This week a U.S. Court opens a hearing into a U.S. Navy bribery scandal involving millions of dollars in excess charges for servicing American ships at Asian ports. The charges against two Singapore-based businessmen, a Navy commander and senior Navy investigator have raised eyebrows in the region as the case also suggests breaches of military security.
A Federal court in San Diego on Friday holds a pre-trial hearing for Navy commander Michael Misiewicz, Navy investigator John Beliveau, and defense contractors Leonard Francis and Alex Wisidigama. The men are facing charges of conspiracy to commit bribery. All have pleaded not guilty.
Prosecutors say Singapore-based contract company, Glenn Defense Marine Asia, GDMA, provided the Navy men with gifts including prostitutes, luxury travel, and concert tickets.
In return, Misiewicz is alleged to have steered Navy ships based mainly in Japan to visits at ports with lax oversight in Indonesia, Malaysia, and Thailand. Prosecutors say GDMA then overcharged the Navy by millions of dollars for food, fuel, waste removal, and other services through fraudulent invoices and fake tariffs.
Navy investigator Beliveau is alleged to have fed Francis, the head of the company, internal information on the three-year probe to warn him and help prepare a defense.
Carl Thayer, a former professor at the Australian Defense Force Academy, said the Navy scandal is of a magnitude he has never seen.
“There have been the odd occasions when reports have been released of people, 'loose lips sink ships', of making remarks in public or in private that contained classified information. But, not on this organized a scale itself and not involving, specifically, in this area of the world in my recent memory,” Thayer said.
Commander William Marks, a spokesman for the U.S. 7th Fleet, based in Japan, acknowledged the scandal's allegations can harm the perception of confidence in U.S. Navy command.
“So, these are certainly hard for us in the Navy, but we take a certain amount of pride in holding ourselves to the highest possible standards," Marks said. "The Navy is known for its accountability. Primarily, more than anything, we take very great concern into the ultimate accountability of the commanding officer.”
Navy commander Misiewicz is also alleged to have given Francis classified information on planned warship movements in the region, months in advance, though neither has been charged with endangering national security.
The charges filed in connection with the case prompted authorities in Australia, a major U.S. ally, to investigate whether the Australian Navy was affected. GDMA has been servicing navies in Asia for 25 years, including Australia's, in ports from Vladivostok to Sydney.
Thayer said while embarrassing to the U.S. Navy in Asia, the controversy will increase scrutiny of relations between militaries and contractors.
“So, I think it's kind of a one-off affair. It's not seen as, you know, symptomatic of the entire U.S. Navy," Thayer said. "These things happen from time to time... But, the concern is what is the immediate security impact? And, in this case, it involves the movement of U.S. warships.”
The four men were arrested in September and October after Navy Officers lured Francis, a Malaysian citizen, to San Diego on the false pretense of a business meeting.
The independent U.S. military newspaper, Stars and Stripes, reports the investigation on GDMA began in 2010 when suspicious billing was first spotted.
The company charged the Navy $110,000 in dockage fees for supporting annual exercises with the Thai Navy despite an agreement between the countries for no costs.
Captain Daniel Dusek of the USS Bonhomme Richard is also under investigation and was in October relieved of duty by Rear Admiral Hugh Wetherald. Navy spokesman Marks underscores that he was not charged with any wrongdoing but that the investigation was detrimental to his ability to lead those under his command.
“Part of the hallmarks of being a commanding officer is having the confidence and trust of people both below you and above you, your seniors," Marks said. "Based on Admiral Wetherald's judgment, there was a loss in that confidence and for that reason he relieved Captain Dusek Of his command.”
The four men charged could face up to five years in prison if convicted. But the corruption case could expand further. Court documents allege other Navy personnel accepted gifts from Francis but no names or details have been released.