The Fat Leonard scandal is a corruption scandal and ongoing investigation within the United States Navy involving ship support contractor Glenn Defense Marine Asia (GDMA), a subsidiary of the Glenn Marine Group. The Washington Post called the scandal "perhaps the worst national-security breach of its kind to hit the Navy since the end of the Cold War." At the heart of the scandal was Glenn Defense Marine Asia, a firm run by playboy Leonard Glenn Francis, a Malaysian national of Portuguese and Sri Lankan extraction. Six foot three inches tall, and weighing 350 pounds despite a stomach stapling, he was known as "Fat Leonard." Francis disbursed hundreds of thousands of dollars in cash, travel expenses, luxury items, and prostitutes among a large number of U.S. uniformed officers of the United States Seventh Fleet. They in turn gave him classified material about the movements of U.S. ships and submarines, confidential contracting information, and information about active law enforcement investigations into Glenn Defense Marine Asia. Francis then "exploited the intelligence for illicit profit, brazenly ordering his moles to redirect aircraft carriers to ports he controlled in Southeast Asia so he could more easily bilk the Navy for fuel, tugboats, barges, food, water and sewage removal." He also directed them to author "Bravo Zulo" memos, commending GDMA for doing supposed work "well done."
The first activities of the conspiracy were confirmed to have existed in 2006 when Francis recruited numerous Navy personnel to engage in corruption, including directing contracts toward his firm, disfavoring competitors, and inhibiting legitimate fiscal and operational oversight. The initial co-conspirators labelled themselves "the cool kids" and "the wolf pack."
U.S. federal prosecutors filed criminal charges against 30 people in connection with the Fat Leonard scandal. Of those, 20 pleaded guilty: Francis himself, four of his top aides, and 14 Navy officials (specifically, ten commissioned officers, one petty officer first class, one former NCIS special agent, and two civilian Navy contracting officials). Ten others are awaiting trial in U.S. district court in San Diego. Separately, five Navy officers were charged with crimes under the Uniformed Code of Military Justice (UCMJ) and have been subject to court-martial proceedings. An additional civilian pleaded guilty to a scandal-related crime in Singapore court.
Suffering health problems, Francis was hospitalized and released in March 2018. Rather than returning to the custody of the U.S. Marshals Service, he was granted a medical furlough and allowed to stay in San Diego at a private residence under 24-hour surveillance.
In 1989, when he was 21, Leonard had been sentenced to three years in jail in Malaysia for firearms possession.
Video Fat Leonard scandal
Initiation and conduct of investigation
Discounting whistleblower warnings
In 2006, Dave Schauss, a NCIS investigator, became suspicious of GDMA contracts, but Francis was alerted by an informant, Paul Simpkins, to the scrutiny. Simpkins, a decorated veteran of the U.S. Air Force employed as a civilian contractor for the Navy in Singapore, managed to quash any inquiry and had Schauss' position eliminated. "What else could I have done to expose this racket?," Schauss asked. Exposed as a whistleblower, he said officers, "made my life hell" after discovering he had attempted to initiate an investigation of GDMA. In 2007, the Navy's Inspector General forwarded a document claiming GDMA was grossly overcharging the Navy for providing port security but NCIS may have failed to follow up the warning. According to a senior Navy officer, "Everybody knew that [Glenn Defense] had been under investigation." "Everybody also knew that nothing ever happened with those investigations." After that, the Manila NCIS office got an anonymous letter and documents, alleging GDMA had overcharged for fees, armed guards and other services during a Subic Bay, Philippines port visit by the Fred Stockham container support ship. "I hope you share the same concern when reading these documents and take swift action to stamp out this fraud, waste and abuse," the letter said. Manila's NCIS agents forwarded the paperwork to the Navy's Singapore contracting office, but it had been infiltrated by GDMA's moles, and they claimed the allegations were false, closing the case. Mike Lang, a contracting officer who worked there from 2006 to 2008, said, "They'd always side with Glenn Defense and paint us as troublemakers. They'd say, 'Why are you harassing our contractors? You're making my job hard'." Two officials from that office, Simpkins and his subordinate, Sharon Gursharan Kaur, a former GDMA employee, were sentenced to six years and 33 months, respectively, the latter doing her time in Singapore.
Tepid responses
Documents obtained by the Washington Post via Freedom of Information Requests (FOIAs) revealed that subsequent to the October, 2000, suicide bombing by al-Qaeda on the Navy destoyer USS Cole in Aden, Yemen, and its 9/11/01 attacks on the World Trade Center and the Pentagon, the Navy's Economic Crimes unit had been reduced from a staff of 140 to only nine persons, most having been redeployed to focus on terrorism. At least 27 separate investigations had been opened, but later closed without action, thanks to the intervention of senior Navy personnel who were in league with Francis. John Hogan, the NCIS executive assistant director for criminal operations, admitted, "In hindsight, maybe we could have dug a little deeper than we did." Ray Mabus, who was appointed Navy Secretary by President Barack Obama in 2009, admitted his branch was vulnerable to contracting fraud and should have performed better oversight. "I'm not going to defend at all opening and closing 27 cases," he said. "Something should have raised a red flag along there somewhere." "There were people inside the Navy who were trying to shut this down, who were coming up with reasons not to pursue it." In 2010, a civilian Navy attorney drafted restrictive ethics guidelines for the 7th Fleet. Two admirals friendly to Francis were said to be responsible for seeing that it was delayed and diluted over the next 2 1/2 years, before being implemented.
Eventual actions
In 2010, Navy officials became suspicious that some of the bills submitted by GDMA from Thailand were padded. The escalating and somewhat unrestrained costs prompted the Navy to build a logistics team to keep contracts somewhat in check, but it was frustrated because Francis had a spy, Jose Luis Sanchez, feeding its information back to him. (Sanchez has pleaded guilty to conspiracy and awaits sentencing.) Despite the increasing awareness that the Navy was being subjected to massive fraud, GDMA was able to contract to deliver $200 million in services in 2011 alone. After a three-year secret investigation and having planted false information that their inquiries had been closed, putting Francis off his guard, federal agents lured him to the United States. In September 2013, he was arrested at a San Diego hotel in a sting operation. He pleaded guilty in January 2015 and is awaiting sentencing. Leonard admitted to using his U.S. Navy contacts, including ship captains, to obtain classified information and to defraud the Navy of tens of millions of dollars by steering ships to specific ports in the Pacific and falsifying service charges. In his plea, Francis identified seven Navy officials who accepted bribes. He faces a maximum prison sentence of 25 years and agreed to forfeit $35 million in personal assets, an amount he admits to overcharging the Navy.
Maps Fat Leonard scandal
Scope of inquiry and prosecutions
Since 2013, 31 people have been criminally charged in connection with the Fat Leonard bribery and corruption scandal. According to investigators, by November 2017, more than 440 people -- including 60 admirals -- have come under scrutiny under the inquiry. The Navy will hold a military trial for a still-serving commander, David A. Morales, the first not left to civilian prosecution. He was charged with accepting travel, luxury dinners, prostitutes and show tickets, allegedly in return for persuading other military officials to accept bribes and join the conspiracy. As of February 2018, 19 people have pleaded guilty; 13 others have been charged (including eight Navy officers who were indicted in March 2017); four admirals were disciplined by the military; two others are known to be under investigation; and more than 150 other unidentified people have been scrutinized.
A March 2017 indictment made reference to "AG", a former officer in the Royal Australian Navy (RAN), who had been employed for several years as a liaison officer aboard USS Blue Ridge. On 3 May 2018, the Australian Broadcasting Corporation identified "AG" as Lieutenant Commander Alex Gillett, reporting that he had resigned from the Navy after being questioned by the Australian Federal Police and now works as a Canberra-based contractor to the Department of Defence. A second unidentified Australian of similar rank was also reported to be under investigation. A memo of understanding between the U.S. Navy and the RAN allows for the possible extradition of Australian personnel to the United States for the purposes of prosecution.
Among the nineteen people who have pleaded guilty to federal crimes, one was Francis himself, two others were his top deputies; and fifteen others were Navy personnel. The highest-ranking was Rear Admiral Robert Gilbeau, who was convicted in June 2016 after pleading guilty to making false statements to investigators about his contacts with Francis, becoming the first Navy admiral in modern American history to be convicted of a felony while on active duty. On May 17, 2017, U.S. District Judge Janis Lynn Sammartino sentenced Gilbeau to 18 months in prison, although he will be allowed to continue collecting his nearly $10,000 monthly pension. He is being held in FCI Englewood, a low security federal prison in Littleton, Colorado, and is scheduled for release on November 1, 2018.
National University of Singapore, corporate governance expert Mak Yuen Teen, noted that procurement in the defense industry is particularly vulnerable to bribery and corruption. "It is usually not that transparent," with infrequent bidding for large contracts. Blowing the whistle on superior officers might also be discouraged, he indicated. "Those at the top probably thought they could get away with it as their underlings were unlikely to squeal on them."
According to its spokesman Captain Amy Derrick, the U.S. Navy canceled all contracts with GDMA as the result of a 2013 audit.
In the case of former Naval Intelligence chief, Vice Admiral Ted N. Branch, both the Navy and the Department of Justice declined to prosecute after a three-year investigation.
Corruption prevention
In February 2018, through Admiral Bill Moran, the Vice Chief of Naval Operations, the navy announced the implementation of increased oversight and other measures and policies to deter a repeat of the widespread corruption in the "Fat Leonard" case. Glenn Fine, the principal deputy in the Office of the Inspector General of the Department of Defense, said the Defense Criminal Investigative Service, the criminal investigative arm of the DOD's OIG, said GDMA, Francis' contract firm, created a scheme to defraud the Navy of tens of millions of dollars via overbilling for supplying goods and services. The Navy created a Consolidated Disposition Authority, or CDA, tasked with determining whether hundreds of Navy officers should be charged under the UCMJ, or alternatively, to be subjected to administrative actions. Fine said the CDA has already adjudicated 300-plus cases. The Navy, which had been posting the names of personnel who had been fired in the case on its website, announced in May, 2018, that it will discontinue the practice. California Representative Jackie Speier, the ranking member of the House Armed Services Subcommittee on Military Personnel, objected to the change in policy, characterizing it as a reduction in transparency and a barrier to the public's "right to know."
Individuals involved
Except for Gursharan Kaur Sharon Rachael's case, which was tried in Singapore, and those of five persons charged in military courts (Captain John F. Steinberger, Commander David A. Morales, Commander Jason W. Starmer, Lt. Peter Vapor, and Chief Warrant Officer Brian T. Ware), all court proceedings as of July 10, 2018, are in U.S. federal court.
|David Haas |Former Operations Officer, Seventh Fleet |Relieved of Command in November 2013 because of GDMA-related conduct. Did not retire until December 2016. |Never charged for any GDMA-related conduct, possibly indicating cooperation with prosecutors.
References
External links
- Q&A interview with Defense News naval warfare correspondent Chris Cavas on the topic of the Fat Leonard Scandal, May 7, 2017, C-SPAN
Source of the article : Wikipedia
0 Comments