Navy cancels $200 million in contracts with firm in bribery scandal
By TONY PERRY | Los Angeles TImes | Published: November 15, 2013
SAN DIEGO — The Navy has canceled more than $200 million in contracts with a Singapore-based company at the center of a spiraling scandal involving accusations of bribery and leaking of confidential information.
The Navy terminated “for cause” three contracts worth $196 million with Glenn Defense Marine Asia and six more worth $7.5 million “for convenience,” Navy officials confirmed Thursday. News of the cancellation initially appeared in USA Today.
The contracts were for providing services to U.S. ships in ports in the Asia-Pacific region.
Five people have already been charged in San Diego federal court in the case: two Navy commanders, a Naval Criminal Investigative Service agent, the owner of Glenn Defense Marine Asia and one of his employees.
On Friday, two Navy admirals were put on leave and their access to classified material suspended during an investigation into unspecified allegations involving the case.
“We do believe there will be more Navy officers and even Navy civilians (linked to the case) as this scandal unfolds,” said Navy spokesman Rear Adm. John Kirby.
Vice Adm. Ted Branch, director of Naval Intelligence, and Rear Adm. Bruce Loveless, director of intelligence operations, have been put on leave and their access to classified material suspended.
“The allegations against admirals Branch and Loveless involve inappropriate conduct prior to their current assignments and flag officer rank,” Kirby said. “There is no indication, nor do the allegations suggest, that in either case there was any breach of classified information.”
Cmdr. Michael Vannak Khem Misiewicz and Glenn Defense Marine Asia owner Leonard Francis appeared in federal court in San Diego last week. A third defendant, NCIS Special Agent John Beliveau II, was represented by his attorney.
Two other defendants — Cmdr. Jose Luis Sanchez and Alex Wisidagama, an employee of Francis’ — will appear at separate hearings.
Misiewicz and Sanchez are accused of leaking confidential information about the movement of Navy ships to Francis. His firm has supplied “husbanding” services to Navy ships throughout the Asia-Pacific region for more than two decades.
In return, the two officers allegedly received money, first-class travel, hotel accommodations and prostitutes. The Navy officers helped “steer” Navy ships to ports where Francis’s firm is influential, according to the indictments.
Beliveau is accused of warning Francis that an investigation was underway to determine whether the bills submitted by his firm were padded or fraudulent for services such as food, water, fuel, tugboats, fenders, security, transportation, trash, waste removal and other things.
Prosecutors say the bribery scheme cost the Navy and taxpayers more than $10 million.
During a five-day visit by the carrier Abraham Lincoln to the port at Laem Chabang, Thailand, the Navy was billed $884,000 for husbanding services. Of that amount, more than $500,000 was overbilling, according to federal prosecutors.
Rep. Jackie Speier, D-Calif., a member of the House Armed Services Committee, said that the case “suggests that to the core the institution needs to be scrubbed clean with peroxide or something,” USA Today reported.