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'Fat Leonard' Scandal Jams Up Dozens of US Navy Flag Moves

February 8, 2015 (Photo Credit: US Navy)

WASHINGTON — It was a festive day at the US Naval Academy last July 23 as the US Navy's top leadership gathered in Annapolis, Maryland, for a change of command and retirement ceremony. Vice Adm. Mike Miller was ending a four-year tour as academy superintendent and retiring with honors after a 40-year career.

Except that when the hoopla died down, Miller wasn't allowed to leave the service just yet. Even though his official online biography reads "retired," he's still being carried on the Navy's active-duty rolls — at a reduced two-star level. And although he has no specific job — or billet, in Navy-speak — he counts against the service's allocated total of 219 admirals.

Defense officials said Miller is one of an estimated three dozen flag officers under federal investigation for potential wrongdoing in the Glenn Defense Marine Asia (GDMA) case, also known as the "Fat Leonard" affair, after the nickname of the company's leader, Leonard Glenn Francis.

Francis is in federal custody in San Diego and has admitted to numerous instances of bribery, influence peddling and corruption attempts. A number of naval officers and civilians already have been charged and some convicted, and the investigation, which was announced in mid-2013, is — by all accounts — showing no signs of slowing down.

Other flags known to be caught up in the affair are Vice Adm. Ted Branch, the head of naval intelligence, and Rear Adm. Bruce Loveless, the director of intelligence operations. Both officers were restricted by the Navy on Nov. 8, 2013 — with their security clearances revoked — pending the outcome of the investigations. No outcomes have been announced.

Until investigations by the Department of Justice (DoJ) and the Navy are concluded, however, none of the officers under scrutiny can move on — either to resume their jobs or take up new ones. Their replacements can't take over, either.

Shockwaves Across the Service

The lengthy investigations causing so many careers to be placed on hold for so long are taking their toll on the Navy's leadership. The pyramidal US military personnel system is predicated on an "up or out" structure, with active-duty personnel holding a specific job only for a certain period of time — usually 18 to 36 months.

After that, it's time for whomever has that job to move on and for someone else to move in. As officers move up the pyramid, fewer and fewer jobs are available, and only a few blockages can have ripple effects far beyond that specific position.

The situation is affecting Navy commands ashore and afloat, across the globe.

For example, Vice Adm. John Miller (no relation to Mike Miller) has been the commander of US Naval Forces Central Command in Bahrain since May 2012. In March 2014, he was named to become the next deputy chief of naval operations for Plans, Policy, and Operations at the Pentagon, and should have been relieved by now. But his replacement has not arrived — not even been announced — because that person is under investigation by Justice in connection with GDMA. Miller, according to defense officials, is not under investigation.

"Others are in the same situation," a defense official said Feb. 5.

A number of officers such as Mike Miller were planning to retire over the past year or more, but are being held over pending the results of the investigation.

"It becomes a lot more complicated to deal with folks once they're outside the military," said the defense official, explaining why Mike Miller is being held over. "The ability to handle it is a lot easier keeping them in uniform."

The flags being affected break down into three groups, the official said.

"There's a group that have left jobs thinking they were going to retire and are waiting. There's a group that are in jobs they would like to leave and move on to retirement, and a group that thought they were going to other jobs but because they're somehow being reviewed they're unable to do that."

The Justice Department is not sharing many details of its investigation with the Navy, and the service is not clear precisely how many officers are under scrutiny.

"Folks don't know if they're not being moved because they're under investigation or because they're part of the daisy chain," the defense official said. "And that's caused consternation among those individuals."

And Justice isn't the only entity handling the investigations. Even if DoJ concludes an individual won't be charged with criminal conduct, it could decide the case warrants further investigation by the Navy for ethical or code violations. For those cases, Navy Secretary Ray Mabus announced on Dec. 20, 2013, he would establish a Consolidated Disposition Authority (CDA) headed by a senior flag officer to review any allegations.

To date, the CDA has not released any judgments — although there are indications some announcements could come quite soon.

Dragging on for Months

Worries about how far and how long the investigation would reach have been legion since the scandal first came to light in November 2013.

GDMA is a "husbanding" company, a firm that handles a variety of arrangements for visiting ships — piloting and docking services, taxis and catering, customs and legal services, food and fueling arrangements and more.

For a time, GDMA was the largest such company in Asia, and dozens of US Navy warships and commands made arrangements with the company — along with most other navies operating in the region. Hundreds of officers and officials came in contact with the firm, many of them personally greeted by Francis — a character widely known among veterans of Western Pacific tours.

It's also clear the investigation goes back nearly a decade. For Mike Miller, any alleged involvement most likely dates from the first half of 2006, when he commanded the Ronald Reagan Carrier Strike Group. The Reagan deployed in January 2006 and returned home that July. Since then, Miller served ashore in Norfolk, Virginia, then in Washington as the chief of legislative affairs, before moving to superintendent at Annapolis in 2010.

Defense officials said it appeared Justice is concentrating on individual strike group deployments as they work through the investigation. If that's the case, there have been at least 48 Western Pacific carrier strike group and amphibious ready group deployments since the Reagan's 2006 cruise, along with dozens of individual ship deployments. Virtually all of those Western Pacific cruises are likely to have made use of Glenn Defense Marine Asia's services.

It appears an individual doesn't necessarily have to be accused of wrongdoing to trigger an investigation into their behavior, defense officials said. Rather, simply having dealings with GDMA could start a probe.

In Mike Miller's case — and potentially in other cases as well — his initial reduction in rank and paygrade is not tied to the investigation, but to the Navy's bureaucratic rules.

"The law required Vice Adm. Miller revert to his permanent grade of Rear Adm. (upper half) after 60 days from the date he was relieved as the Superintendent of the US Naval Academy," said Rear Adm. Dawn Cutler, chief of naval information.

Simply put, she said, if a three-star or four-star admiral isn't approved for another appointment at the same or higher grade, or if the retirement at the senior level isn't approved, the person drops back to the two-star level.

Miller's retirement request, she added, "is under review."

Through an academy spokesman, Miller declined to comment on this story.

A spokesman at the Justice Department in Washington also declined comment.

But the Justice investigation appears to be widening its scope, defense officials agreed, and shows no signs of slowing down.

"Top officials thought initially they could manage their way through this, and that belief is waning. I don't think anyone understood the potential magnitude of time and effort this would involve," the defense official said.

"They understood there would be some delay — some weeks or a few months. But now we're here more than a year later… we're unable to put a lot of this behind us. We're at the mercy of the investigation's timeline."

And as it continues, the investigation's secondary effects are becoming more visible.

"There's a resulting loss of opportunity for the Navy to compete for joint flag jobs," the defense official said. "Individuals can't get their tickets punched for specific jobs. There's an overall sense of frustration, including people watching their shipmates get caught up in it and wondering if it's worth it. There are opportunities outside the Navy and it plays into the calculus" whether they stay in or get out.

"One way or the other," the defense official said, "it affects most of the 219 folks in the flag wardroom."

E-mail: ccavas@defensenews.com

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