Fat Leonard Cost the U.S. Navy More Than Money

Malaysian national Leonard Francis, better known as “Fat Leonard,” is back in the news nine years after his original arrest for defrauding the U.S. Navy of around $35 million between 2006 and 2013. Caught in Venezuela last month boarding a flight to Russia two weeks after absconding from his loosely supervised house arrest in San Diego, Francis remains an albatross around the U.S. Navy’s neck. While his actions hurt the Navy, the service’s own response has done perhaps more long-term harm to the organization than Francis himself.

Over the course of several decades, Francis enticed U.S. Navy personnel, including high-ranking admirals, into illicit relationships where he provided them sex workers, hotel stays, and concert tickets in exchange for classified information and inflated contracts to provide logistics support to the U.S. Navy in Asia. The enormous investigation that ensued after his arrest has produced at least 33 federal indictments and 22 guilty pleas. While several admirals were charged, only one was ever convicted, with then-Secretary of the Navy Ray Mabus handing three others letters of censure. A bifurcated justice process saw the Department of the Navy adjudicate some cases, while the Justice Department oversaw others, with considerable divergence in the types and severity of punishments handed down.

It is difficult to account for the exact costs suffered by the Navy in Francis’s wake. Of course, there’s the issue of the $35 million he swindled. And, to the Navy’s credit, bureaucratic fail-safes were put in place to increase transparency around logistics operations and introduce more rigor into the supply process. But scores of innocent sailors saw their careers slowed or put on hold simply for association with those who were engaged in wrongdoing, with some still waiting for overdue promotions to be approved.

These kinds of delays can put a sailor off the career timing required to stay on the “golden path”—the Navy’s colloquial term for the succession of assignments that are required to achieve higher rank. Those admirals who found themselves under the magnifying glass could not retire, nor could they really do their jobs as their security clearances were suspended, but their successors could not take over either.

This logjam reverberated across the entire Navy, and many individuals who could or should have risen to positions of prominence were unable to do so because their careers were held hostage to the wheels of bureaucracy and a slow-moving investigative process. At the end of the day, the Navy’s process seems to have hurt good sailors along with the bad and made scandal look eminently survivable. The most senior officers involved in the scandal were simply put out to pasture after three decades in service, untouched by federal indictment, without reduction in rank, and with healthy taxpayer-funded retirements intact—a strongly worded letter their harshest punishment.

As the U.S. Navy gears up for what it sees as the period of “peak risk” for conflict with China’s navy, Francis’s impact on the service is particularly painful. His ingratiation with naval leadership at the highest levels of the 7th Fleet meant that almost any officer with meaningful service in the Pacific in the 2000s and early 2010s fell under the long shadow of this scandal, whether rightly or wrongly. One senior staff member of the highest U.S. command in the region went so far as to say that “China could never have dreamt up a way to do this much damage to the U.S. Navy’s Pacific leadership.” Losing personnel who understand Asia, having sailed its waters and worked with the region’s navies, at this critical juncture is incredibly damaging in the run-up to potential conflict.

There are also rumors, started by Francis himself, that he maintained compromising evidence of officers indulging in various activities the U.S. Navy considers unseemly at his bacchanals. Further still, he claimed that he maintained his most damaging evidence on a server in China, a potential national security nightmare. That this kompromat has yet to surface despite his many years in house arrest may be a blow to the veracity of Francis’s claims, but it is hard to know how far such a threat could reach if true.

It is difficult and unpleasant to face the fact that institutional corruption had set in in the Navy’s most consequential area of operations. Some have sought to move past the Fat Leonard scandal by attributing the actions of these officers to “a few bad apples.” But that short-sighted excuse conveniently leaves off the last half of the axiom—“ruin the bunch.” The Navy has yet to publicly detail the administrative or punitive actions it has taken in connection with this scandal, a fact that many have interpreted as protecting its own.

Sunlight is said to be the best disinfectant, and retreating rather than confronting the issue head-on has only lent strength to the worst assumptions. The Navy’s system of military justice is tarnished when senior officers fail their oaths in spectacular fashion over months and years, only to escape even a fraction of the discipline that would have been meted out to a junior sailor who admitted to smoking marijuana once. What message does an organization send when men who hold, and use, the power to end the careers of those far junior to themselves are allowed to quietly retire rather than face justice?

The spiritual damage is likely the worst of all, as an entire department has been tarred with the brush of dishonor, stuck in a morass of scandal and opacity that seems to only compound with each new raft of bad news. The Navy is increasingly fighting from the back foot to address its shrinking fleet, ruinously expensive failed shipbuilding programs, and the rapidly expanding threat posed by China in the Pacific. But at the same time, it is struggling with basic professional ethics, as evidenced by the botched war crimes trial of Eddie Gallagher; Navy leaders bowing to political pressure to reinstate Eric Greitens to the Navy Reserve despite allegations of domestic abuse and sexual assault; hazing and drug use in its special operations community; and the Navy’s critical mishandling of issues such as the Red Hill fuel spill, which did great harm to families while those responsible were allowed to quietly retire, awarded for excellent performance.

Thousands of naval careers have started and finished in the intervening years since Fat Leonard’s arrest, and during that time the Navy’s workforce has primarily heard about the issue from outside sources rather than from their own leaders, making it feel as if the service is just waiting for everyone to forget about it. Francis’s bold escape has renewed the profile of the case, giving the U.S. Navy’s leadership a new opportunity to talk to its people about what happened and what has been done to ensure it never happens again.

But the Navy isn’t talking about it. Inexplicably, even the U.S. Naval War College’s College of Leadership and Ethics has yet to incorporate the Fat Leonard scandal into its ethics curriculum. Professional ethics and reporting mechanisms are still not taught before leaders reach the highest levels of command. These principles should be incorporated into the earliest years of naval careers to ensure that small mistakes do not derail promising futures. And if there are still sailors stuck in investigative purgatory, they too deserve transparency regarding the official status of their careers and professional reputations.

The Fat Leonard scandal hurt the U.S. Navy operationally: The financial losses and career damage to personnel innocent of wrongdoing were considerable, and the compromise of officers throughout the chain of command still threatens the organization’s security as well as its reputation. But without transparency and honesty, the scandal’s legacy will continue to be corrosive.