Bribery Scandal Rocks the Navy

On the day of the Washington Navy Yard shooting, a team from the Naval Criminal Investigative Service in San Diego was arresting Leonard Francis, the president of Glenn Defense Marine Asia, a Singapore-based defense company that’s been providing port services to the U.S. Navy in key areas in Asia for 25 years.

After a lengthy, highly secretive investigation, Francis was charged with in a massive bribery scandal that prosecutors say cost the Navy more than $20 million. Two Navy commanders were also arrested for taking bribes, two captains have been suspended, two admirals are under investigation -- and an NCIS agent was arrested on taking bribes in exchange for inside information on the investigation.

And Navy Secretary Ray Mabus said there are likely more charges to come.

“I think it's fair to say that there will be more disclosures coming in GDMA. What kind of disclosures those are, I'm not at liberty to say. But I certainly don't think we've seen the end of it,” Mabus said at a press briefing at the Pentagon on Friday.

Mabus said he’s enacting new measures to tighten the procurement process at ports across the world, but the scandal is just one in a string of recent high-profile misconduct cases to hit the Defense Department. On Thursday, the Air Force fired a two-star general in charge of nuclear weapons after he had a drunken four-day bender in Moscow.

 “This is a very serious case, and it's a serious issue. And I'm making sure that Navy leaders everywhere understand just how deeply concerned I and the Navy am about it,” Mabus said. “I've already spoken with the chief of naval operations, our fleet commanders, and our component commanders, and three- and four-star admirals stationed around the world” to discuss the case and how to prevent it. Mabus pointed out that the case only involved a small number of Navy personnel and that it was other Navy officials who tipped off investigators that something was wrong.

(Read more Defense One coverage on the Navy here)

He said he didn’t think there was a widespread problem within the Navy, despite the recent scandals. “I think the public discussion to date has sometimes missed the fact that the concerns about Glenn Defense Marine were first raised by people inside the Navy, that the Navy acted on these suspicions by building a case against the company, its owners, and implicated Navy officials, and that the Navy partnered with government prosecutors at the Department of Justice to make the arrest and assist in the current prosecution. Without the Navy and Navy's actions, there would almost certainly be no story today,” he said.

Mabus said the investigation began in May 2010, after Navy officials began seeing “suspicious claims and invoices” from GDMA. Still, the Navy continued to do business with GDMA, something Mabus defended.

“Some have questioned why GDMA won contracts after NCIS opened an investigation. And I think the answers are very straightforward. First, the information about the investigation was restricted primarily to law enforcement personnel with a few exceptions to prevent leaks. And as I've noted, even that precaution was not enough for a time, because an NCIS agent was actively obstructing the investigation by helping Leonard Francis avoid detection,” he said. “Second, contracting officers certainly were not told because that could have compromised the investigation. And finally, if the Navy suspends a company's ability to compete for contracts or refuses to award a contract to a low bidder, we are required by federal law to give that contractor a reason. In this case, a notification would have tipped off GDMA that something was wrong.”

While NCIS was investigating these claims, it found that one of its own agents was involved and came up with a plot to catch him. They filed a false report to the agent saying the investigation against Francis was going to be closed. This gave Francis the confidence to travel to San Diego to meet with Navy officials, purportedly to do more business with the Navy.

Instead, he was arrested.

“During this investigation, NCIS uncovered critical evidence that connected one of their own agents to suspicious activity, and NCIS deliberately planted bogus information in NCIS reports in order to protect this investigation, and did so without any leaks outside the investigation,” Mabus said. “According to the U.S. attorney's office, shortly after NCIS filed a false report to mislead the agent suspected of involvement, and this report said that the investigations against GDMA and its owner, Leonard Francis, were about to be closed, Francis traveled from Singapore to San Diego for a meeting with Navy officials, which allowed law enforcement officials to arrest him.”

Navy officials said the loss of the GDMA contract won’t affect the Navy’s ability to operate in the Asia-Pacific region. “We do know our requirements, we have done some surveys, site surveys. We have alternates, alternatives. And so although it's been difficult putting new contracts in place, there were competitors out there, and we put replacement contracts in place to support our presence forward,” said Rear Admiral John Yuen, commander of the Naval Supply Systems Command.

Francis has pleaded not guilty and is being held without bail in California.