Navy Corruption Scandal

The Washington Post has published another report on the Glenn Defense Navy scandal. For more than a decade, the head of Glenn Defense, Leonard Glenn Francis, cozied up to Navy leaders in the Pacific to win lucrative contracts for resupplying ships. He cashed in on overpriced contracts and fraudulent invoices, and he had numerous moles inside the Navy to ensure his continued enrichment.

Francis wined and dined Navy officers, providing them with gifts, prostitutes, and other favors to get their help and protection. The episode is appalling in so many ways, and it has disturbing implications: If Navy officers were so easily seduced by this Singapore con artist, are leaders in other military and intelligence services just as vulnerable to old-fashioned, low-tech bribes?

Here are some highlights from the Post:

The Navy allowed the worst corruption scandal in its history to fester for several years by dismissing a flood of evidence that the rotund Asian defense contractor was cheating the service out of millions of dollars and bribing officers with booze, sex and lavish dinners, newly released ­documents show.

The Singapore-based contractor, Leonard Glenn Francis, found it especially easy to outwit the Naval Criminal Investigative Service (NCIS), the renowned law enforcement agency that has inspired one of the longest-running cop shows on television.

Starting in 2006, in response to a multitude of fraud complaints, NCIS opened 27 separate investigations into Francis’s company, Glenn Defense Marine Asia. In each of those instances, however, NCIS closed the case after failing to dig up sufficient evidence to take action against the firm, according to hundreds of pages of law enforcement records ­obtained by The Washington Post under the Freedom of Information Act.

Known as Fat Leonard for his 350-pound physique, Francis held lucrative contracts to resupply U.S. warships and submarines in ports throughout Asia. He was also legendary within the Navy for throwing hedonistic parties, often with prostitutes, to entertain sailors.

Other Navy documents obtained by The Post show that staffers at U.S. Pacific Fleet headquarters were so worried about the potential for trouble that they drafted a new ethics policy to discourage Navy personnel from accepting favors from Francis. But their effort was blocked for more than two years by admirals who were friendly with the contractor, according to officials familiar with the matter.

Despite rising signs of widespread fraud, the Navy kept awarding business to Francis’s company. In 2011, Glenn Defense won deals valued at $200 million to service U.S. vessels at ports stretching from the Russian Far East to Australia.

Besides Francis, 12 people — including an admiral and nine other Navy personnel — have pleaded guilty to federal crimes. Five other defendants still face charges.

Justice Department officials say there is no end in sight to the investigation and that 200 people have fallen under scrutiny. Among them are about 30 current or retired admirals, according to Navy ­officials.

… In exchange for paid sex with prostitutes, cash and luxury vacations, Francis’s informants fed him a near-daily diet of classified material and inside information that enabled him to keep gouging the Navy and outfox his pursuers for years, according to court records.

A prior Washington Post story on the scandal is here.

A study examining federal bureaucratic failure is here.