The XX Committee

Fat Leonard Sinks the Navy

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.



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