Navy Bribery Scandal in ‘Very Early Stages:' 2nd Highest-Ranking Official

Chief of Naval Operations: Some of those implicated in the bribery scandal did not know they were breaking the law

The second highest-ranking official in the U.S. Navy made his first public comment on the bribery scandal that’s infiltrated the U.S. Navy, resulted in guilty pleas and ended careers.

Chief of Naval Operations Admiral Jon Greenert described the U.S. Attorney’s Office prosecution of naval officers as “still in the early stages” in some cases.

Members of the U.S. Navy have pleaded guilty to trading confidential ship movement schedules to a Singapore-based company in exchange for travel, prostitutes, elaborate dinners or electronic gadgets.

“We're just still in some cases the very early stages of this. We only know what we know about the GDMA,” Greenert said in San Diego Monday referring to the company run by “Fat” Leonard Francis.

Court documents show that Francis and his company GDMA gave the co-conspirators – officials ranging from an NCIS investigator to a battleship commander – millions of dollars in gifts over 10 years beginning in 2004.

In exchange, Francis obtained classified information that allowed his firm to overbill the Navy at least $20 million for port services such as food, fuel and garbage disposal when they visited his ports in Asia.

NBC 7 has been following this story since it was first revealed in September 2013.

The CNO compared the Navy's scandal to similar corruption involving businesses in the private sector.

“These are not situations we have not seen before,” Greenert said.

Of those naval officers who have pleaded guilty to bribery and conspiracy charges, Greenert said some of them did not know they were breaking the law.

“Some folks made, in some cases, mistakes. Just flat out mistakes,” he said. “Some were not deliberate at all.”

Pentagon leadership is reminding new admirals and new generals that their ethical foundation is the most important thing to them and their career.

“How do they ensure their integrity is always there and they don’t tell, as we like to say, ‘the little white lie,’” he said. “In the business we’re in, we can’t afford to do that. We have to have unconditional trust.”

The U.S. Navy went through an adjustment period two years ago. Several senior naval officials including ship commanders were reassigned with the Pentagon citing “lack of confidence” as the reasons.

“The behavior of our folks, especially people in leadership, has improved a lot. I would like to say it’s the emphases on the foundation,” Greenert said although he admitted he would like to see data supporting his theory.

Federal prosecutors have estimated they have at least 200 targets in the ongoing investigation. 

Three naval officers received career-ending censures because of their “lack of judgment and failure of leadership” from U.S. Secretary of the Navy Ray Mabus.

Commander of Carrier Strike Group 7 on USS Ronald Reagan Rear Admiral Michael Miller received a letter of censure along with Rear Admiral Terry Kraft, who was commanding officer on the same ship, and Rear Admiral David Pimpo, who once served as supply officer of the aircraft carrier.

Among the perks the former rear admirals received from GDMA were discounts on model ships.

Guilty pleas have been entered by Navy Capt. Daniel Dusek, Navy Cmdr. Jose Luis Sanchez, Retired Navy Lt. Cmdr. Edmond A. Aruffo, Navy Petty Officer First Class Dan Layug, senior Navy criminal investigator John Beliveau II and GDMA company manager Alex Wisidagama.

Greenert is a member of the Joint Chiefs of Staff and serves as the principal naval adviser to the President and to the Secretary of the Navy.
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