Adm. Bill Moran, vice chief of naval operations, said Wednesday that the Navy is addressing new policy reforms in the wake of the “Fat Leonard” fraud and corruption scandal.
Moran, who said he couldn’t comment directly on the case because it remains an ongoing investigation, said there are changes and policy efforts underway to thwart a repeat of one of the biggest scandals to hit the Navy.
Among the changes, Moran, who made the comments during a congressional hearing, said the service has installed new layers of oversight in its contracting process for overseas ports.
“Most of the issues involve contracting for services on overseas ports,” he told a House Armed Services Committee subpanel. “So we have taken a very strong turn on the process by which we do that. We put layers of oversight into how those contracts are issued and who is issuing them.”
The massive Justice Department case involves Malaysian defense contractor Leonard Glenn Francis, also known as “Fat Leonard,” who traded money, travel, gifts and prostitutes with officers in the 7th Fleet for classified material about U.S. ship and submarine schedules. More than two dozen have been criminally charged in the case, including a former Navy commander who pleaded guilty last week to a federal bribery charge.
The case is the biggest facing the Defense Criminal Investigative Service, which is the criminal investigative arm of the Department of Defense Office of Inspector General, said Glenn Fine, the DOD’s principal deputy inspector general. Francis’ contract firm, Glenn Defense Marine Asia, orchestrated a scheme to defraud the Navy of tens of millions of dollars by routinely overbilling for goods and services, Fine said.
The Navy has established a Consolidated Disposition Authority, or CDA, to determine whether hundreds of Navy officers should be charged under the Uniform Code of Military Justice or receive administrative action, Fine said. The CDA has already adjudicated more than 300 cases, he said.
“This is one of the largest and most complex public corruption criminal cases in DOD history,” Fine said. “And it involves disturbing and widespread ethical lapses throughout the Navy’s 7th Fleet.”
The comments on the case Wednesday came during a wide-ranging hearing before the House Armed Services subcommittee on military personnel that focused on a slew of senior officer misconduct problems.
Rep. Jackie Speier, D-Calif., the ranking Democrat on the subpanel, expressed concern that a whistleblower didn’t report the scandal early on since it entailed such a large network.
“It is probably the most egregious case in the history certainly of the Navy if not the military in general,” Speier said. “Because so many people were involved and so many people corrupted by this individual, I’m stunned there weren’t any bystanders that spoke up.”
In an exchange with Speier, Moran agreed there will be an examination once the case is closed to identify the holes in the chain of command that allowed the corruption plan to move forward.
“We’re hopefully getting to the very end of this now,” he said of the case. “When it is done and all the files are turned over to us, we will do that. There is a process in place to make sure we evaluate every single case that comes to the Navy, whether they are handled by the Department of Justice or not, they come to us for final resolution.”
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