The Navy cruisers Cowpens and Antietam, destroyers McCampbell and Lassen and littoral combat ship Freedom, are seen tied up at Singapore's Changi naval base in October. The Navy is changing the way it contracts and pays for port husbanding services needed during foreign port visits. (MC3 Karolina A. Oseguera/Navy)
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Navy Secretary Ray Mabus, stung by the results of the service’s investigation into fraud and abuse of ship servicing contracts, is making a number of changes designed to remove the temptation to accept bribes, avoid contractor fraud, and standardize ships’ needs during foreign port visits.
“The Navy is a leader in combating procurement fraud,” Mabus told reporters at the Pentagon on Friday. “And we are seeing the results as the allegations in the Glenn Defense Marine case demonstrate. But the job is not done.”
It’s the first time Mabus has spoken publicly about the case, which was revealed in September. Mabus noted he is still restricted in what he can say because of the ongoing prosecution by the U.S. Attorney’s Office in San Diego and the Department of Justice in Washington.
The investigation into allegations of fraud and other abuses committed by Glenn Defense Marine Asia, one of the largest ship husbanding agents in Asia, has been ongoing since 2010, Mabus said, sparked by concerns raised within the Navy.
“I was briefed for several months before the case became public,” Mabus said. “By necessity, the number of people who knew of the investigation was kept small. Throughout this period, I repeatedly instructed Naval Criminal Investigative Service agents to take the investigation wherever it led.
“I understand that they have pulled no punches, and will continue to pursue any and all leads. And it was NCIS that announced the first arrests in this case, which occurred on September 16, the day of the Washington Navy Yard shootings.”
The investigation so far is known to have snagged six senior officers and one NCIS agent, while other officers are known to be undergoing scrutiny. John Beliveau, the agent, pleaded guilty Dec. 17 in San Diego to sharing confidential information with GDMA. He faces a maximum of 20 years in federal prison.
The firm’s chief executive, Leonard Glenn Francis, is in federal custody in San Diego. A colorful figure nicknamed “Fat Leonard,” Francis is widely known in the fleet for his outlandish lifestyle and now, due to revelations from the investigation, for providing favors and prostitutes to U.S. Navy officers.
Mabus announced several moves being instituted to change the way ships contract for port services:
■ A husbanding service provider “red team” has been formed from experts across the fleet and the Naval Supply Systems Command “to scrutinize the end-to-end husbanding contractor process and recommend changes.” A revised acquisition strategy will be proposed to Sean Stackley, assistant secretary of the Navy for research, development, and acquisition, to be used globally on all husbanding contracts;
■ Husbanding service provider requirements and contract procedures will be further standardized, and oversight will be increased;
■ Ship’s officers will no longer be involved in paying for vendor functions, and “better requirements guidance and more contracting support” will be provided to commanding officers overseas;
■ Requisition processes will be standardized fleet-wide; and
■ The Auditor General of the Navy is conducting a special audit of husbanding and port services contracts, due in June, to identify ways to improve internal controls.
Mabus said he expects to “continue to see headlines resulting from the discovery and disposition of the cases.”
Referring to widespread media coverage, he commented that “I would rather have gotten this coverage because we are pursuing alleged wrongdoers rather than have no coverage but also not uncover misconduct.
“I would rather get bad headlines than let bad people get away,” he said.
The Secretary repeatedly noted the Navy raised suspicions in the case, began the investigation, and uncovered the misdeeds.
Since 2009, the year he took office, Mabus noted the Navy has suspended 252 contractors and debarred 400. More than 120 of the debarments were for more than three years, he said. In 2013, the Navy’s Acquisition Integrity Office has terminated 11 contractors for various infractions.
But, he said, more needs to be done.
The GDMA case, he said, “not only goes against all the ethics rules we have, these few people that are alleged to have done these things. This goes against everything you should have learned at home. Everybody knows it’s wrong to take a bribe, to get paid to give a contract.”
The vast majority of the Navy’s people, he said, “are doing it honorably and ethically. But we’re not going to stop. I told NCIS the one consistent thing is to take this investigation wherever it leads.”