of the over 11,000 claims that had been adjudicated as of July 1996 in response to the findings and recommendations of those investigations. VA is currently seeking evidence from the veterans who filed these claims and will reconsider them if necessary.

The American Legion commends VA for initiating this massive review.

The recent extension of the presumptive period automatically added over 5,000 undiagnosed illness claims initially denied service connection because the symptoms reported by the veterans who filed those claims fell outside the original 2-year presumptive period.

Although welcomed by the American Legion, this increases the backlog of environmental hazards claims to over 14,000 cases. The American Legion believes the remedy to the backlog lies in ending the centralized processing of these claims, and apparently VA does as well.

In conclusion, Mr. Chairman, although long overdue, the decision to end adjudication of Gulf War environmental hazards claims at Area Processing Offices is a win for Gulf War veterans and a win for VA employees.

At town home meetings recently conducted by the Special Assistance for Gulf War Illnesses at the Department of Defense, Gulf War veterans, during the question and answer period, were encour

aged to ask any questions or provide any comments that were at the top of their minds.

Nine times out of ten, these folks weren't talking about DOD's investigation, chemical weapons, "Sixty Minutes", whistles and bells, and things like that. They were talking about basic bread and butter things. How am I going to pay my bills? Who's going to take care of me? Am I eligible for health care?

Claims were number one on veterans' minds, and the fact that they had filed for compensation and hadn't heard from VA sometimes for months or years. This step that VA took today is only a first step. And this hearing, I believe, was the spark that caused VA to change the way it processed these claims.

And you deserve all the credit for that, Mr. Chairman.

That concludes my testimony and I'll be happy to answer any questions.

[The prepared statement of Mr. Puglisi appears on p. 85.] Mr. QUINN. Thank you very much. Mr. Russo.

STATEMENT OF WILLIAM RUSSO, DIRECTOR, VETERANS' BENEFITS PROGRAMS, VIETNAM VETERANS OF AMERICA Mr. Russo. Yes, Mr. Chairman and members of the subcommittee, Vietnam Veterans of America appreciates this opportunity to present our views on Persian Gulf claims and cigarette smoking related claims.

VVA strongly supports the VA's decision to relocate these Persian Gulf claims into the regional offices and we think it's long overdue. It's been mentioned by several of the members of the subcommittee this morning that it appears some Area Processing Offices have been granting claims at a higher rate.

And I've analyzed the statistics provided by VA current through March, and they're quite staggering. The western area office where Mr. Puglisi says the only actual training was done of the staff is granting 20 percent of the undiagnosed illness claims. The other offices are granting 5 percent and 7 percent.

So it appears that where the training has been done, the claims are being granted in a much more-much higher rate. There's been lots of evidence for the last several years that VA needs to do better training.

Our organization discovered a form letter a year and a half ago coming out of the Philadelphia Area Processing Office denying a Persian Gulf vet's claim for benefits that completely misstated the law on Persian Gulf benefits and used that misstatement to deny the guy's claim.

Now it so happens that we brought this case, this one isolated case, to the attention of VA and they fixed that one problem. But the fact that there's an erroneous form letter going out that completely misstates the law is very troublesome and it indicates that VA needs to train its staff as to what the law is before they can be expected to know how to apply the law in individual cases.

Lastly, we think that moving these cases back into regional offices will improve the processing of Persian Gulf claims for one important reason. The veterans' service organizations and their representatives act as a system of checks and balances on the VA.

And when these veteran service officers can do effective advocacy in individual claims by looking through the claims folder, by talking to the actual VA adjudicator who's going to decide the claim, they can bring mistakes to the attention of the VA staff on a day to day basis.

And that system of checks and balances is crucial to making the VA function well. Regarding cigarette smoking claims, VVA strongly opposed the proposed legislation to effectively bar cigarette smoking-related claims for compensation for the following reasons:

First, it's our position that the military encouraged cigarette smoking for years and years. As we stated and were quoted in the Wall Street Journal 2 weeks ago, "The Military gave free cigarettes to service members for decade and also subsidized GI's purchase of them at the commissaries."

There were often no health warning labels on these cigarettes in contrast to commercially available packs. Moreover, the military often sat aside a time and a place specifically for smoking; thus encouraging a culture in the military of "smoke 'em if you got 'em." And this encouragement by the military to smoke was specifically referenced by the VA General Counsel in its precedent opinion 293.

Secondly, the Clinton administration has consistently asserted that cigarette smoking is addictive, and that's in direct conflict, we believe, with the statements by Secretary Brown over the last several weeks including that quoted in the Washington Post that cigarette smoking ailments are the result of veterans' personal choice to engage in cigarette smoking.

If you accept that cigarettes are addictive, as the administration has said over and over, then it really isn't a matter of personal choice for them to have smoked.

Finally, regarding these cigarette claims, we don't expect a flood of these cases to come in to the VA under the current law. The fact is, the current law has been on the books for some time, and we have only 4,000 claims held in abeyance.

Most veterans are unable, we find, to get direct medical evidence of technical medical issues. And in these cases, a veteran would have to come in with medical proof from a doctor that his cigarette smoking in service or his addiction thereto was the cause of the cancer or whatever smoking-related ailment he's got as opposed to the 10 or 20 years of smoking the veteran did after service.

So we don't anticipate that VA will be forced to grant a large number of these claims. And we think it would be unfair to single out one particular group of veterans and say that their claims are barred.

Thank you.

[The prepared statement of Mr. Russo, w/attachment, appears on p. 89.]

Mr. QUINN. Thank you very much. Mr. Magill.