The U.S. Navy’s Big Fat Scandal
BOOK REVIEW: FAT LEONARD: HOW ONE MAN BRIBED, BILKED, AND SEDUCED THE U.S. NAVY (On Sale May 14)
By Craig Whitlock/ Simon & Schuster
Reviewed by: Steve Epstein
The Reviewer — Steve Epstein is a former US Navy surface line officer and JAG. After retiring from the Navy, he served as a civil servant as the Director of the DoD Standards of Conduct Office.
REVIEW — Yes, this book is a great read. Fat Leonard: How One Man Bribed, Bilked, And Seduced the U.S. Navy reads like the screen play for a future Mission Impossible episode. Chock full of exotic ports, wayward government officials, secret recordings, sex, attractive women, luxury cars, escapes from jail, more sex, over-the-top parties in Michelin-starred restaurants, a world-class con-artist, and bundles of cash. It is all here.
But there is a difference. First, the protagonist is not a photogenic, daring government agent, but a “morbidly obese, fifty-seven-year-old felon with two bad knees and kidney cancer,” who is as cunning as a fox and has the morals of a snake. And he loved to make outrageous, illegal profits by bilking the US Navy.
The other difference is that this is true. It actually happened. This should terrify all Americans, because from 1992 to 2013, Leonard Francis, known as “Fat Leonard,” conned, and in some cases bribed, senior US Naval officers, (and others) allowing him to overcharge the US Government millions of taxpayer dollars. He did this despite the voluminous government contracting regulations, layers of review, and the opposition of many honest, by-the-book government officials.
But not all of them were honest. Some accepted bribes for passing Leonard information that was proprietary and confidential. A Naval Criminal Investigation Service (NCIS) agent served as a mole within NCIS to warn Leonard of inquiries and neuter 27 investigations. Several (far too many) Naval officers forwarded Leonard classified information regarding planned ship movements.
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The author, Craig Whitlock, an investigative reporter for The Washington Post, started following this story in 2013, writing for the Post and accumulating data from court records, interviews, NCIS investigations, emails, invoices, and extensive interviews (conducted by others) of Leonard himself. He is meticulous in his reporting, adding volumes of endnotes and even a “Note on Sources” in which he admits that much of his reporting is based on statements from Francis, but “I never took his word for it. I used information attributed to him only if it checked out with other sources or documents.”
Unfortunately, as disclosed in the endnotes, many of Mr. Whitlock’s sources appear to rely on secondhand information, such as media accounts or summaries.
The book is about how Francis obtained husbanding contracts to “provide harbor protection, tugs, barges, cranes, food, fresh water, and sewage collection” for Navy ships at ports in the Pacific. He was ambitious and hardworking, but also believed that by building relationships with officials so that they trusted him, felt obligated to him, and considered him their friend, they would not closely scrutinize his billing.
His strategy was to treat the senior officers from visiting navy ships, especially supply officers who oversee contracts and payments, to lavish dinners in the finest restaurants complete with expensive wines, champagnes (Dom Perignon) and cigars. Many dinners ended with the arrival of prostitutes whom he had procured.
Over time Francis nurtured a cadre of Naval officers who reciprocated by disclosing classified ship schedules and competitor bidding information, favoring his bids, stalling investigations, scheduling port visits in ports where Francis operated, and frustrating the efforts of Navy lawyers to bring such hospitality into legal limits.
As Francis’s dinner parties became notorious, Navy procurement officials, as well as NCIS and Defense Criminal Investigative Service (DCIS) started gathering data. Working with the US Attorney in San Diego, they lured Francis to San Diego in September 2013 where he was arrested and jailed on multiple charges.
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But Francis’s success as a con man was not limited to the Navy. While in custody, he and his lawyers struck a deal with the US Attorney to turn over his records and testify against everyone who partied, conspired, or cooperated with him. The investigators realized that to ensure Leonard’s continued cooperation, they needed to “keep him happy” and accede to his demands for greater comfort. This was compounded when Leonard was diagnosed with renal cancer and placed on a medical furlough for surgery. He was then assigned to a “satellite clinic” which was a $1 million, 2,700 square-foot condo, which he filled with his mother, sons, nannies, cooks, and servants. A single guard, paid by Leonard, lived over the garage.
With sentencing scheduled for September 22, 2022, Francis feared imprisonment. He sent his mother and sons back to Malaysia, discharged his staff, shipped his furniture, and on September 4 cut off his ankle bracelet, called an Uber and fled to Mexico, from where he flew to Cuba and then Venezuela. Apprehended in Venezuela pursuant to an Interpol alert, he was extradited to the US in December 2023 as part of a prisoner swap. He is currently (to the best of our knowledge) back in San Diego awaiting trial on additional charges relating to his escape. Considering Francis’s track record for arising Phoenix-like from the ashes, I’m not sure this is the end of his saga.
Although the book reads like an action story about Francis, its real value is as a wakeup call exposing chinks in the Navy’s procurement system. It must be frustrating to the Navy’s leadership, procurement, and ethics communities, which have created an extensive, multi-tiered regulatory edifice to prevent corruption, to discover that innovative crooks can, at least for a time, prevail.
So, who would benefit professionally from this book? At a minimum, it should be required reading at the US Naval Academy and the Defense Acquisition University where these lessons have direct applicability. Also, corporate and government ethics and compliance professionals, who struggle to understand how and why normally honorable people can be corrupted.
Fat Leonard: How One Man Bribed, Bilked, and Seduced the U.S. Navy earns a solid 3 out of 4 trench coats
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