The International
AS A SMALL COUNTRY with relatively few natural and human resources, Singapore naturally looks outward to attract talent and generate growth, as opposed to larger, better-endowed countries that can generate significant growth from natural and human resources found within. Our diminutive size also compels increased engagement with the international community as a measure towards increased security and stability. As such, Singapore is an important node in the globalised movement of people, goods and capital.
Perhaps inevitably, Singapore has also been getting much attention as a transit point or even a nexus for international crime, ranging from people smuggling and money laundering to drug trafficking. Lately, Singapore has also been embroiled in a widening scandal involving a local company and its dealings with the US Navy, over which no less than two admirals have been put on forced leave, with more officers being hauled in the dragnet. This is the most serious scandal to have hit the US Navy in recent years, and not only has it sullied the pride of the US Navy in a prostitutes-for-contracts racket, it has also compromised the security of US naval forces in the region at a time of heightened tension in the South China Sea.
The individual at the heart of the scandal is Malaysian businessman Leonard Glenn Francis, 49, owner and CEO of Singapore-based company Glenn Defense Marine Asia (GDMA). A father of five, Francis lived in a 28,000 sq ft bungalow on Nassim Road, which was regularly featured in the local papers for its grand Christmas decorations.
Francis was aided by his cousin Alex Wisidagama, 40, a Singaporean and the general manager for global government contracts at GDMA, which had been providing husbanding services for US navy vessels in the region for some 25 years.
Operating from locations that included Singapore, Japan, Thailand, Malaysia, Korea, India, Hong Kong, Indonesia, Australia, Philippines and Sri Lanka, GDMA provided a comprehensive range of logistical and support services for US navy ships and submarines as they came to port. These included supplying them with water, fuel, food, garbage and waste removal, tugboats, providing logistical and administrative support, as well as transport and even security. Besides the US Navy, which exceeded $100 million a year of its business, GDMA also serviced the region’s other navies.
A businessman needs networks to be successful, and Francis — widely known in the navy circles as “Fat Leonard” for his imposing stature and larger-than-life personality — fit the role perfectly. His network within the US Navy included a petty officer (equivalent to sergeant in the army) who was on his company payroll, an NCIS agent who leaked confidential investigation reports to him when the Navy started getting suspicious about GDMA dealings, senior staff officers and ship commanders who used their authority to steer ships to ports of Francis’ choosing, all the way up to two admirals who were the top men in the region for naval intelligence.
Francis and his company would identify US Navy personnel serving in the region who were deemed corruptible, then ply them with prostitutes, cash, luxury holidays and hotel rooms, plane tickets and even tickets to The Lion King and Lady Gaga performances. In return, GDMA bought access to information about ship deployments, competitor pricings, contract reviews and investigation reports. It was even able to get aircraft carriers and ships steered to ports of its choosing, where it could more easily overcharge the US Navy for pier-side services.
Defence contractor scandals are nothing new for the US military, but as Admiral (retired) Gary Roughead, a former chief of naval operations, commented, “Allegations of bribery and kickbacks involving naval officers, contracting personnel and NCIS agents are unheard of.” Roughead had met Francis nearly a decade ago when serving as a commander of the US Pacific Fleet, and found the case “extremely serious, disconcerting and surprising”.
Profit was the driving motive in this case, but the information that Francis was able to procure would have been very damaging if it fell into the hands of America’s many enemies. In addition, to have ships of the US Navy’s Seventh Fleet, tasked with keeping order in Asia and defending the Korean peninsula, moved about according to the will of the same company tasked with keeping its toilets clean, is audacious to say the least.
Holding a senior rank equivalent to a lieutenant colonel in the army, Commander Jose Luis Sanchez had access to highly classified information as well as authority and influence within the navy which he used to further GDMA’s business.
According to court records, Sanchez started moonlighting for Francis in January 2009, when he was the Deputy Logistics Officer for the Commander of the US Navy Seventh Fleet based in Yokosuka, Japan. This continued when he was transferred to serve as Director of Operations for Fleet Logistics Command in Singapore, and until he transferred to Florida in April 2013, where he was later arrested.
During this time, Sanchez provided Francis with US Navy ship schedules and inside information about husbanding issues that helped GDMA win and maintain navy contracts. He regularly emailed Francis internal navy discussions about GDMA, including legal opinions, and also made recommendations in GDMA’s favour about port visits and navy personnel assignments.
In return, it is alleged that Francis showered Sanchez with over $100,000 in cash, travel expenses and prostitutes for Sanchez and his friends on numerous occasions. Sanchez and Francis allegedly communicated regularly via email and Facebook. Sanchez referred to Francis as ‘Lion King’ and ‘Boss’ in the emails, while Francis called Sanchez ‘brudda’.
In an email exchange on October 16, 2009, Sanchez and Francis discussed a trip the former had planned to take to Kuala Lumpur and Singapore with navy friends he called his ‘Wolf Pack’. They discussed the number of rooms the ‘Wolf Pack’ needed, and Sanchez even asked Francis for pictures of prostitutes for ‘motivation’. Francis gamely replied, “J, got it we will hook up after the FLAG dinner, will arrange a nest for you guys and some birds [women].” According to prosecutors, a few days later, on 19 October, 2009, Sanchez sent a Facebook message to Francis saying, “Yummy… daddy like.”
Hookers and holidays were not for nothing. According to court records, Francis emailed Sanchez on 20 October, 2011, asking the latter to help ‘swing’ business his way regarding a navy ship’s need to refuel at a port in Thailand. US Navy ships can use what are called ‘sea cards’ to purchase fuel at a price pre-negotiated by the Defense Logistics Agency for Energy. This is usually cheaper than buying fuel directly from a husbanding contractor such as GDMA. Sanchez replied via email the following day, telling Francis: “Ask and you shall receive… we worked this out this morning…”
Court records show that USS Mustin conducted a port visit to Laem Chabang, Thailand, during which it purchased fuel from GDMA instead of using ‘sea cards’. As a result, it was billed more than $1 million for fuel — more than twice what it would have cost if a ‘sea card’ had been used.
On 2 December, 2011, Sanchez also alerted Francis about a navy investigation into GDMA dealings, to which Francis replied, “I have inside intel from NCIS and read all the reports. I will show you a copy of a Classified Command File on me from NCIS ha ha.”
That ‘inside intel’ was classified information provided by Supervisory Special Agent John Bertrand Beliveau II of the Naval Criminal Investigative Service (NCIS), who had met Francis when he was stationed in Asia and had been in regular email contact since 2008.
As the primary law enforcement agency of the US Navy that investigates crimes against or by members of the US Navy and US Marine Corps, the NCIS had initiated multiple investigations into GDMA from 2010 but had never been able to uncover criminal activity. That was because Beliveau, a one-time NCIS agent of the year, was leaking regular tip-offs about the state of investigations to Francis and advising him on ways to frustrate NCIS probes.
For his services, Francis supplied Beliveau with prostitutes and free travel, including a three-week trip to five Asian countries. An email he wrote to Francis in April 2012 showed Beliveau pressing Francis for more rewards, with an implied threat despite the smiley: “You give whores more money than me ;) Don’t get too busy that you forget your friends… Let me know… I can be your best friend or worst enemy.” To which Francis replied, “You are a sore Bitch and I have not forgotten you Bro. How do I send you a gift?”
Although Beliveau was not part of the NCIS team investigating GDMA, he is alleged to have downloaded scores of reports from the case file by accessing the agency’s internal databases. He took these files home and exchanged more than 1,000 text messages with Francis over a span of 15 months till his arrest in September 2013, by which time he was the supervisory agent in charge of the NCIS office in Quantico, USA. Considering that the NCIS also has responsibilities in national security, counter-intelligence and counter-terrorism, Beliveau’s complicity was no small breach in the security of the USA.
On several levels, Commander Michael Vannak Misiewicz was such a powerful poster boy for America, and a public relations triumph for US forces stationed in Asia. Born Vannak Khem in Cambodia, he was adopted by a US embassy worker when he was 6, and left the country for Illinois USA in 1973, the year US forces pulled out of Indochina at the closing of the Vietnam War. Just two years later, Cambodia fell to the Khmer Rouge, and in the ensuing reign of terror, some two million people out of a population of eight million perished in the “Killing Fields”.
Growing up in America, Misiewicz led a very different life from his father and sister who stayed behind in Cambodia — while they perished in the killing fields, Misiewicz received a good education and graduated from the elite Naval Academy at Annapolis as an officer of the US Navy. When Misiewicz returned to Cambodia for the first time in 37 years in December 2010, as the commander of the USS Mustin guided missile destroyer, the clean-cut Misiewicz was a personification of the American Dream made real. Long-lost relatives boarded the ship for a tearful reunion that was widely covered in the media. Not only was it a personal triumph for Misiewicz, an Asian minority rising fast in the ranks of the world’s most powerful navy, it was also a triumph of sorts for the ideals that made such a success possible. The communists may have won the war in Indochina in the 1970s, but it was the liberal capitalist system espoused by the USA that made a better life for its people.
Nevertheless, behind the photocall lay a darker truth. Months before Misiewicz’s visit, from as early as May that year, Francis and an unnamed GDMA manager had begun to target Misiewicz “as someone who might be susceptible to providing favour… in return for things of value”. It was a relationship that proved very lucrative when Misiewicz’s tenure at the battleship ended in late January 2011 and he took up the post of deputy operations manager for the Navy’s Seventh Fleet, overseeing all naval activities in the western Pacific and Indian oceans.
From here, Misiewicz was in a position to provide GDMA with classified information about ship movements and even steered vessels, including aircraft carriers, to specific Asian ports of GDMA’s choosing.
Misiewicz was well rewarded for his pains. In March 2011, Francis hired four prostitutes to entertain Misiewicz and another unnamed navy commander during a three-day visit to Singapore. GDMA executives soon became familiar with Misiewicz and emailed one another about how the latter “liked Japanese women”. In emails, Misiewicz addressed GDMA boss Francis as “Big Bro”, while the latter referred to Misiewicz, who was a foot shorter and nearly 90kg lighter, as “Little Bro”.
Part of GDMA’s incentives also included tickets and female escorts for Misiewicz and four co-workers to attend the Lady Gaga concert in Thailand and paid-for shore leave in Singapore and other cities. In June 2011, after a visit to Cambodia, Misiewicz emailed Francis and another GDMA executive to express his thanks: “Take care gents, thank you for the best leave (w/o kids that is) ever!” Misiewicz is married, and a father of four.
Francis did not just cultivate relationships with senior officers, he also had an NCO on the take: Petty Officer 1st-class Daniel Layug (rank equivalent to sergeant in the army). As a logistics specialist stationed in Yokosuka, Japan, Layug had access to classified US Navy ship schedules, as well as pricing information from one of GDMA’s competitors. These he duly leaked to GDMA’s vice president of global operations, in return for a monthly wage from GDMA.
According to court records, on 21 May, 2012, GDMA’s vice president of global operations instructed a GDMA accountant that “at the end of each month, we will be providing an allowance to Mr Dan Layug. Total of US $1,000. You may pay him the equivalent in Yen. He will come by the office at the end of each month to see you.” Layug received more than $10,000 in cash this way as supplementary income, courtesy of GDMA. Layug was also given luxury hotel stays for himself and others in Malaysia, Singapore, Indonesia, Hong Kong and Thailand, as well as electronics gadgets that caught his fancy.
On March 9, 2012, Layug asked the vice president of global operations, “What are the chances of getting the new iPad 3? Please let me know.” GDMA promptly sent him one. A year later on 28 May, 2013, Layug emailed his request for a ‘bucket list’ of gadgets that included a high-end camera, an iPhone5, a Samsung S4 mobile phone and an iPad Mini. Again, GDMA was swift to comply, because Layug emailed GDMA’s vice president of global operations shortly: “The camera is awesome bro! Thanks a lot! Been a while since I had a new gadget!”
The details of how GDMA defrauded the US Navy of millions of dollars were revealed by Singaporean Alex Wisidagama, who was Francis’ cousin and the general manager for global government contracts at GDMA.
Various methods were used to trick the Navy into overpaying for items such as fuel and port fees. Wisidagama and other executives submitted fraudulent, inflated invoices to the Navy and also submitted fake competitive bids from non-existent companies so GDMA won contract tenders every time. They even created fictitious port authorities with significantly inflated port tariff rates.
Wisidagama detailed a particular instance where the USS Mustin made a port call at Laem Chabang, Thailand, in the fall of 2011. Here, GDMA billed the Navy $2.3 million for fuel that really cost $900,000 and $133,232 for ‘port dues’ that really cost $6,849. It had overcharged the Navy by $1.5 million.
It was only a matter of time before fraud of such scale was uncovered. Not only were the sums involved massive and hence hard to miss in an audit, GDMA executives also often boasted about their privileged (unlawful) access to high-ranking navy personnel.
In one fell swoop, Beliveau at the NCIS and Commander Michael Vannak Misiewicz were arrested on 16 September, 2013 in Washington and Colorado Springs respectively, while Francis and two GDMA executives (including his cousin Wisidagama) were arrested that same day in their hotel rooms at the Marriott Marquis in San Diego, California. Francis and Wisidagama had earlier been lured to the US by Navy officials who set up a bogus meeting with GDMA to discuss business.
Commander Jose Luis Sanchez was arrested more than a month later in Tampa, Florida on 6 November, 2013 and Petty Officer First Class Daniel Layug was arrested a few months later on 16 April, 2014. All four men were charged for defrauding the navy and for leaking classified information.
Said Acting Assistant Attorney General Mythili Raman, “Senior officials with the United States Navy abused their trusted positions as leaders in our armed forces by peddling favourable treatment — and even classified government information — for their personal benefit. In turn, the GDMA executives who illicitly sought information and favours from those Navy officials boasted about their unlawful access to those officials and then traded on the influence that they illegally bought. Day by day, this massive Navy fraud and bribery investigation continues to widen, and as the charges announced today show, we will follow the evidence wherever it takes us.”
As the Navy cleans house following evidence from the arrested men, more officers are expected to be implicated. Captain Daniel Dusek (rank equivalent to a colonel in the army) was relieved of command in October 2013, although he has not been formally charged at the time of writing.
Also implicated were two admirals, Vice Admiral Ted Branch and Rear Admiral Bruce Loveless (three-star and two-star general equivalent, respectively), who are currently under investigation for “illegal and improper relations” with GDMA boss Leonard Francis. Branch is Deputy Chief of Naval Operations for Information Dominance and Director of Naval Intelligence, while Loveless is Director of Intelligence Operations. Both men were put on forced leave in November 2013 and ironically, as the top men in navy intelligence, they have been barred from access to classified information.
Neither admirals have yet been charged. According to a statement issued by Rear Admiral John F. Kirby, allegations against Branch and Loveless “involve inappropriate conduct prior to their current assignments and flag officer rank. There is no indication… that in either case there was any breach of classified information.”
In the meantime, the US Navy has also terminated three major contracts with GDMA since the case broke in September 2013, worth nearly $200 million.