CBS and the Washington Post have this scoop exposing a bribery ring that sent US Navy ships to certain ports, overbilling taxpayers for maintenance while a few officers got cash, prostitutes, and tickets to shows in exchange for their alleged cooperation. Investigators have arrested two high-ranking officers — including an investigator — as well as civilians at Glenn Defense Marine Asia for the bribery scheme:
The U.S. Navy is being rocked by a bribery scandal that federal investigators say has reached high into the officer corps and exposed a massive overbilling scheme run by an Asian defense contractor that provided prostitutes and other kickbacks.
Among those arrested on corruption charges are a senior agent for the Naval Criminal Investigative Service and a Navy commander who escaped Cambodia’s “killing fields” as a child only to make a triumphant return to the country decades later as the skipper of a U.S. destroyer. The investigation has also ensnared a Navy captain who was relieved of his ship’s command this month in Japan.
The chief executive of the Singapore-based defense contractor, Glenn Defense Marine Asia, and another company official were arrested last month at a San Diego harborside hotel after federal investigators lured them to the United States by arranging a sham meeting with Navy officials, according to court records and people involved in the case.
The unfolding investigation is shaping up as the biggest fraud case in years for the Navy. Federal prosecutors allege that Glenn Defense Marine, which has serviced and supplied Navy ships and submarines at ports around the Pacific for a quarter-century, routinely overbilled for everything from tugboats to fuel to sewage disposal.
Investigators are still assessing the scope of the alleged fraud, but federal court records filed in San Diego cite a handful of episodes that alone exceeded $10 million. Since 2011, Glenn Defense Marine has been awarded Navy contracts worth more than $200 million. The company also services ships from several navies in Asia.
CBS covered the story this morning:
This wasn’t just about overbilling, though. The indictment alleges that Misiewicz divulged classified data on ship movements, which would have put our entire fleet at risk had a conflict broken out:
In exchange for prostitutes, travel and other favors, federal authorities allege, Misiewicz provided Francis with classified information about ship movements and steered vessels to specific Asian ports.
The probe isn’t over yet, either:
Court papers make references to other, unnamed Navy officers who accepted favors from Francis, an indication that the investigation remains in its early stages.
Navy officials have identified Capt. Daniel Dusek, former commander of the USS Bonhomme Richard, as another target of the investigation. He has not been charged, but the Navy relieved him of command Oct. 2, citing the investigation.
The Navy cancelled $200 million in contracts last month with Glenn Defense Marine. This looks like it has the potential to be bigger than just the contracts.