Navy captain at Pearl Harbor censured over ‘Fat Leonard’ bribery, fraud scandal

A Navy captain on active duty at Pearl Harbor has been censured for “repeatedly and improperly” accepting gifts from a Singapore-based defense contractor.

Capt. Charles A. Johnson, who received the Legion of Merit in 2016 for exceptionally meritorious service, is the latest military officer with Hawaii ties to be caught up in the wide-ranging “Fat Leonard” bribery and fraud scandal, which the Navy said has cost taxpayers in excess of $34.8 million.

Johnson, now on the staff of Navy Region Hawaii, received a June 14 letter of censure from the secretary of the Navy saying he accepted gifts from Leonard Glenn Francis, the defense contractor known as “Fat Leonard.”

Johnson also made false official statements, Navy Secretary Richard Spencer said.

On July 26, 2006, Francis paid over $6,000 for food, alcohol and entertainment for a party in Singapore to celebrate Johnson’s promotion to commander, the censure states. Johnson, who was serving with Carrier Strike Group 5 at the time, paid $500 for the party, the document says.

Johnson, in turn, disclosed “official information” to Francis, the Navy said.

A decade-long conspiracy

Francis, a 350-pound defense contractor and Malaysian national, pleaded guilty in 2015 to bribery and fraud charges over the decade-long conspiracy.

From 2004 to 2010 Francis and his company, Glenn Defense Marine Asia, gave Johnson “expensive gifts” and dinners, with a company employee referring internally to the Navy officer as “in (Francis’) pocket,” according to the censure.

Johnson was censured along with a retired Navy captain and a retired rear admiral for their roles in the scandal.

“Each officer’s conduct is an embarrassment to the thousands of officers, sailors and civilians who do the right thing every day,” Spencer said in a news release. Through Navy Region Hawaii, Johnson declined to comment.

Criminal charges have been filed against about 30 with the Navy or who worked for Francis, with an additional 550, including a former head of U.S. Pacific Command on Oahu, coming under review, The Washington Post reported.

According to an indictment last year, the Justice Department said a Navy rear admiral and eight other high-ranking officers traded classified and internal Navy information for luxury travel, elaborate dinners and the services of prostitutes provided by Francis.

Francis made the payouts in exchange for help in steering lucrative ship service contracts to Glenn Defense in the 7th Fleet, the Navy’s Western Pacific area of operations, officials said.

The Justice Department called the scheme a fleecing and betrayal of the Navy of epic proportions, and said it amounted to a “staggering degree of corruption by the most prominent leaders of the 7th Fleet.”

Johnson’s censure letter states that on Jan. 19, 2008, he attended a private dinner at the Ritz Carlton Hotel in Tokyo for which he paid nothing and Francis paid in excess of $2,200 on food, alcohol and transportation.

In 2009 in Australia and while commander of the USS McCampbell, Johnson solicited a free dinner event for himself and department heads, proposing to Glenn Defense that it would be an opportunity to “indoctrinate” the sailors in Francis’ “way of doing business,” according to the letter.

When Johnson stepped down as commander of Destroyer Squadron 31 at Pearl Harbor on Dec. 29, 2016, he was praised for his role as head of an inaugural Pacific Surface Action Group, which the Navy said “delivered phenomenal success.” Johnson was awarded the Legion of Merit.

The Navy said there is a five-year statute of limitations for court-martial charges, and it is not considering such charges against Johnson, but it is evaluating what further administrative action it will take.

Other officers involved

Former officers who were charged include David Kapaun and Enrico DeGuzman. Kapaun, a former Navy commander and later the civilian deputy chief of staff for Special Operations Command Pacific at Camp Smith, pleaded guilty to making false statements related to his relationship with Francis, the Justice Department said.

Kapaun received at least $50,000 in illicit goods and services, including fine dining and prostitutes paid for by Francis, while Kapaun provided Francis with classified schedules of Navy ship port visits, Justice said.

He was sentenced in 2017 to 18 months in prison and required to pay a fine of $25,000, and $50,000 restitution to the Navy.

Also in 2017, retired Col. Enrico DeGuzman, a civilian deputy chief of staff of operations for Marine Corps Forces Pacific at Camp Smith, was indicted for bribery.

On Feb. 17, 2006, during the USS Blue Ridge’s port visit to Hong Kong, DeGuzman and others dined and drank at the Petrus Restaurant at a cost to Francis of $20,435, the indictment said.

The next month in Singapore, DeGuzman and others had dinner with Francis at the Jaan Restaurant, drinking Paradis Extra at $2,000 a bottle and smoking Cohiba cigars that were $2,000 per box, according to the document.

Birney Bervar, DeGuzman’s Honolulu attorney, said his client has pleaded not guilty, and the case will be going to trial. Pretrial motions are set for December, but no trial date has been set yet, he said.

Now-retired Adm. Samuel Locklear III, head of U.S. Pacific Command from 2012 to 2015, was the highest-ranking officer known to be investigated in the “Fat Leonard” scandal, The Washington Post reported.

Francis told officials he paid for dinners and other favors for Locklear, but the Navy cleared the four-star admiral of wrongdoing, the newspaper said. In a March 13 letter to the Post, Locklear said his contact with Francis included two group dinners in 2003 that were approved after staff legal review.

Officials “reviewed these matters for several months during 2014 and 2015, resolved all issues pertaining to me, and allowed me to retire,” Locklear stated.

But the connection may have sunk Locklear’s chance to become Joint Chiefs of Staff chairman. A 2015 email made public by WikiLeaks from Christopher Kirchhoff, who was with the National Security Council, said Locklear “may drop from the slate” of four candidates and possibly be forced to retire when the results of a “Fat Leonard” investigation surfaced.

Marine Gen. Joseph Dunford, another of those four candidates, was chosen for the chairmanship.