Navy Says More to Come in Contracting Scandal
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WASHINGTON — The Navy has not seen the end of the multimillion-dollar bribery and contracting scandal that has implicated several contractors and naval personnel, Navy Secretary Ray Mabus said Friday, warning that more disclosures are coming.
Speaking to reporters at the Pentagon, Mabus declined to reveal how much money is involved in the widening probe, but officials have estimated it could be in the hundreds of millions of dollars. He said the Navy will continue to aggressively investigate and prosecute any naval officers or contractors who may be involved.
So far, six naval officers have been implicated in the bribery scheme, including three who have been arrested. The case involves allegations that officials accepted pricey vacations and prostitute services in exchange for providing information and advice to an Asian defense contractor who then overbilled the Navy for port services.
An agent with the Naval Criminal Investigative Service, John Beliveau II, pleaded guilty Tuesday to bribery charges. And officials have said his plea deal could expand the investigation if he cooperates with authorities as part of the agreement.
“I expect we will continue to see headlines resulting from the discovery and disposition of these cases,” Mabus said. “The Navy has a long tradition of transparency when we uncovered allegations of misconduct, particularly against high-ranking officers, because not only can the spotlight act as a deterrent, but mostly because it’s the right thing to do. I would rather get bad headlines than let bad people get away.”
Beliveau acknowledged keeping Malaysian contractor Leonard Glenn Francis — known in military circles as “Fat Leonard” — up to speed of the yearslong fraud investigation that NCIS agents were conducting into Francis’ company, Glenn Defense Marine Asia Ltd., or GDMA.
In exchange, Francis paid for plane tickets, hotels and prostitutes for Beliveau, 44, according to the plea agreement. Francis has pleaded not guilty in the case that alleges GDMA overbilled the Navy by at least $20 million for port services. GDMA has provided fuel, food and supplies for Navy ships for 25 years.
Two Navy officers have also been charged in the case. In addition, two Navy admirals have lost their security clearances and two other Navy officials have been relieved, but they have not been charged.
Francis was arrested in September. His cousin, Alex Wisidagama, a company manager who was also arrested, also has pleaded not guilty in the case. Navy Cmdr. Jose Luis Sanchez and Cmdr. Michael Vannak Khem Misiewicz have entered not guilty pleas as well.
Mabus addressed questions about why GDMA continued to get contracts even after the company was under investigation. He said information about the probe was kept to a very few people and allowed authorities to collect more information and then leak a false report that enabled them to ultimately arrest Leonard.
Mabus also sought to underscore how much the Navy did to expedite the investigation, and that the service has worked to beef up its policies and regulations for contractors.
He said that, since 2009, Navy has suspended 252 contractors and prohibited another 400 from doing business with the Navy.