TEXT ON SCREEN: February 17, 2007

ARCHIVAL (NBC NEWS, 2-20-07):BRIAN WILLIAMS: Wounded veterans returning from Iraq and Afghanistan have been living in appalling conditions.

ARCHIVAL (NBC NEWS, 2-17-07): DANA PRIEST: Peeling wallpaper, shower rot

ARCHIVAL (NBC NEWS, 3-5-07): JIM MIKLASZEWSKI: Mice and mold on the walls

ARCHIVAL (ABC NEWS, 2-21-07): REPORTER: Soldiers face a bureaucratic nightmare, and a shortage of trained staff.

NARRATION: The Walter Reed scandal shocked America, and spurred major reforms.

ARCHIVAL (NBC NEWS, 7-25-07): REPORTER: The total overhaul of military and veterans healthcare

ARCHIVAL (ABC NEWS, 3-30-07): PRESIDENT GEORGE W. BUSH: And were gonna fix the problem.

NARRATION: But six years later, whats happened to the promises made to wounded soldiers?

JESSICA ALLEN: Theyre missing limbs, theyre going through so much, and yet we keep piling it on.


NARRATION: If any still hoped that the war in Iraq might be cheap, quick, or painless, the year 2004 proved otherwise. American fatalities passed 1000, and intense battles broke out in Fallujah and Ramadi. Army Staff Sergeant Dan Shannon, a father of three, fought in both cities, and survived. But on November 13th, he took a direct hit from an AK-47.

STAFF SGT. JOHN DAN SHANNON (US ARMY (RET.): It just missed the bridge of my nose, and exited over my left ear. And it took all this bone and everything with it, and, of course, my left eye.

NARRATION: Medevaced out of Iraq, Shannon arrived at Walter Reed Army Medical Center, Americas flagship military hospital. But only nine days after his injury in combat, the hospital staff discharged Shannon into outpatient status.

STAFF SGT. JOHN DAN SHANNON: They gave me a Xeroxed map of the hospital grounds, and it was not very well photocopied. And here I am, sliding down walls sliding down brick walls outside, staggering across open areas so I can get to another brick wall to hold me up, and have no idea where to go. And mind you, my head is still bandaged at this time frame.

NARRATION: Wearing only a hospital gown and robe, Dan says he roamed Walter Reeds grounds for two hours, before making it to the small room assigned to his family.

TORREY SHANNON (WIFE OF STAFF SGT. SHANNON): I open the door, and hes standing in the door frame, and the moment he saw me, a sense of relief washed over his face, and he just collapsed right at my feet. And said oh, thank God I found you. And I was furious.

NARRATION: Dan had found his family, but he was already lost in the system. After an initial series of appointments, he was left on his own, until he managed to track down the nurse assigned to oversee his care. That took weeks.

STAFF SGT. JOHN DAN SHANNON: Her comment was, where have you been? And I said, what do you mean, where have I been? Ive never left the hospital grounds. Im right here, Ive gone to all of my appointments, and she goes, we can see in the computer that you went to all of your appointments, but nobody knows where you are.

NARRATION: Dan Shannon spent more than two years in limbo as a Walter Reed outpatient. Then, literally overnight, he became the face of a scandal.

ARCHIVAL (NBC NEWS, 2-20-07): ANDREA MITCHELL: After an explosive Washington Post investigation of the decrepit conditions and stifling bureaucracy, and their effect on the troops. DANA PRIEST: They think that the systems against them, theyll recede into their rooms, and not physically not come out.

ARCHIVAL (ABC NEWS, 2-21-07): REPORTER: This is what greets wounded soldiers: mold, holes in walls, rats and insect infestation.

ARCHIVAL (NBC NEWS, 2-20-07): SENATOR CLAIRE MCCASKILL (D-MISSOURI): I cant believe that there is an American out there who isnt outraged.

NARRATION: When the story broke, the Army quickly saw to it that dilapidated living quarters got a makeover. But on March 5th, when Congress held a field hearing at Walter Reed, Dan Shannon told them the problems run deeper than mold and mice.

ARCHIVAL (C-SPAN, 3-5-07): STAFF SGT. JOHN DAN SHANNON: Ive seen so many soldiers get so frustrated with the process that they will sign anything presented to them just so they can get on with their lives. The system cant be trusted. And soldiers get less than they deserve from a system seemingly designed to run and run, to cut the cost associated with fighting this war.

NARRATION: Just a day after the commander of Walter Reed lost his post, the same happened to his replacement, and their boss lost his job.

ARCHIVAL (CBS NEWS, 3-2-07): KATIE COURIC: Tonight, the secretary of the Army got the boot.

NARRATION: Thats when Physician in General Eric Schoomaker was chosen to manage sweeping changes, first at Walter Reed, and then throughout the Army healthcare system.

LT. GEN. ERIC B. SCHOOMAKER, MD, PHD (ARMY SURGEON GENERAL, 2007-2011): That mold, and the byzantine kind of environment in which these soldiers themselves almost Kafka-esque became a metaphor for a moldy system which needed to be revitalized.

NARRATION: The task was more challenging, because military medicine had gotten so good. Compared to the war in Vietnam, the odds that American service members would survive combat wounds in Iraq and Afghanistan roughly doubled.

LT. GEN. ERIC B. SCHOOMAKER, MD, PHD: This really stellar achievement in improving survival had, in a sense, a downside for us in the recovery and rehabilitation, and that is that we are now beginning to see soldiers, the likes of which we had not seen in years.

NARRATION: The most tangible reform was the creation of Warrior Transition Units, or WTUs, at Walter Reed and 35 other Army bases. In a novel approach, three person teams would provide a web of support for each patient, while they healed, and prepared to either return to duty, or retire from the military.

LT. GEN. ERIC B. SCHOOMAKER, MD, PHD: We needed to look into how all of those cracks, into which soldiers were dropping, could be closed.

NARRATION: Meanwhile, Dan Shannon and his family had moved over three hours away from Walter Reed, and were waiting for Dans retirement paperwork to go through. But then:

TORREY SHANNON: I get a phone call on a Sunday night at 8pm, that says, Sergeant Shannon needs to report to formation tomorrow morning. And I said, no, hes on terminal leave. They said, well, um, we lost his paperwork, its got to be restarted, so he has to report to formation because hes no longer on terminal leave.

STAFF SGT. JOHN DAN SHANNON: If they have lost me, after all the exposure that I have had in the media, and after my Congressional testimony, then how are they taking care of anybody else?

NARRATION: In 2009, the newly elected president, Barack Obama, reaffirmed the Bush administrations commitment.

ARCHIVAL (THE WHITE HOUSE, 3-30-09): PRESIDENT BARACK OBAMA: Just as these wounded warriors are there for one another, this country is going to be there for them.

NARRATION: Obama appointed Noel Koch, a season Pentagon insider, to head what would become known as the Office of Wounded Warrior Care & Transition Policy. Koch was a Vietnam veteran, determined not to repeat the mistakes of the past.

NOEL KOCH (DEPUTY UNDER SECRETARY OF DEFENSE, WWCTP, 2009-2010): I had an old LIFE magazine from 1970, that was full of heartbreaking stories. Our soldiers were coming home, being treated like dirt.

NARRATION: So Koch had the magazine cover made into a poster to publicize his new office.

NOEL KOCH: And across the bottom it said, not this time, not on my watch!

NARRATION: Koch says the posters were not appreciated, and he was ordered to destroy them. Undaunted, Koch and his team began an extensive investigation of military healthcare facilities. In classified reports that were later leaked to the press, they described the medical care in a military hospital as world class, but it was a different story in Warrior Transition Units, which had now been running for over two years.

NOEL KOCH: Some places were better than others, but there were problems of one sort or another at every single WTU that we went to. And these problems were corrected somewhat at Walter Reed, but they replicated across the whole system.

NARRATION: Kochs team found that some WTU squad leaders were underprepared and under trained, facing work overloads and compassion fatigue. And all too often, Koch says doctors responded to patients complex emotional and medical needs with a simple solution:

NOEL KOCH: Dope em up. Drug em.

LT. GEN. ERIC B. SCHOOMAKER, MD, PHD: Frankly, I didnt share the perspective that he had, and his team had on the care that we were rendering.

NARRATION: But on April 25th, 2010, an independent investigation by The New York Times came to conclusions strikingly similar to Kochs, calling WTUs, warehouses of despair. The outside validation came too late for Koch. Just a few days earlier, he says the Under Secretary of Defense for Personnel and Readiness asked him to resign.

NOEL KOCH: He said, this is gonna be a very short meeting. He said, I just want to tell you that I have no confidence in you, and Id like your resignation. And that was it. There was no run-up to it.

NARRATION: Since leaving the Pentagon, Koch has continued to argue that the WTU system is broken. And Schoomaker, who retired in 2011, continues to defend it.

LT. GEN. ERIC B. SCHOOMAKER, MD, PHD: Were building the bridge as were walking on it, were flying the airplane as we put it together. So, there were undoubtedly growing pains. But Schoomaker says that WTUs are a vast improvement over the old system, and points to Army surveys that report over 80% of patients are satisfied. The Army also cites efforts to prevent overmedication, better train staff, and improve patient care. But bad news and complaints keep coming.

JESSICA ALLEN (CAREGIVER ADVOCATE AND WIFE OF DOUBLE AMPUTEE): Every family that I work with has a different story, and every one of them ends, Im just a burden, and they want me out of here.

ARCHIVAL (C-SPAN2, 2-26-13): REP. KAY GRANGER: Wounded soldiers were met with a toxic environment, and soldiers needing help were told to keep their mouth shut.

ARCHIVAL (NPR, 4-26-12): REPORTER: One Fort Drum staff member told investigators, quote, the numbers and types of medications that some of the warriors were taking was a scary situation.

NARRATION: Today, the US has pulled out of Iraq, and is withdrawing from Afghanistan. But Warrior Transition Units are still on the front lines, in the long-term fight against Post-Traumatic Stress Disorder, Traumatic Brain Injury, and major depression.

NOEL KOCH: Weve got a wave of problems out there in front of us, that are going to be coming at us in the years ahead, in numbers that we cant now, really, anticipate. And its going to manifest itself in broken soldiers, broken homes, children that are messed up. All this stuff is what weve got waiting for us.

NARRATION: Post-Traumatic Stress still haunts Dan Shannon, and led him to move with his family to a remote cabin in the Colorado wilderness.

STAFF SGT. JOHN DAN SHANNON: Here, Im not really aware how different I am. I feel that I am safe here, because I dont have the constant inputs of a city environment around me, and I find that I need that. If I have to go to Denver for any reason, I am messed up for about 3 to 5 days after I come home.

NARRATION: Torrey Shannon has become a writer and advocate, counseling hundreds of wounded service members and their families.

TORREY SHANNON: The Walter Reed scandal shed a lot of light, and there was a lot of attention, and, you know, all this momentum and traction was built and within two years it just fizzled away again. Were right back to where we started, and, in some cases, worse than when we started.

STAFF SGT. JOHN DAN SHANNON: Every person who volunteers to join the military, has written for the United States government, a blank check, up to and including their lives, in order to protect the freedoms that we have in this country. If the American people cant find value in that well, I cant believe that. I believe that the American people do find value in that.