Because of the way the Grassley PR release is titled, a direct link isn't working. To find the press release with the letter to the DOJ go to:
http://www.grassley.senate.gov and then
NEWS CENTER > PRESS RELEASES and look about 3/4 way down on April 15 to find a copy of the letter.
My gist of the info is that if the VA has determined, through their administrative process, that a vet, or a dependant receiving veteran's benefits, is incompetent to the point of having someone appointed as a power of attorney, that is what gets them on the list. It's true that we're not talking about someone that needs help balancing a checkbook, but rather someone who has trouble remembering what a checkbook is for, and how to write a check to pay for their bills (not literally, but you get the idea). It isn't someone who is necessarily a danger to themselves or others, but it could be that they are.
It's clear, though, that the VA is the major one reporting such people to the DOJ -the states are not required to report people who have been determined by a court (usually a probate court) thst have been judged to be in need of guardianship, which is basically what the VA is reporting.