WASHINGTON — The aircraft carrier John C. Stennis swung at anchor in early October 2012 in the harbor at Kota Kinabalu, on the northwest coast of Borneo along the South China Sea. Chinese island-building activities in the nearby Spratly Islands were only just beginning, but the strategic importance of the region was well established. US Navy ships operating with the Seventh Fleet occasionally visited the port, capital of the Malaysian state of Sabah, but this was the first time a warship this large had dropped the hook. It was a major jump, strategically and logistically.
But the US Navy needed help in making the port call happen — US planners were not that familiar with the myriad services and arrangements needed to support the Stennis and the more than 5,000 sailors on board. In to fill the void, as throughout the western Pacific, was Glenn Defense Marine Asia (GDMA), at the time the pre-eminent ship husbanding firm in the region.
In fact, GDMA had pushed US Navy planners to send the Stennis to Kota Kinabalu, where the company controlled most of the port services and stood to make a significant profit. And they had a friend on the staff of Seventh Fleet, Cmdr. Mike Misiewicz, deputy of fleet operations. Misiewicz, in exchange for money and favors, fed GDMA information on upcoming ship visits and in turn, had a voice in where those visits would take place.
Francis Photo Credit: US NavyGDMA and its chief executive Leonard Glenn Francis — widely known as "Fat Leonard" — are at the center of what is likely the longest-running scandal ever to hit the US Navy. The company, banned in September 2013 from doing any further business with the US, routinely overcharged the Navy by a total of more than $20 million, according to US Justice Department estimates.
Francis is in a US jail after admitting guilt in a plea bargaining agreement, 14 individuals have been charged with federal crimes, and nine, including Misiewicz, have been sentenced to prison terms. Others in or headed to prison include US Navy officers and a former Naval Criminal Investigative Service (NCIS) investigator.
Misiewicz plead guilty on Jan. 28 to one count of conspiracy and one count of bribery. He hadprovided Francis with classified ship schedules and other information and, in return, accepted cash, luxury travel arrangements, gifts, and the services of prostitutes. He was sentenced on April 29 to 78 months in prison, fined $100,000 and ordered to forfeit $95,000 for the scheme. It’s the longest prison term handed down so far in the ongoing scandal.
Misiewicz, who begins his sentence in August, spoke to Defense News about how Francis and GDMA operated in the region — and about their importance to US Navy operations. He described a relationship of convenience, one in which Leonard could get the Navy what it needed in an often corrupt corner of the world; one in which the Navy — including Misiewicz personally — was all too willing to "look the other way and make it all look legit."
Misiewicz was contrite but at the same time sought understanding for the exceptional value and services Leonard provided to the Navy, the longstanding trust placed in him and how that served to blind some leaders to his corrupt ways and his abilities to manipulate people to get what he wanted.
The Stennis visit, Misiewicz said, was "one of the most impacting things I did," during his tour at Seventh Fleet. "All you really need to do is look at the geography and see it makes sense, and why we would be interested in that."
While there are other husbanding agents in the region, there was little question GDMA would get the contract even though, Misiewicz said, it was clear the company’s prices were at a premium.
"For us to get a ship to a port, Leonard did our dirty work. That’s the best way, and most blunt way that you could describe that happening," Misiewicz said.
"Whether it’s through the NCIS, or the embassy, with the host nation police, with the host nation government, the guy was connected and had every in and out on making things happen. And as morally upright as we are as Americans, the fact of the matter is some things over there in Asia have to be done behind closed doors."
GDMA hired former US government employees who were familiar with Navy contracting regulations, Misiewicz said, and they became regional experts on US rules, often with a much deeper knowledge than US civilians and officers. They were also far more adept at making complex port arrangements, all at a price.
"We didn’t have enough checks and balances and oversight within our contracting realm to stop him from defrauding us, and I’m shocked that we didn’t," Misiewicz said. "To us war fighters and operators, I just assumed that was happening."
But GDMA had a widely known reputation as a "strategic partner" with the US, Misiewicz said, a partnership going back many years. Planners could go to GDMA for help in opening up or expanding a port or region to the US, and the Stennis visit to Kota Kinabalu was an outstanding example.
"We probably planted the seed, to think about Kota Kinabalu," Misiewicz admitted.
Misiewicz being hugged by family members in 2010 when, as captain of the destroyer Mustin, he returned to the land he fled as a child. He was adopted by an American family and raised in the US. Photo Credit: MC3 Devon Dow, US NavyMisiewicz, a US Naval Academy graduate who received a Bronze Star for service in Iraq, was awarded a Legion of Merit for his tour on the Seventh Fleet staff. The citation highlighted the Stennis visit.
"His efforts allowed United States Navy ships to access previously inaccessible ports and areas of operation, areas with strategic significance," the citation said.
Ironically, Misiewicz noted, his federal indictment "pointed to that [visit] as one of my most criminal."
And while US Navy ships continue to occasionally visit Kota Kinabalu, no carrier has been back since the Stennis in 2012.
With criminal and ethical investigations continuing, few are willing to speak up about GDMA’s strategic value to the US, Misiewicz observed.
"Yeah, he was a crook, but he was our crook," Misiewicz said.
"The Navy chose Leonard Francis and GDMA because we got strategic access to places the carriers didn’t go into for years and years. And yes, it cost us money, but the strategic value of some of those things outweighed the expense."
Once the fraud was exposed, "we had no recourse but to take action. But at the same time, there is no one that’s going to speak right now who will talk about the strategic value of Leonard Francis, although that was done years and years before the arrest."
Misiewicz freely admits his actions were wrong, but it was the apparent strategic partnership that made it easier to reconcile providing what he claims was selected information on ship movements to GDMA, even though the information was classified.
And Misiewicz noted that while GDMA committed fraud, not everyone in the company was a crook.
"A lot of people in his company had no idea there was fraud," said Misiewicz, who previously commanded the destroyer Mustin when it carried out a Western Pacific tour. "For a lot of us, when we deal with GDMA agents on the ground they're exceptional. They bend over backwards to take care of us.
"There are probably any number of incidents where a sailor did something really screwed up that could have been an international incident and the GDMA folks took care of it. That's another elephant in the room that will never be said — because who's going to say that this company or Leonard did any good?"
Francis, Misiewicz said, was able to get the US Navy into ports despite corruption in those countries.
Americans, he noted, "wouldn't go behind the door and seek bribes so our ships could come in, but apparently we can have a third party like Leonard do it for us and look the other way and make it all look legit. And that's what really happened in a lot of these cases."
"It gets back to money is important but it should not be the driving factor," Misiewicz said. "There's something that needs to be said about the relationships and partnerships."
The Kota Kinabalu visit, Misiewicz admitted, "was the government prosecution’s biggest hit on me. There were only a couple times in my whole tour where I had either the time or the care of weighing in on a port visit, and the whole way that this story's been told about me is I used my influence. There's no way I could have done that time and time again. The times that I did weigh in, I weighed in because strategically they were important."
Favors for Information
Leonard and GDMA craved information on US Navy port visits so they could arrange in advance goods and services, cut out the competition, and steer the visits to ports where they had greater influence.
GDMA could also provide information on ports, even where they did not have husbanding contracts, Misiewicz said.
"They gave me a plethora of stuff and information," he noted. "We in the Navy only have tours that are two years long, people go in and out. A lot of the lessons go with the people and when they don't do a good job with information management those lessons aren't there.
"I kept a relationship with Leonard because I could get that kind of information," Misiewicz admitted.
"Of course Leonard would shrewdly use that relationship to his advantage, too. ‘Hey, I see you guys aren't going to Port X or Y. Why not?’ And sometimes his points were valid. He'd be counting the frequency of the port visits just like us. He would say, ‘you've gone to Singapore 10 times and Hong Kong eight times. You haven't gone to Malaysia this year.’ And so, you're right Leonard. Malaysians are important, too."
In return, according to the Justice Department, Francis and GDMA gave Misiewicz cash, paid for luxury international air travel on at least eight occasions for he and his family, provided Misiewicz' wife with a designer handbag "and plied Misiewicz with the services of prostitutes on multiple occasions."
But Misiewicz continues to dispute prosecutors’ contentions about his motives with GDMA.
"It wasn't this corrupt, ‘I'm going to conspire with Leonard and we're going to make him more money.’ I truly didn't know he made more money at these other ports," Misiewicz claimed. "The story [that’s been portrayed] is that I conspired because I knew he made more money at different ports so I sent ships to those ports. It never happened."
But there is no question GDMA made money when the Stennis visited Kota Kinabalu in 2012. Misiewicz described how the visit came about.
A Carrier in Kota Kinabalu
"We had a carrierthat had a sudden change in schedule and ended up having an opportunity to do one port visit," Misiewicz explained. "It just came up within weeks. So we thought about it and Leonard of course knew before I did. That's the other thing -- he [already] had the schedule. I would take a schedule and strip off everything except the port visits I thought would be germane to him."
Misiewicz said he routinely communicated with Leonard and Edmond Aruffo, a former US Navy lieutenant commander working for GDMA.
"They would ask me questions about schedules that I had no idea about," Misiewicz said, noting he wasn’t GDMA’s only source for information.
"They had the real-time intelligence. ‘Why is this port visit all screwed up or what happened to this port visit being canceled?’ So they had other ways. I think they had the actual schedules. That's come up in the evidence, that they got them from all sorts of people.
"I said Leonard, I'm worried about it. Kota Kinabalu isn't that big and a carrier would overwhelm it. My thought was we should maybe take a smaller amphibious assault ship. Or build that strategically we want to be there and maintain constant presence and show our commitment to the Malaysians, both to get surface access and [aircraft] access."
Misiewicz suggested Kota Kinabalu at the Navy planning conference with various commands, including US Pacific Command, the Pacific Fleet, and the Japan-based Seventh Fleet, where, he said, it was common to discuss up to three possible ports to visit.
"I remember getting a lot of pushback on this one," he remembered. "I think from the ship perspective they didn't know anything about Kota Kinabalu. They felt it would be crappy for the sailors and they'd just been put through the wringer in terms of their deployment," with the ship hurrying to deploy four months earlier than planned. "They felt that wasn't a good deal. But strategically it made a lot of sense to everybody."
The Navy’s leadership also felt the strategic significance of the visit would be important, Misiewicz said, but the logistics people warned the visit "is going to cost a lot of money." The ship would need a wide variety of services in an unfamiliar port — tugs, pilots, fendering, lighters, supplies, boats, security and more. GDMA, he noted, was adept at finding loopholes to charge the most.
"Everybody knew when the decision was made that yes, this is going to cost more, but strategically this is the right thing to do. And that's the way it went," Misiewicz said.
The carrier’s after-action report, he noted, "said wow, this was a really good port visit for our sailors. But the black cloud over it all was, this cost a whole lot of money. Was this worth more than if we had gone to Singapore as the logisticians said? Well from the money perspective absolutely. Two million dollars more. Is $2 million worth it to deter a war?"
Misiewicz remembered being astonished to see the bills from GDMA.
"You gotta put it in a strategic perspective, and I think those that made the decisions for Stennis to go into that port knew that."
Misiewicz was confident Francis was not passing on classified information to enemies of the US.
"As much of a crook as he was he was very committed to our strategic needs," Misiewicz said of Leonard. "There's no worry about a threat to our ships with this information. You know he's a crook. And he's all about money, so why couldn't he sell that information to somebody else? That could very well be. But in my heart it didn't happen."
And the information GDMA would provide was sometimes better than what the Navy was getting.
"Some of that information we would have from our own intelligence, but there were times when that information was not as good as what GDMA had," Misiewicz said.
"I cultivated a relationship with Leonard and Aruffo for very strategic regions. They allowed me to do my job better. But at the same time I corrupted myself personally by accepting things of value, so I can't deny that part of my wrongdoing."
"It's adult Hollywood," he said. "The temptations on all of us can get the best of us and we're not strong people and unfortunately I was a weak one."
Investigations Still Active
Federal investigators continue looking for more individuals involved in illegal activities with GDMA. Since the fall of 2013, 14 individuals have been charged, with nine admitting guilt in plea bargain deals. Dozens more are said to be under investigation, although the Department of Justice will not confirm a number. Charges and convictions in the case continue.
Francis and Aruffo have each pleaded guilty and await sentencing. Paul Simpkins, a former Navy contracting official, pleaded guilty June 23 in San Diego to accepting bribes from GDMA.
On May 27, three current of former Navy officers were charged in the GDMA case, and on June 9 a flag officer, Rear Adm. Robert Gilbeau, admitted to one count of lying to investigators.
Beyond that, another round of investigations is being conducted by the Navy to uncover ethical violations. Dozens of individuals have been investigated, and while many have been cleared, a number have been hit with sanctions of varying degrees. Many officers are being held over in their current assignments while the probes continue — in turn holding up even more officers who either can’t move on because their relief is under investigation, or can’t move up because the person above them is frozen in place. The situation’s scale is unlike anything ever before faced by the service.
The Navy no longer does business with GDMA, and service secretary Ray Mabus has said repeatedly the procedures and oversight of Navy contracting has been thoroughly changed.
"We now have some of the strongest counter-fraud efforts in the government, to include additional measures to assure contracting integrity, and although the vast majority of our men and women in uniform live out the Navy's core values … we will continue to hold accountable those involved in fraudulent conduct," Mabus said June 9 in a statement following Gilbeau’s court appearance.
Investigators are clearly going back more than a decade in their search for wrongdoing. The probe into Gilbeau, for example, looked at his western Pacific service for 2003 and 2005.
Still, the investigation shows no signs of slowing down. In a statement June 9 accompanying the announcement of Gilbeau's plea bargain agreement, US Attorney Laura Duffy was adamant that the probes would continue.
"Whether the evidence leads us to a civilian, to an enlisted service member or to an admiral, as this investigation expands we will continue to hold responsible all those who lied or who corruptly betrayed their public duties for personal gain," Duffy said.
But three years after the scandal came to light, some are beginning to question whether the investigation is dragging because prosecutors refuse to see that they have gotten about all there is to get.
"There’s no value in keeping this open ended and trying to say that there are scores and scores, or two hundred officers under investigation," Misiewicz said. "The Navy should look into it and deal out the appropriate punishment as they see fit. But let’s get it out of the justice system, and let’s stop paralyzing our Navy and affecting strategically what we do around the world.
"The Navy has already gotten the message," he added, pointing to his own prison sentence.
Jeffrey Addicott, a former Army legal officer who’s now a law professor in Texas, agreed that the investigation may have achieved its purpose.
"I’m glad the military is finally holding to account the people in the upper echelon. They need to go to jail," he said. "But when you start going down and down and back in time to anybody that’s done anything untoward, it’s a little much."
Investigations sometimes take on a life of their own, Addicott observed.
"Where you draw the line? Obviously the Department of Justice has an axe to grind on many issues. They have discretion, and they’re motivated — in my opinion, in some cases — by more than just the facts. They have an agenda. And their agenda is sometimes at odds with the military mission."
Rachel VanLandingham, a law professor and retired Air Force officer who served more than a decade as a judge advocate, disagreed.
"The indictments mean they’re continuing to find evidence," she said. "When you have conspiracies to defraud and obstruction of justice … that means there are probably systemic issues here. And systemic issues require time and patience. Especially in a culture that doesn’t necessarily like outsiders.
"You wonder if there’s a deeper level of obstruction," VanLandingham said. "It’s going to take time. Investigators should never be rushed in my judgment."
Adm. John Richardson, the chief of naval operations, might have sounded a hint of frustration when asked June 20 about the continuing investigation.
"We are committed to moving through this, cooperating with the Department of Justice in every way we can," Richardson said. "But we do want to move through it."
Misiewicz will surrender to federal authorities on Aug. 1 to begin his incarceration.