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Fat Leonard Sinks the Navy

January 16, 2015

Yesterday one of the more remarkable scandals in the history of the U.S. Navy more or less wrapped up when its kingpin pleaded guilty to a raft of charges centering on bribery and defrauding the Defense Department to the tune of tens of millions of dollars. Leonard Francis, a Malaysian known universally as Fat Leonard for his impressive girth, headed Glenn Defense Marine Asia (GDMA) in Singapore, a firm that got rich by servicing and repairing U.S. Navy ships, not altogether legally.

This line of work is rife with corruption, particularly in the seedier ports of the Western Pacific, but Fat Leonard brought this rigged game into the twenty-first century. He bribed Navy officials, plying them with liquor, gifts, cash, and rented women, yet Fat Leonard kicked it to a new level by ferreting classified reports from his Navy friends, sensitive information about ship deployments, which allowed GDMA to steer lucrative repair contracts away from low revenue ports like Singapore and toward “fat revenue” ports like Phuket in Thailand. Given the number of U.S. Navy ships of the Seventh Fleet operating in those waters, the money came easy once Fat Leonard had his machine in place.

This began in 2004, with the buying — or at least renting — of favors and classified information from Navy officials, and for five years the going was good, but by 2009, Federal investigators grew suspicious of how GDMA was making so much off the Defense Department. Soon the Naval Criminal Investigative Service (NCIS) was on the case, looking into what Fat Leonard was up to.

Like any good businessman with a clever and sneaky mind, Fat Leonard turned the tables on NCIS by penetrating them while Navy investigators tried to determine what GDMA was up to. The golden source was a senior NCIS agent who was in regular contact with Fat Leonard, sharing with him what was going on with the classified NCIS investigation into GDMA, allowing Fat Leonard to avoid the collapse of his corrupt empire until late 2013. The agent, John Beliveau, was paid, as usual, with cash, gifts, and prostitutes and, in a touch worthy of a Coen brothers film, he had recently been named NCIS Agent of the Year.

Fat Leonard’s ability to recruit the right source cannot be judged less than impressive, and his stable of dirty Navy officials included a commander holding the number-two job at Navy Fleet Logistics Command in Japan, plus another Seventh Fleet commander who shared classified information about ship movements; in another touch worthy of the Coen brothers, he was paid once with tickets to a Lady Gaga concert.

Of greatest concern, Fat Leonard’s network of friends included two Navy admirals, who “just happened” to be among the Navy’s most senior intelligence officials. Despite allegations of “personal misconduct” against both admirals, neither has yet been charged with anything relating to the GDMA scandal, yet their security clearances were suspended by the Secretary of the Navy. This led to the bizarre situation that Vice Admiral Ted Branch spent a year serving as the Director of Naval Intelligence while being totally unable to do his job since he could see no classified information. After a year of this odd situation, VADM Branch was finally replaced. Needless to add, mere mortals who are not three-star admirals would not be allowed to stay in their jobs without clearances, while the lower-ranking — say a junior officer or any enlisted sailor — would be thrown to the wolves without delay.

This is the crux of the matter. In recent years, the U.S. Navy has put on a good show regarding ethics. The mantra “Honor, Courage, Commitment” gets recited a lot and the mandatory reeducation sessions, particularly regarding matters sexual, are positively Maoist in their intensity. Unlike the other armed services, the Navy is willing to relieve commanders at the O5/O6 level almost casually over misconduct allegations, which sends the message that those trusted with command are expected to live up to Navy values. This sounds impressive, yet it not infrequently turns out that the allegations are minor and almost invariably sexual, bespeaking a Puritanism that sailors past would find risible, and any credit the Navy gets is undone by the widespread toleration of gross corruption as evidenced by Fat Leonard and his rigged game.

The Navy is at pains to explain that Fat Leonard is an “isolated incident” that demonstrates nothing about the state of the Navy. However, those who have served in the Navy know otherwise. Every single Navy command I’ve seen up-close, as an officer or as a civilian, had some flavor of the crimes — sorry, problems — demonstrated with the GDMA disaster, but these usually went unreported, since calling up the Inspector General can easily invite career suicide.

Navy leadership is at this point is only fooling itself. The details of a recent internal Navy study are shocking, particularly the lack of trust in senior leadership felt by sailors. Only eighteen percent of the sailors surveyed said morale was “good,” with forty-two percent describing morale as “poor” or “marginal,” while fully half of those surveyed had no interest in moving up the chain of command themselves. To quote the study:

37.2 percent regard senior leadership as ‘marginal’ or ‘poor,’ a plurality state they do not trust senior leaders, 51.3 percent don’t believe senior leaders care what they think and 50.1 percent of sailors do not believe senior leaders hold themselves accountable

These sad numbers generated the usual blather about how admirals “get it” and the Navy is “working on this” but nobody who knows the service believes this. The very public nature of the Fat Leonard scandal has forced the Navy to confront the rot in its senior ranks, but to date there have only been weak promises that “this time will be different.”

If the Navy expects to win the next war, it needs to restore confidence in its integrity, especially to its junior sailors, who see senior officers and admirals getting rich and living the high life, while their own careers, and often lives, can be ruined over a whiff of scandal regarding drink or women of the kind that sailors until recently would have termed “the weekend.” Puritanism for the lower ranks and wild (illegal) partying for the higher ranks is a great way to destroy morale.

The FBI needs to brought in to figure out what really happened in the Fat Leonard drama, since the NCIS was itself compromised in the scandal, moreover its track record on high-profile investigations is less than stellar. There are troubling counterintelligence aspects of the GDMA story that need full and proper investigation.

Additionally, a high-ranking panel must be convened by the Pentagon to produce recommendations on how to clean up Navy culture, particularly among the senior ranks. No currently serving admirals should be involved, since they cannot be trusted to be impartial, but there are several retired admirals of genuine integrity out there who are deeply concerned about the state of the Navy and would be ideal here; they are in the phone book.

The American public deserves believable assurances that the Fat Leonard scandal will not be repeated, and junior officers and enlisted sailors need to feel confident that there are not two tiers of expectations and justice in the U.S. Navy. If that is not repaired, and morale in the fleet is not properly restored, the consequences may be dire indeed, and played out in the Western Pacific sooner than you think.

 

 

From → USG

11 Comments
  1. Tristan permalink

    If a local gangster can do this, I shudder to think what true professionals could be doing to USN and others!

  2. Kaz permalink

    He bribed Navy officials, plying them with liquor

    Sheesh, I didn’t know how far a bottle of good schotch could get a man these days. Good thing he did not also throw in some Cuban cigars or the Navy would really be in trouble.

  3. mcgannonma permalink

    disgraceful for sure, but sadly my beloved Air Force has had its share of corruption scandals as well in recent years.

    What’s going on with our Officer corp these days?

  4. Jim A. permalink

    Aw, snap, man! But … but… but…NCIS has its own show! If they make a show about you, that means you’re the best, right? You know, Dragnet… LAPD? Meanwhile, back at the office … Weren’t we bitching about this stuff a decade ago? Just from a soothing-old-wounds perspective, thanks for mentioning the positively “Maoist” aspect of Navy reeducation. I just knew I couldn’t have been the only one who had that heretical thought. They could have played a recording of “Sailing Seas Depends On The Helmsman” during those 1990s Navy Cultural Revolution reeducation sessions and it would have flown right past the TQL Guards. But, seriously folks, this ain’t gonna get fixed until we fix officer selection and promotion. I don’t think that’s gonna happen in my lifetime, nor my kid’s.

    • Yes, we saw it all, shipmate, and we’re not clairvoyant, so … I share your pessimism about fixing this anytime soon. Loss of some big decks in ECS might concentrate minds — I said might.

  5. SteveM permalink

    Why not? Everyone is doing it and pales in comparison to the 2Trillion dollar boondoggle such as F35 and other projects.

    I doubt we will fix it. Military is largely immune to public and political criticism that’s levied against Congress, Wall Street, the CIA, and other formerly venerated now moral and culturally bankrupt institutions. Not that we fixed those either even after close examinations. But this story will not even make front news prompting such examination.

    This is a much larger story. A societal one better understood reading Edward Gibbons’ The History Of The Decline And Fall Of The Roman Empire.

  6. justme permalink

    We can hope that foreign powers have not had similar success in penetrating the flag ranks. But even if they haven’t, what might be the consequences of similar corruption in Navy procurement? Take a look at the declining range and payload of our carrier air wings, and then look at the A-12, F-35, LCS, DDG-1000 and now the HV-22…

    • Matthew permalink

      Justme – The A-12 has been cancelled since 1991 it was just litigated to death after not sure how a 24 year old project has much weight on the Navy today, and the HV-22 is to my understanding still being evaluated on if its a suitable replacement to the C-2, not sure what HV-22 shows. F-35 is a nightmare but then again so was the F-16 for a long time for many of the same reasons (trying to do to much, see the M-2 Bradley for a similar story). Not saying these types of programs and experiences are not problematic rather I just don’t see it as anything new, these issues date back into the Cold War and you can look across to Europe and see similar issues in European defense and I would venture to guess China especially has even worse corruption issues in their defense industry. That doesn’t mean these issues shouldn’t be tackled but it seems disingenuous to claim these issues are new or some sign of decline.

      • justme permalink

        Matthew,

        Procurement has been problematic ever since the delays and cost overruns on the USS Constitution class, and I have no specific information with which to accuse anyone of anything. But the fact is that the strike range and payload of planned carrier aircraft have been decreasing (F-18E/F, F-35, HV-22) and longer-ranged heavier aircraft programs have been canceled (A-12, Tomcat 21, C-2D or C-3). Meanwhile program cost and complexity go up.

        Perhaps this is the best we can do, perhaps that’s just the choices that the state of the art leaves for us. But what if the corruption outlined in the OP is not confined to a single corporation in the Pacific? How might that affect procurement decisions?

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