Navy's 'Fat Leonard' sex-for-secrets scandal widens, ensnares retired admiral

A retired admiral and five others are charged with accepting bribes of sex, trips, and fancy meals from a Malaysian defense contractor nicknamed 'Fat Leonard' in exchange for classified information, according to an indictment unsealed in San Diego Tuesday.

First Look

A retired US Navy admiral is one of six former officers arrested and charged with bribery in a recently-unsealed indictment, part of an ongoing investigation into the “Fat Leonard” scandal.

Retired Navy Adm. Bruce Loveless appeared in federal court in San Diego on Tuesday. A former intelligence officer for the Navy’s Seventh Fleet, which is responsible for Southeast Asia and Australia, he stood accused of providing classified information and offering preferential business treatment to Malaysian defense contractor Leonard Glenn Francis, known as “Fat Leonard.” In exchange, the indictment charges, he and the other members of Mr. Francis’s “Wolf Pack” received a host of bribes, including meals, hotels, and encounters with prostitutes.

It’s the latest development in the three-year-old scandal, which has spurred introspection about Navy practices and helped compel the Joint Chiefs of Staff to streamline their response to accusations of misconduct within the armed forces in order to restore public trust.

“This behavior is inconsistent with our standards and the expectations the nation has for us as military professionals," Adm. John Richardson, the Navy's top officer, said Tuesday. "It damages the trust that the nation places in us, and is an embarrassment to the Navy."

Francis’s company, Glenn Defense Marine Asia, had long serviced Navy ships in the Pacific, cleaning, refueling, and restocking the ships. Over the course of a decade starting round 2005, Francis and his company worked to develop ties with Navy officers. These Navy officers, in turn, helped recruit others who might be willing to share classified shipping schedules and route Navy ships through ports where Francis’s company could charge fake tariffs, prosecutors allege. In 2007, an email from chief warrant officer Robert Gorsuch told Francis that these officers were developing “personality profiles” on potential recruits, the Associated Press reported.

The rewards for participating Navy officers for this association – which Francis admitted in 2015 cost the Navy $200 million – were substantial. The indictment enumerates the bribes received by officers between 2006 and 2012. One meal, during a 2006 visit to a Hong Kong port, racked up a $20,435 tab. Parties with prostitutes also featured heavily in the indictment’s accounting.

Francis has pleaded guilty to fraud and is awaiting sentencing, the Associated Press reported. Five of the executives of his company have also been charged. All in all, 13 defendants have pleaded guilty so far.

Adm. Loveless was one of three admirals who received a reprimand and retired last year in the wake of the scandal. On Tuesday, he became the second admiral charged in the ongoing probe. According to Patrick Hovakimian, an assistant US attorney, Loveless, “has shown callous disregard for his duties.” Magistrate Judge Mitchell Dembin entered a not guilty plea on his behalf and released him without bail.

"This is a fleecing and betrayal of the United States Navy in epic proportions, and it was allegedly carried out by the Navy's highest-ranking officers," said Alana W. Robinson, the acting US attorney in San Diego.

The ongoing case, along with other cases of improper military conduct, have spurred the Joint Chiefs of Staff to set up a task force to study the issue of disciplinary investigations, they said in a memo to then-Defense Secretary Ash Carter in December. With so many different bodies responsible for investigations, they are concerned that decisions are not being made in an equitable and timely fashion, with troubling implications for the reputation of the armed forces.

This report contains material from the Associated Press and Reuters.