"There appear to be adequate procedures in place to verify fraudulent claims to military decorations," said Lernes Hebert, the director of the Defense Department's Office of Enlisted Personnel Management.
A visibly frustrated Chaffetz, R-Utah, said he would draft legislation to force them to create a central repository.
"I think this is a lack of leadership within the Pentagon," he said. "They have failed to recognize the problem. They have failed to recognize the need."
Joseph Davis with the Veterans of Foreign Wars supports Chaffetz's position, saying an easy-to-use database would help those who really served the nation, streamlining their access to health care, disability benefits and burial services.
"A searchable military decorations database is the only responsible way to properly document the medals the military issues," he said.
Chaffetz argued that the database's value would go beyond veterans' issues. He said the government offers incentives for veterans to bid on high-dollar contracts without having a fail-safe way to ensure the person bidding actually served in the military.
"It is not some guy in a bar trying to impress a woman that I'm worried about," he said. "We are talking about millions of dollars and the integrity of those who truly earned their awards."
Chaffetz called Wednesday's hearing in reaction to his own experience with Myron Brown, a Korean War veteran from Provo.
Last June, Brown presented the congressman's office with fraudulent documents that said he should have received three prestigious Air Force medals 60 years ago.
Chaffetz pinned the medals on Brown, 86, at a Saratoga Springs town meeting, covered by KSL, the Deseret News and The Daily Herald of Provo.
But people who track such awards raised questions after seeing the media reports and The Salt Lake Tribune uncovered in November that Brown's citations didn't match the official Air Force records from the 1950s.
Chaffetz's staff had also asked the Pentagon to verify Brown's new awards. It took four months and repeated prodding before the military confirmed that Brown did not earn the medals.
"As a sitting member of Congress with my own legislative liaison, that's the kind of response that we get," Chaffetz said in the hearing. "I can only imagine some employer in Florida, or pick any state you want, trying to go through this process. I don't believe our own military can go through this process sufficiently and find the answers they want about their family and their own records."
Brown has said he deserves the medals and that he didn't falsify the documents. Chaffetz asked the U.S. Attorney in Utah to investigate the matter for a possible criminal violation.
He also handed prosecutors information about an employee he hired in 2011 under the congressional wounded warrior program. The man claimed to have won a Purple Heart. Chaffetz fired the employee when he learned that the man never received the medal.
In 2006, Congress made it a crime to lie about receiving military honors, though the Supreme Court last week took up a challenge to that "Stolen Valor" law. The legal issue is whether such a lie is protected under the First Amendment right to free speech.
The man who first questioned Brown's medals was also instrumental in pushing that Stolen Valor law. Doug Sterner, along with his wife Pam, of Virginia, have taken it upon themselves to track and document the military's most decorated service members.
Doug Sterner is the curator of the Miltiary Times Hall of Valor. He testified Wednesday that he created his online directory from incomplete and scattered military records, along with media reports.
As an example of the confusion, Sterner says he has the official Army citations for 1,068 Vietnam veterans who received the Distinguished Service Cross, though the Army only acknowledges 848 such awards.
"That's 220 of that war's most highly decorated heroes otherwise lost to history because of poor record keeping," said Sterner, a Vietnam veteran. "We owe them a lot and the least we owe them is an accurate record of their deeds."
He said the records exist, some are on 3-by-5 cards, others on microfiche, so while it would take money, people and time to build a database, it wouldn't be complicated.
"It's data entry. It's not rocket science," Sterner said.
The military representatives downplayed the number of stolen valor cases that they find and therefore said it was unnecessary to make an extensive public database.
"While even one false claim is too many, the limited frequency of such claims does help to inform the way forward," said Hebert, the Defense Department official.
The Navy says it has only received two requests to verify an award's authenticity at the headquarters level since 2008, though its database is available to law enforcement.
The Air Force said it has looked into the awards of 731 veterans at the request of members of Congress since 2010 and found only two fraudulent cases.
The Army reported less than 20 fraudulent cases in the past three years.
The Pentagon studied a comprehensive searchable database in 2009 and found that "although the intent of such an endeavor was laudable, the database would have little utility for reducing the number of fraudulent valor awards," according to Hebert, because it would preclude information that could violate a soldier's privacy.
Hebert acknowledged the military must make it easier for the public to access the various records now housed by the separate services in 12 locations.
Chaffetz questioned the military statistics, saying they downplayed a real problem.
"I would be led, if I heard your testimony or read your testimony, to believe everything is fine," he said. "It is not fine. It is not working."
Stolen Valor Act
The 2006 law makes it a crime for a person to falsely claim they earned military medals. The constitutionality of the act is being challenged in a California case that was heard by the U.S. Supreme Court last week. Justices were asked to decide whether lies about military honors are protected by the First Amendment. A ruling is likely months away.