The financial services and long term care industries must be “mobilized” to protect a pension program for poor, wartime vets from shady middle-men, Sen. Ron Wyden told the public in a Special Committee on Aging hearing.

“It’s pretty clear that pension poachers and bad actors have to be eliminated,” Wyden (D-Ore.) said at a hearing into Department of Veterans Affairs pension arbitrage in Washington, D.C., on June 6. Wyden said his goal is “to drain the swamp.”

The Aging committee’s hearing was called in the wake of a Government Accountability Office (GAO) audit that found that financial service companies were charging high fees to help veterans or their survivors move assets in order to qualify for pensions designed for the poor.

“The VA pension program provides a critical benefit to veterans,” GAO said in its report. “Without stronger controls over asset transfers, similar to other means-tested programs like Medicaid’s look-back and penalty period, VA cannot ensure that only those with financial need receive pension benefits.”

VA handed out some $4.3 billion in pension benefits to 517,000 veterans or their dependents in fiscal year 2011, GAO said.

There’s nothing illegal in helping veterans transfer their assets in order to qualify for the pension benefit, but GAO raised doubts about whether veterans were getting good advice from highly paid middle-men.

The long term care industry was a peripheral player in the GAO report and June 6 hearing. GAO raised concerns, for instance, about VA’s decision to offer formal accreditation to some lawyers and claims agents to help veterans obtain their pensions, which may give some veterans the impression that the agents are acting “in claimant’s best interests,” the report said.

Additionally, executives from assisted living or retirement homes “may have an interest in inviting organization representatives to conduct presentations on VA pension benefits because these benefits allow them to obtain new residents by making the costs more affordable,” GAO said.

“For example, we obtained documentation indicating that one retirement community paid an organization representative a fee for a new resident he helped the facility obtain,” GAO said. “Another community in another state paid organization representatives fees to assist residents in completing the VA pension application.”