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As jurors deliberate in the Fat Leonard case, Navy culture that spawned the bribes is unchanged

The Navy’s Fat Leonard bribery scandal has taken center stage in San Diego for nearly a decade.

But it does not appear that one of the biggest corruption cases in the Navy's history garnered enough attention on the East Coast to trigger substantive change.

More than two dozen Navy officials have stood in federal court and pleaded guilty to taking bribes to help Malaysian defense contractor Leonard Francis defraud the Navy.

Francis used U.S. Navy officers to steer ships to his ports in the western Pacific. Francis, called Fat Leonard for his size, greased the wheels with gifts, sex workers and lavish parties with scantily-clad women.

Vice Admiral Craig Faller attended at least one party as a ship’s captain. U.S. Sen. Elizabeth Warren, D-Massachusetts, pressed him about it, during a confirmation hearing in 2018.

“What do you say to women officers when they see this is the kind of event you have attended?” Warren asked.

Faller responded: “Senator, I have always had the utmost respect for all service men and women.”

The Navy cleared Faller and other officers of wrongdoing. Francis pleaded guilty in 2015 to defrauding the Navy out of at least $35 million.

But despite Senator Warren’s high profile exchange with Faller, it is one of just a handful of times, the so-called Fat Leonard case has come up on Capitol Hill during the nearly decade-long probe.

It’s also still unclear how much the scandal has changed Navy culture.

“It's shocking how little people, even today in Washington, really even know about Fat Leonard,” said Dan Grazier, of the Project On Government Oversight. “It rarely makes the news here.”

He said hundreds of officers watched Francis lay out the red carpet, sponsoring wild parties in ports around the western Pacific.

“It just became kind of the way business was done within the 7th Fleet and you know the longer it went on, the more people got involved in it, and the more normalized that behavior became, and so we ended up with a massive scandal that we have,” Grazier said.

Among the Navy officials on Francis’ payroll was an agent for the Naval Criminal Investigative Services John Beliveau, Jr. He pleaded guilty to taking bribes to keep Francis up to date on the Navy’s own investigation and was sentenced to 12 years in prison in 2016.

Once the scandal broke, the Navy took away some of the authority from ship’s officers to decide which ports to use. The contracting process was standardized.

Though the Navy tightened up the paperwork, it hasn’t taken a hard look at underlying culture which allowed officers to condone the party atmosphere, according to Pauline Shanks Kaurin, who teaches ethics at the U.S. Naval War College.

“It’s not something, at least in my circles, the Navy is talking a lot about and so I'm not sure that we've learned the lessons or have thought about what this means for Navy culture,” she said.

Francis was arrested in San Diego in 2013.

But Kaurin said the war college still hasn’t incorporated a case study about the massive bribery scandal into its ethics curriculum.

“One senior leader said to me, '`Listen like I know people who were involved,’” she said. “And I've heard from other senior leaders things like 'well, I had — you know — a friend, a good friend, whose career was ruined because of this.' So, people don't want to talk about it.”

When students talk about it in class, Kaurin said they talk about “different spanks for different ranks," which refers to higher-ranking officers being treated differently.

Retired Navy Captain Ron Carr said the case cast a long shadow over everyone who served in the Pacific during the 2000s.

“It really has put mud on all of us,” Carr said. “For all of us who were not involved with this, because there's always that assumption that potentially maybe we just didn't get caught.”

Given the size of the problem, Carr said he is disappointed that the Fat Leonard case hasn’t shined a brighter light on Navy corruption.

“I think the challenge from a publicity point of view is that it just dragged out for so long, here we are having this conversation when he was arrested nine years ago,” Carr said.