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Roundtable: Lessons from the Fat Leonard bribery scandal

 June 24, 2022 at 1:35 PM PDT

S1: The Fat Leonard scandal has shaken the Navy to its core as we await a verdict in the saga's most recent trial. We're looking at how the Navy has been changed by the scandal. Nearly ten years on , I'm Matt Huffman and this is KPBS roundtable. Thanks so much for joining us This Week on KPBS Roundtable. After some three months of testimony and several days of deliberations , the jury is still out. And the latest case involving the Fat Leonard Navy bribery scandal , it's become the largest in U.S. Navy history. Joining me to talk not just about this current court case , but also all that's come before it is Washington Post investigative reporter Craig Whitlock. Andrew Dyer , he's the military reporter from the San Diego Union-Tribune. And Steve Walsh is here. He's the military reporter here with KPBS News. Welcome to you all. Steve , we want to start off with the verdict that we're currently waiting for here. What specific about this case and why did it take so long to get to this point ? Right.
S2: So , I mean , this has gone on for 14 weeks. These are the last five officers from a 2017 indictment. They're all charged with bribery and conspiracy. They were part of the senior staff of the USS Blue Ridge , the flagship of the Seventh Fleet. They had a lot of authority about like where ships could go and others were just influential within the Pacific fleet. So among the five officers is a retired Rear Admiral , Bruce Loveless. He was the leading intelligence officer. Basically , he was in charge of ID'ing threats. He's accused of taking bribes and attending wild parties. Some of these parties now went on for days that cost thousands of dollars. Sex workers were present , expensive cigars , top shelf champagne , probably. These are going to be the last five to face charges in this case. The statute of limitations is kind of running out. So you've already had 29 officers pleading guilty before this trial began , including two in the weeks just before the trial. So , you know , one of the men who pleaded guilty , the commander , Steve Shedd , he testified during this case that what the defendants did amounted to to treason.
S1: And we know that this corruption scandal , it goes back years. And it's all centered around former Navy contractor Leonard Francis. He's also known in this as Fat Leonard. And Craig , can you describe who he is and how his involvement ultimately led to dozens of admirals being investigated ? Sure.
S3: So Fat Leonard is Leonard Glen Francis. And he is quite a character. He's a malaysian businessman. He's now 57 years old. And the reason he's called Fat Leonard , of course , is because he's he's a pretty big guy. Years ago , he actually weighed upward of £500 until he had to have a tummy tuck surgery. These days , he's about £350 , so he's quite a big guy. But he was a self-made businessman in the Navy trade. They call it a husbanding contractor. So his company , which is called Glen Defense , Marine , Asia resupplied Navy ships in ports throughout Asia. Of course , the U.S. Navy has a large base in Japan , but any time U.S. Navy ships had to visit other ports from Hong Kong to the Philippines , Malaysia , Singapore , Australia , South Korea. Leonard's company would resupply these ships in port and was sort of an all purpose fixer. So starting in the early nineties , his company started to gradually gain Navy contracts to supply Navy ships and subs in ports throughout Asia. And of course , that's the biggest area of responsibility for the U.S. Navy. And he ended up making millions and millions of dollars. The thing is , the backdrop to this trial is that he was fleecing the U.S. Navy and U.S. taxpayers of millions and millions of dollars by bribing U.S. Navy officers and contracting officials to look the other way while he would gouge the Navy for its services. Hmm.
S1: Hmm. And we know that he did not testify in this current trial , Andrew. Do we know why that is or is the government said why they're not using him ? No.
S4: There's no official government explanation for why he's not testifying. We can only speculate. Now , Leonard did submit a deposition at a military court martial of another conspirator. And in that deposition , defense attorneys kind of really kind of torn apart during that that court martial. Then , of course , this year there was a podcast where Leonard did a series of interviews with a journalist and said a lot of things that I don't know. He had necessarily told the government in all of his , you know , statements to them. So there are some questions on the back end about what he said and the quality of the evidence. And , you know , perhaps prosecutors just deemed it too much of a risk to put him on the stand.
S1: And Andrew , he was ultimately held accountable for his actions. Right. Can you tell us what his current situation is ? We're talking about Fat Leonard there. Sure.
S4: Sure. He pleaded guilty years ago , but he has never been sentenced. And that's because he's been waiting to testify at this big trial , the seventh Fleet Command staff. He lives in a last we've heard a an apartment with this where his physician lives and he's got some of his kids living with him. According to what he told the podcast , he is not in good health. Craig mentioned he had bypass surgery. He's also , last we heard , has renal cancer. I don't know what the status of him is , but that is. But that's the last we've heard.
S3: Know he was arrested in a sting operation almost a decade ago. And as Andrew point out , couple of years after that , he pleaded guilty and agreed to become a cooperating witness for the Justice Department. And he really became this golden goose of a cooperating witness. He one thing he had done over the years is he had kept thousands and thousands of emails , photographs , receipts. He really he had boxes and boxes and computer servers that were just full of his communications with U.S. Navy officers going back to the early nineties. So from the Justice Department's perspective , he was this incredibly valuable , cooperating witness. And Leonard was was willing to tell all in exchange for a lighter sentence. So even though , as Andrew pointed out , he pleaded guilty back almost seven years ago now he's been waiting all that time for all these other cases to be resolved in hopes that the judge will let him go home to Malaysia. But he's been waiting in this sort of this strange situation where he's sick and he's staying in an expensive townhouse in San Diego , but he can't go home until this this this trial is resolved. And everybody thought for years , Leonard was going to be the the showcase witness at this trial , that he was the guy who knew all these Navy defendants. He had witnessed their their misconduct , and he had receipts to show what had happened. But after he gave this podcast interview and as Andrew pointed out , he was a pretty terrible witness under deposition , I think the Justice Department just decided that this was going to be too much of a sideshow and would risk their case. So they decided not to put him on the stand. Right.
S2: Right. I mean , Leonard himself , he tends to brag a great deal in this because this podcast came out just before the trial. They tried to subpoena the tapes eventually. They're the people behind the podcast who put all 20 hours online. I have not gone through all 20 hours , but I've gone through a lot of it. And , you know , the upshot is that , you know , he brags that half of the officers in the Navy would have gone to jail after if they went after everyone who was caught up in the scandal. He says they haven't gone after the top officers that were involved. You know , he paints himself as kind of this victim. He says that officers demanded bribes. They demanded sex. They wanted to be wined and dined , and that's what they expected. And he just accommodated them. He claims to have sex tapes stashed away , though he hasn't provided a lot of new allegations and proof of that. Yeah , but though it's clear he would groom officers often through , like , multiple tours of duty , he says the NCIS agent that ultimately pleaded guilty in that case , he he did he volunteered the information to Leonard because the two party together and he just told them about the investigations into Leonard. So he tends to brag a lot , which tends to not make him , I think , a very good witness in court. And , you know , he's easily impeachable by defense counsel , I think.
S1: You're listening to KPBS Roundtable. And this week our guests are Craig Whitlock from The Washington Post , Andrew Dyer from the San Diego Union-Tribune and KPBS. Steve Walsh. You know , when we talk about this , everyone has seen the headlines over the last ten years , bribes involving lavish dinners , prostitutes , vacations , even large sums of money. And there's even a report about a TV script that's being written about all this. With that in mind , I'm curious about how you all approached this story when so much of it is scandal and salacious. And Craig , I know that you're writing a book about all this , so this question goes to you first , but we want to hear from everyone. Yeah.
S3: Yeah. So there has been a lot of great reporting by Steve , by Andrew and others about , like you said , the the highlights of this case and the extent of it , the number of officers who were bribed by Leonard Francis. I think the story that we're still trying to tell is the full sweep of what Leonard Francis did. And the Navy's tried very hard to sweep that under the rug. They don't want the public to know just how many officers took prise from Leonard or were implicated in these dinners and parties and things he had. And what the record shows so far is that Leonard really started this giving bribes back in the early nineties. You know , he had contracts with the Navy for almost a quarter of a century , for hundreds of millions of dollars. And that while this trial is giving us a glimpse into some of that , it's the first case to actually go to trial in civilian court. It still gives us a pretty narrow view of only about five years of what happened in the Seventh Fleet. And the fact is , Leonard was bribing people back in the early nineties up until the day he got arrested in 2013. And that story of how did this guy , this Malaysia , you know , this fat Malaysian businessman who had a felony record dating to his early years , how was he able to get these contracts with the U.S. Navy ? How was he able to tempt so many senior officers to take prostitutes , to go to these over-the-top dinners , that costume tens of thousands of dollars at a time ? You know , how did the the Navy leadership knew this was going on to various extents for for more than 20 years , yet they didn't do anything about it. And what does that say about the Navy culture and its inability to police itself ? And I think that broader story. Well , we we know it's a fascinating and troubling story. I think that hasn't been fully documented yet. And that's something I'm hoping to tell. And I know Andrew and Steve have been chipping away at it as well. But it's something the government very clearly doesn't want the public to know. The full story.
S1: And we are going to get to that in just a second.
S4: He really created a family , a big mafia. He treated these guys like family. They call each other bro. He was like their friend and he really was like that puppet master with officers on strings on his fingers. And not everybody at the end of those strings knew what the other strings were doing. But he really was able to manipulate the Seventh Fleet like a like a puppet master.
S2: That's the first time in ten years that they've actually had a piece on NPR on this case. We've got cavorting at the MacArthur's suite in Manila with prostitutes and the like. It's it is amazing that it hasn't had more traction. I mean , Craig has done some outstanding work on the national level. I mean , absolutely outstanding. He's really the one that has kept this alive. But you really haven't seen a lot of congressional testimony over this. You really haven't seen I mean , it's mostly been local reporters who have been at the trial. I'm actually surprised it hasn't gotten more attention than it really has.
S1: And Andrew , go ahead.
S4: So at the Union-Tribune , you know , I'm not the reporter that's in court following the trial. And we have other great reporters , Kristin Davis and Greg Moran , who've done the work in court. For me , it's always been a kind of like a document , you know , going through all of these Navy records and court records and really kind of pulling at those threads and trying to kind of figure out what the Navy doesn't want you to know. You know , they redacted names on all of their internal administrative records of all of the people that , you know , maybe didn't do enough to get charged criminally , but were also involved in the conspiracy. You know , the Navy protected all of those guys. I should say that it wasn't just male , although it was predominantly male officers. There were also female officers involved.
S1: Craig , you referred to this a bit earlier. And Steve , we know that you recently had a story about how the Navy culture that led to these bribes is unchanged. Here's a little bit of what Dan Grazer from the Project on Government Oversight said just.
S3: Became kind of the way business.
S1: Was done within the Seventh Fleet. And , you know , the longer.
S3: It went on , the more people.
S1: Got involved in it and.
S4: The more.
S1: Normalized that behavior. Became.
S3: Became. And so we ended up with.
S1: A massive scandal that we we have.
S2: You know , captains have less discretion on which ports they can visit and the kind of things that they can order once they're in port. You know , the company , though , they replaced Francis Molest , got into trouble in 2021 for bribing Navy officers. So crazier things that the military has just become too reliant in general on contractors. And some of this work needs to just be brought back in house. But I mean , on the ethics side , you know , I talked to Pauline Shanks , Corinne , who teaches ethics at the Naval War College , and she says they still don't have a case study about Fat Leonard in the in the War College. So , you know , it comes up , but it isn't taught. You know , there's a real moral failure here , especially the treatment of women. It was just appalling , I think , of after Tailhook , the scandal in the 1990s involving naval aviators harassing and molesting female officers. There is at least a serious attention to ethics afterwards. Here you have hundreds of officers implicated in participating in even worse behavior in many cases. And it hasn't created the same kind of scrutiny. You know , there just may be a real racial perspective here. These these women weren't Americans. They were people of color. It seems like the bottom line is , you know , if you're the you're asking your legal officer if all this stuff is okay and if you can attend , then you probably shouldn't be going.
S1: And Craig , go ahead.
S3: Yeah , I think Steve's really on to something here is that it's a real strident unwillingness on the part of the Navy to examine the big and bigger cultural issues. There was this this mindset for many years that when the US Navy officers would go to what they call Westpac Western Pacific to do that part of Asia , where Leonard was in business , that it was kind of like going to Las Vegas. You know , what happens in Vegas stays in Vegas. And they could they could act in ways in the Western Pacific that they wouldn't do at home or wouldn't do in Washington. And they just wouldn't talk about it. It wasn't that these Navy officers and admirals in particular didn't know what they were doing was unethical. When you take prostitutes , when you go to Leonard's parties where he's you know , he's he's buying these ten course dinners with crystal champagne and the Navy officers are paying nothing or paying 50 bucks. They all know it's against the rules , if not a violation of federal law. But they're looking the other way and they're taking their cues from other officers or high ranking people. And this went on for years and years. And I think it's the Navy's reluctance to say , what does this say about ourselves in our service and our values and our leadership ? It doesn't want to touch that issue. And that's why it's been very difficult to report on the facts of this case. I mean , Andrew and the San Diego Union-Tribune have filed numerous Freedom Information Act requests to find out what happened with these Navy officers who were supposed to be disciplined. I did the same. I've had to file a foil lawsuit against the Navy in federal court , and the Navy's been fighting it for years because they don't want this documentation to come out for the public to be aware of the scope of what people were doing and why. But , you know , yes , it was a contracting problem. Leonard bribed contracting officers with hundreds of thousands of dollars. But beyond that , it was a a cultural and a leadership problem in the Navy , where the admirals , the brass , were aware this was going on for years and years. But they looked the other way if they didn't even protect themselves. And I think that's the bigger issue that the Navy hasn't wanted to address. It's similar to the Tailhook scandal from the early nineties. I think the the Navy's lesson from that is they didn't want to go through another Tailhook like they could with Fat Leonard. And so the instinct has been to suppress it instead of air it out.
S1: Andrew , you're a veteran and served in the Navy.
S4: I was a ship's company on the Kitty Hawk out of the coast of Japan from 23 to 27. Then I was ship's company under Ronald Reagan from 2010 to 2012. You know , when I got to the ship as a 23 year old airman , all I heard about was , wait till we get to Thailand. Wait till we get to Thailand. There is a culture on these ships because , you know , the work is hard. You work seven days a week. There's no weekend on on a Navy warship. You work seven days a week. And so by the time you hit a port. You really feel like you are owed a good time. And these ports , there are entire economies built around providing that good time via bars and restaurants , hotels and and sex workers. When I was on the Reagan after the tsunami in Japan , we thought no ports were going to take us because we had got hit with radiation. And there was some question of we even get to hit a port. And in the beginning of May , we were going to forget in Thailand , this was one of Leonard sports , I believe , and on the site TV , the TV station inside the ship , you know , they give port briefs and liberty briefs and safety briefs. And one of those briefs was , hey , listen , it is against the UCMJ to patronize prostitutes. But here's how it works in Thailand. You've got to pay the bar fee. You got this and that and this and that for your awareness. It's against the regulations. You know , don't do it. But here's how you do it. That culture , that was in 2011. I don't know if that Port Reef is still given in that manner , but it's definitely a culture in the Navy which didn't even have women on ships until the mid-nineties of sailors in port drinking and women. That's very much part of that life at sea.
S1: Well , and Andrew , you recently had a story along with your colleague Christina Davis , about how not everyone involved in this Fat Leonard corruption scandal has been ultimately held accountable.
S4: And this goes back to Steve's point about why it's not a bigger story. And the reason it's not a bigger story might be because it's such a complicated story. You know , you have different justice systems. You have the federal justice system , then you have the military system. And then inside that military system , you have criminal and administrative. So you have different pathways with which the military can dole out punishments. And on the military criminal side , you have things like court martial and these kind of secretarial censures that come out that are all administrative , that's all public , and you know , who was involved. But if you get an administrative finding , non-judicial punishment or just you get looked at and they say you did it , but that's okay , you can keep serving. Then all of those administrative actions are not public record. And although they did release the documents hundreds and hundreds of pages of these records , you know , they redacted all of the names. So , you know , in one case , there were these two Navy captains who were literally Liberty buddies off the Carl Vinson did the same things with Leonard when they got back to San Diego. One of them actually gave Leonard a roster of every admiral in the Navy and their spouses contact information because like a mafia , Don Leonard would also try to go through the spouse , by the spouse to corrupt these officers. But that officer received an administrative action and his name was never released. For the second officer was court martial. So you have people doing the same thing and getting , you know , explicit different punishments.
S1: And as we wrap up this segment here , a question for all of you. Where do we go from here ? You know , is this truly all coming to a close ? And we'll start with Craig. Craig , with you on this one.
S3: I think it will come to a close is people want to know what happens to Fat Leonard , right. He's been waiting for years to get sentenced and he's scheduled to get sentenced , frankly , as soon as this trial's over with. And that'll be a fascinating question. He's pleaded guilty to these epic levels of corruption. Will the judge send him back to prison in the United States or will the judge release him back to Malaysia on the idea that his cooperation was so vital that he should be allowed to go ? So I think that's a major question. What happens to Leonard ? I just want to touch base with your your question about why this hasn't received more attention. And quite simply , I think some of it is because it's not a made for television story. Most of this reporting has come in the form of documents. It's very difficult to cover even in court. If you're a reporter like Steve Wallace , you can't bring in your recording equipment. You just have to bring in a pen and a notepad. Can't bring in television cameras. And until Leonard gave this podcast interview , the public hadn't seen or heard from Leonard Francis so that , you know , he hadn't appeared in court very much. There was there were no interviews with him. So if you don't have that that video , that picture of the people involved and can't tell that story in the courts , it's a hard one to tell , I think.
S2: We're dealing with statute of limitations for most of this stuff. These are the last site. Everyone else pleaded guilty. These are the only five who actually went to court. And as Craig was saying , we'll find out whether or not Francis , what happens when he's sentenced in July. There are several other off. Others who have pled guilty but had not been sentenced. We'll find out in the next month or so. Well , you know how much jail time they receive. I know from just those raw tapes from the podcast , Leonard thinks he's going to get time served and that he's already passed his his time. Now , looking at some of the court documents , though , there's talk of sending him back and that his health issues will be the problem of the Bureau of Prisons. So , you know , that's unclear as to whether or not we've seen the last of Leonard.
S4: I don't know that it is going to become more interesting over the next few years. I think barring. More revelations , hopefully in Craig's book. It's really going to take that level of time , attention and work from from reporters like Craig to bring this to a point where it demands that kind of attention.
S2: A couple of jurors were sick , so they didn't deliberate much of this week. So one would expect I mean , the trial went on for like four months , but one would expect in early next week , we might see something finally.
S1: Well , we're going to keep an eye out for a verdict on that case. I want to thank you all so much for being a part of this week's discussion. Once again , our guests have been Steve Walsh from KPBS News , Andrew Dyer from the San Diego Union-Tribune , and Craig Whitlock from The Washington Post. You can listen to the KPBS Roundtable podcast anytime at KPBS dot org. I met Hoffman. Thanks so much for being here with us. We'll be back with you next week.

Leonard Glenn Francis, also known as "Fat Leonard" at a Navy event.
Fat Leonard Podcast
Leonard Glenn Francis, also known as "Fat Leonard," at a Navy event.
As the legal case nears its end, we take a look back at the largest scandal in Navy history.

As the Fat Leonard Navy bribery scandal draws to a close, we take a closer look at the main character behind the scandal and what the Navy has learned in the wake of its greatest scandal.

Joining KPBS reporter Matt Hoffman was Washington Post investigative reporter Craig Whitlock, KPBS military and veterans reporter Steve Walsh, and San Diego Union-Tribune military reporter Andrew Dyer.