As a general rule, members of the military may not accept personal gifts in excess of $20, or $50 from one source in the course of a year. A "prohibited source," according to these rules, conducts business with or seeks action from the Navy.
"While the investigation determined the action was not in keeping with Navy regulations, it noted that Rear Adm. Faller's acceptance of the upgrade 'was not self-serving,' because he intended to make the hotel accommodations available to his staff," Cutler said. "It was determined that no adverse administrative or disciplinary action was warranted in this case."
"Even if he wasn't trying to circumvent the ethics rules for personal gains, it appears to speak to a broader culture of laxness inside the Navy when it comes to ethics," said Michael Smallberg, an investigator at the Project for Government Oversight in Washington, D.C.
"Even if this isn't a major bribe, or the kind of serious corruption the Navy has dealt with in some other cases, this is still an example of generating the kind of good will that a lobbyist or contractor is looking for — which is why the ethics rules exist in the first place."
Faller declined a request for comment by email, saying he didn't have anything to add to the investigation and the general's letter that closed it.
According to the IG, Faller was approached by someone associated with the hotel who inquired about his room and offered a larger suite. Faller initially turned the person down, saying it was just him. But after the person insisted that the room would sit unused otherwise, Faller accepted.
"I did end up, once I saw it, thinking to myself that, 'Hey, I've got a bunch of staff in an admin room. I'll tell them. I'm sure that somebody could afford to avail themselves of the opportunity here,'" Faller told investigators. "And that's why I agreed to it."
"I have determined that he did not solicit the room upgrade and he did not accept the room upgrade for his personal gain," Mattis wrote. "There was no malfeasance or any indication of material gain by him in this case."
Admirals and ship captains are often faced with difficult choices when it comes to gifts, especially in 7th Fleet, said a former cruiser commanding officer, now retired.
One retired cruiser captain who spoke to Navy Times on background to avoid professional backlash said
The captain had dealings with Leonard Glenn Francis, president and chief executive officer of Glenn Defense Marine Asia, and the central figure in the "Fat Leonard" bribery and corruption trial. He said a culture developed in 7th Fleet in which even well-meaning officers would accept gifts to avoid offending their hosts or because they thought that's how business was done in southeast Asia.
"It starts to become, 'Well, we've always done it this way,' and people start to lose sight of the fact that this is fundamentally wrong," said the retired O-6, who asked for anonymity to avoid fraying business connections with the service.
Faller declined a request for comment by email, saying he didn't have anything to add to the investigation and Mattis's endorsement letter.
Nearly a dozen high-ranking officers have been publically dragged into the growing GDMA scandal, including the head of Naval Intelligence Vice Adm. Ted Branch and his deputy Rear Adm. Bruce Loveless, who have had their security clearances suspended pending the outcome of an investigation into suspected connections to GDMA.
The case also wrapped up the former head of the Naval Academy
Navy officials who spoke on background to discuss the corruption investigation said that there was no immediate indication that the husbanding firm Glenn Defense Marine Asia and its disgraced former head Leonard Francis was involved in Faller's room upgrade.
Another Navy official who spoke on background to discuss the investigation said that generally a husbanding firm would handle hotel arrangements for carrier staff, but could not say if GDMA made arrangements for Faller and his staff during their 2011 stop in Kuala Lumpur.
Francis, a Malaysian national, pleaded guilty in January to what prosecutors claim was a conspiracy to bilk the government out of more than $20 million and bribing Navy personnel with everything from prostitutes and golf junkets to tickets to the Lion King and Lady Gaga concerts.
David B. Larter was the naval warfare reporter for Defense News.