The US Navy’s “Fat Leonard” Scandal: How the Virtuous Fall

Last March, the U.S. Department of Justice unsealed the latest indictment in the so-called “Fat Leonard” corruption scandal that has haunted the Navy since 2014 and continues to grow. “Fat Leonard” is Leonard Glenn Francis, a Malaysian citizen and the owner of Glenn Defense Marine Asia (GDMA), which provided support to the Navy’s Seventh Fleet in Southeast Asia from 2006-2014. When Navy ships pull into foreign ports, local companies are contracted to provide marine husbanding, port security, refueling and waste management services, ground transportation for sailors and Marines in port, etc. GDMA offered these services, but also much more: for a number of senior Navy officials, Francis paid for prostitutes, extravagant meals, luxury hotel stays, and other travel expenses, and provided gifts of both cash and goods. All he asked for in return was assurances that Seventh Fleet ships would use ports Francis controlled, classified information about Navy operations (including ships’ schedules), sensitive information on the business practices of his competitors, and assistance in facilitating a price gouging scheme that yielded GMDA excess profits of $35 million over eight years. The total number of people charged in the “Fat Leonard” scandal now comes to 27, including two admirals, fifteen other senior active duty naval officers, an NCIS special agent, and two contracting supervisors; another 200 additional individuals remain under scrutiny by prosecutors. This was a full-fledged cultural problem, not just a case of a few bad apples.

The details of what these men got up to in port are quite salacious, but my focus in this post is instead on what this scandal exposes about how corruption can spread among decorated public servants and what can be done to prevent similar scandals in the future. Every single one of the senior officers charged had been trained to be self-disciplined and to put mission and country above self—it’s what those of us who serve in the military vow to do. Each officer had a long and distinguished career before becoming entangled with Francis and his lurid scheme. Yet each sold his integrity, and sold out his country, for immediate gratification. Why?

Though I can only speculate, I suspect a sense of entitlement—a sort of adverse response to years of demanding service—had something to do with it. Military officers spend, cumulatively, years away from their families over the course of a full career. They work long hours in sometimes tedious jobs, especially when deployed. They earn a decent salary, but as a general rule much less than they could earn in the private sector. Given their management experience and technical skills, senior officers in particular are heavily sought after by defense contractors and other businesses. The military tends not to attract greedy people, but it’s only natural that some among those who choose to stay, and pass up more lucrative alternative paths, will be drawn to the kind of off-the-books luxury perks Fat Leonard offered, and will rationalize that taking these illicit benefits is justified by all of the sacrifices they have made during their careers. If we’re being honest, most of us, in similar circumstances, would likely be tempted to make the same sort of rationalization.

Furthermore, the military’s close-knit culture and hierarchical power dynamics likely helps explain why the scheme continued to grow over time. The individuals involved recruited fellow sailors who were not just their professional colleagues but also their close friends. They looked specifically for like-minded people they could count on to advance the enterprise or at least not report the misconduct. It also matters that high-ranking officials participated from the outset: when the most senior officers act in a certain manner, it signals to subordinates that such behavior will be tolerated. “Leadership by example” is a core principle in the military; usually that’s of great benefit to the organization, but sometimes, as in this case, it goes wrong and allows detrimental behavior to spread. The active participation, or even just the demonstrated indifference, of senior officers would also have created a significant disincentive for anyone of lower rank who found out about the scheme to report it up the chain of command. Close-knit easily becomes insular. Even in an organization that promotes and depends heavily upon the moral courage of its members, it can be hard to stand up against superiors, especially when it’s their integrity you’re questioning and their careers you’re threatening. As in most hierarchical organizations, remaining in the good graces of your superiors is crucial for career success in the military. Get on the wrong side of a senior officer in your chain of command, or even a particularly influential one outside your chain of command, and you could be looking at a tough road ahead. And many of the individuals charged so far in this scandal would have had the professional clout to turn that threat into a reality.

These personal and situational factors certainly do not capture the whole picture, but are a place to start in figuring out what went wrong. I am somewhat reassured by the fact that this case is being investigated so thoroughly and those involved are being punished severely. Hopefully, that will serve as a deterrent to anyone who might have considered perpetrating a similar scheme in the future. But punishment alone is not enough. The Navy—as well as the other branches of the U.S. military, since this could have happened in any of them—must be more proactive and vigilant going forward so as to deter and disrupt corruption before it can take root. Military personnel are human and have vices like anybody else; we’re not saints, we just make a commitment to put the interests of our country, military organization, and fellow service members above our own. But sometimes that fails, and the institution needs to be more attentive to where vulnerabilities for corruption exist, what personal and structural incentives currently exist for both potential co-conspirators and potential whistleblowers, and how those incentives might be altered to better safeguard against this type of corruption in the future.

One thought on “The US Navy’s “Fat Leonard” Scandal: How the Virtuous Fall

  1. Interesting thoughts! Your points about the military’s structural context having an influence on the persuasiveness of offers for corruption are insightful. Do you think they would extend to all military contexts, or is this something unique to the U.S. military? Does the Navy have any unique cultural elements that could make corruption more likely than in other arms of the service?

    However, I don’t think I fully agree with two of your points — first, that the military does not attract “greedy” people and, second, that the lack of commensurate salary has some influence on willingness to accept quid pro quo exchanges. On the former, military members not being greedy would seem to require some people to be inherently greedy as well as to require an individual’s level of greed being a static sort of figure, both of which maybe somewhat true but also over generalizations. In addition, there may be different kinds of “greed.” For example, it seems to me that U.S. military recruitment campaigns often focus on the honor or even prestige of service as well as shorter-term benefits like tuition payments and job security–maybe we wouldn’t call a desire to do something honorable “greed” per se, but it also seems to me not so distant from a human desire to feel special and to feel gratitude for one’s actions, which might be satisfied (in a much more sinister way) in the lavish treatments you describe. On the latter, I wonder why this would be unique to the military and why this would necessarily make corruption more likely. Plenty of individuals may feel they have gotten a raw deal in life or have chosen careers in public service, giving up potential private sector earnings. In addition, plenty of highly-paid individuals are tempted by bribes as well (as in some of the high-profile FCPA prosecutions). Not to say that someone’s feelings of having been undercompensated cannot play some sort of role, but it may simplify matters to say this is special to the military or a unique factor in willingness to engage in corrupt acts.

    Finally, I have one thought you didn’t mention that may be unique to Navy work in this context and influential in willingness to accept corruption. I actually suspect the location of the corruption offers may have had a persuasive effect, as it may in FCPA cases. That is, working in parts of the world that seem far from U.S. jurisdiction and perhaps where bribery is much more open may be influential in and of itself. If so, are there steps the military could make to address such a threat?

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