Since 2013 a growing number of able officers have been appearing in federal court accused of taking bribes in exchange for selling classified information. The Navy is struggling to answer the embarrassing questions raised by the case of Fat Leonard Francis. The military reporter has this report.It's one of the largest bribery scandals in the history of the Navy. This businessman often known as Fat Leonard used wild sex parties to coax maybe officers to steering ships toward parts -- ports that he owned.The conduct we've investigated occurred in 10 countries and lasted more than a decade.That Leonard handed out a long list of bribes such as tickets, gifts, designer handbags and the services of prostitutes in the hundreds of thousands of dollars.Reporter: Prosecutors have charged 21 officers since his arrest in 2013. Not only is this a major criminal matter but also a public embarrassment for the Navy.Fat Leonard treated the officers to decadent orgies in Manila.In March the late night host picked up on one of that rounds of enticements.Including a multi-day party with a rotating carousel of prostitutes. The carousel of prostitutes is the most popular ride at prostitute whirl. [ Laughter ]Aside from the embarrassing headlines the Navy is putting new attention on the way teaches ethics.I am a professor of ethics at the Naval College.He came to the college three years ago, partly to rebuild the way the Navy teaches ethics and character.People like Fat Leonard try to find people's weaknesses. We are all human beings and we all have our weaknesses.The response is still a work in progress. Now the Navy is in the middle of teaching and ethics course taken online. Instead, there will be more face-to-face training to encourage an ongoing dialogue. They are also changing the officer evaluations.They are tearing down the forces all around us -- severely. Inside and outside the military.Reporter: The chief of Navy operations said they want the officers to prove that they can counter those tearing down forces beginning sometime this summer. Evaluations will emphasize character aspect of leadership. The Navy will screen officers for ethical ability when they come up for promotion.We need to do everything we can to strengthen our people to resist those tearing down forces so they remain on the road toward the coming the leader we want.Reporter: Military observers say it's not easy because of the culture of the Navy. Some officers were suspicious of Fat Leonard and tried to raise an alarm that he was overcharging the Navy but he was often able to maneuver around them with the help of other officers who are now under federal indictment. Dan Grazer is with this project on oversight and specializes in national security.The way the system is set up today, it fosters a culture of careerism. Where it doesn't -- it doesn't pay to rock the boat. If you are a squeaky wheel rather than getting the grease you will get sledgehammer then thrown away.He teaches applied ethics at Pacific Lutheran. Many of the students are in the military. She said the Navy is quick to put all the blame on individuals.That's problematic. You don't have individuals in an institution acting in this way unless there is some kind of culture facilitating that work making it possible.Reporter: She urges the Navy to look at its own culture which produced so many officers that buckled under temptation. She said it could still be years before we know if they have solved this crisis.C Walsh, K PBS news.This collaboration reports on American military life and veterans. Funding comes from the Bob Woodruff foundation.Joining me is reporter Steve Walsh.Welcome.Hello.You mentioned the Navy will now screen officers when they come up for promotion. Do we know what criteria they will use?All of this is very new. Thinking about Fat Leonard, this started in 2013 when Leonard Francis was taken into custody. But, it's very much a work in progress when it comes to dealing with ethics reform. The reform they are talking about -- that Admiral Richardson alluded to, they couldn't -- couldn't give me a copy of it.Generally, how do the experts say to teach and test for ethics?They are trying to find out what sticks. They are borrowing ideas from corporate America. During peace time they had an online ethics evaluation. You click through it and you answer multiple choice. Everyone did it. It was a requirement. They found that it's not particularly effective if you wanted to -- want people to take these things seriously. They are throwing this out. They are throwing it out and trying to come up with ways that you can involve especially junior officers -- they will do things through social media where they allow people to have their own ethics challenges and workshop these out. This wants is to be daily conversation, the kind of the routine of the ship.Steve, I was interested in this feature. We heard from the naval war college ethics and structure he said he was offered a bribe in Singapore more than 20 years ago when he was an officer. Did he tell you what happened?The point he was trying to make is that these things start Sutley -- subtly in small. He didn't quite catch on to it and then it became clear that he was being bribed. When he didn't accept the bribe they became more serious. They threatened to go to the ambassador. That's the sort of thing they try to do -- steel people's spines. To recognize this and stand up to it, in the end also a pastor and she felt that his duty to the ship outweighed any personal game and he was incensed that he was approached.They wanted to make sure that the average officer -- we are talking about conduct here -- for the most part we are checking about selling classified information. These are the movements of the fleet where Ronald Reagan was going and things like that. Was selling this information to a private contractor. And NCIS officer were passing along information. This is serious. They were selling these things to Leonard Francis for what seemed like a song for the night with a prostitute. Panty dinners in Manila. A couple of nights in a hotel. In the end it seems like they were being treated like a big shot in exchange for something -- real and genuine naval secrets.Reporter: What were they tearing down forces? To see me unscrupulous people or is he talking about larger cultural issues?I think what he's talking about is that these things are happening all around. The bribe city points to happen all the time. What they need to do is bolster the individuals. That's what he's talking about. He's talking about making sure that they understand -- not only the difference between right and wrong and that they have an ethical obligation to the Navy enable tradition.One way the Navy could have put this down has little to do with ethics. Couldn't better fiscal oversight have looked into this? IsThere are three dimensions and Admiral Richardson agreed.1 -- prosecution -- and the guilty and put them in jail. They are doing that. This case is probably going to keep going -- at least for a year or more. Then, you reform the system. They found that captains have a lot of latitude. They are allowed to go out there -- if they decided they needed three tugboats they could sign off on that.If the next destroyer only needs one, there's something wrong.In situations with waste removal, some of the captains signed off to pump more waste than the ship had a capacity to hold. There were some giant red flags out there. They have standardized the process, not just in the Pacific but throughout the Navy -- to get rid of some of that.The third element is the ethical dimension. There will always be around -- a way around the system. How do you get the officers to stand up to that?Once a -- one thing some people said -- Reporter: Trying to get people to become more ethical and blow the whistle on things like this -- to change the way the Navy looks at finding people for promotion. You said that they look for people who don't cause trouble. How does that culture change in the Navy?It's an up and out system. If you don't please your superiors and make rank, you don't stay in the Navy. Is a very cozy system. System so cozy that even if you are leaving the service you want to be friends with everybody who's in the service because you probably want a job with the contractor or someone else out there and you want to keep the contact intact. This is a handwashing system. It's hard to break that and it's hard to stand up in the military and say listen, this is wrong that we have to solve it.I've been speaking with the military reporter, Steve Walsh.Thanks, Marie.
It has been nearly four years since Malaysian businessman Leonard Francis was arrested in San Diego in 2013, and the Navy is still struggling to answer the embarrassing ethical questions raised by the “Fat Leonard” bribery case.
Francis used wild sex parties to coax Navy officers into steering ships to Pacific ports owned by his company, Glenn Marine Group. Prosecutors have charged 27 people, including 21 naval officers, in connection with the scandal. Seventeen of those people have pleaded guilty, including an active-duty admiral.
Hundreds of pages of court documents show Francis handed out numerous bribes, including concert tickets to Lady Gaga, said Mark Pletcher, the assistant U.S. attorney who has been handling the federal cases in San Diego.
Bribes included “lavish gifts, designer handbags and the services of prostitutes, counting into the hundreds of thousands of dollars,” Pletcher said.
Francis pleaded guilty in 2015. He has reportedly been working with prosecutors to provide evidence of a bribery scheme that dates back to at least the mid-2000s and involves dozens of naval officer and civilian contractors.
The case has not only been a major criminal matter; it has also been a public embarrassment for the Navy.
Television's "The Late Show" host Stephen Colbert riffed on the scandal during a monologue in March, just after a particularly embarrassing round of indictments that implicated officers from the USS Blue Ridge, the flagship vessel of Pacific Fleet. According to the indictment, a sex party at the Shangri La Hotel in Manila involved artifacts from Gen. Douglas MacArthur.
The embarrassment fueled the Navy’s new attention to ethics.
“We’re all human beings. We all face temptation,” said Tom Creely, who teaches ethics at the Naval War College. “A lot of times, people such as Fat Leonard, he tries to find people’s weakness.”
The Navy’s response is still a work in progress. Just now, the Navy is in the middle of scrapping a yearly ethics course that could be taken online. Instead, there will be face-to-face training to encourage an ongoing dialogue. Navy officials are also changing officer evaluations.
“The tearing-down forces all around us are severe, both inside and outside the military,” Chief of Naval Operations Adm. John Richardson said. “We just need to do everything we can to strengthen our people to resist those tearing-down forces so they remain on the road to becoming the leaders that we want.”
The Navy wants officers to prove they can counter those “tearing-down” forces. Beginning sometime this summer, evaluations will emphasize the character aspect of leadership. When officers come up for promotion, the Navy will screen them for ethical standards.
But military observers say making the shift is not as easy as it might sound, in part because of the culture of the Navy. When the scandal began in the mid-2000s, some officers were suspicious of Francis and tried to raise an alarm that he was overcharging the Navy. But Francis was able to maneuver around them, with help from other officers who are now under federal indictment.
“The current system fosters a sense of careerism. It does not pay to rock the boat,” said Dan Grazier, a national security specialist with the Project on Government Oversight.
He said the Navy needs to make it easier for officers to stand up to their superiors without risking their careers.
“If you’re the squeaky wheel, rather than getting greased, you’re probably going to be sledge hammered and thrown away,” Grazier said.
Paulene Shanks Kaurin teaches applied ethics at Pacific Lutheran University. Many of her students are in the military. She said the Navy is quick to put all the blame on individuals.
“And I think that’s problematic,” she said. “You don’t have these many individuals in a system, acting this way without an institution that makes that possible.”
She urges the Navy to dig deeper and examine its own culture, which produced so many officers who buckled under temptation. She said it could still be years before we know whether the Navy has solved the ethical crisis exposed by Fat Leonard.
