New Zealand navy paid $700,000 to firm mired in ‘Fat Leonard’ sex and bribery scandal

Exclusive: Royal New Zealand Navy says no investigation opened following biggest ever US navy bribery case

The Royal New Zealand Navy paid hundreds of thousands of dollars over four years to a ship services company run by a man now imprisoned in the US for an enormous corruption and sex scandal, the Guardian has learned.

US prosecutors say Leonard Glenn Francis, known as Fat Leonard for his wide girth, had cheated its navy out of nearly US $34m — mostly through overcharging port services and providing gifts to personnel, including arranging sex parties.

The New Zealand navy has told the Guardian it paid a total of NZ$710,235.04 (around £370,000) to Francis’ company, Glenn Defence Marine Asia (GDMA), between May 2007 to December 2011 “for specific ship visits in South East Asia.”

The navy told the Guardian in previous correspondence that it had used a “range of services” in Singapore from bus hire to tug provision.

Responding to a freedom of information request, it added it had “not conducted an investigation into its relationship with GDMA based on the results of the US corruption investigation, nor is there an intention to do so.”

There has been “no standing or enduring contract” between the Royal New Zealand Navy and GDMA, which the navy said it had contracted in Singapore and Malaysia.

A spokesperson on defence for the opposition Labour party in New Zealand, Iain Lees-Galloway, was quoted by local media demanding an investigation.

“There was a significant amount of taxpayers’ money spent on contracts with this company,” he said, according to Radio NZ.

“There’s clear evidence from overseas that this was a company that engaged in bribery and corruption, and the least that can be done in New Zealand is to take a look, just be certain that everything was above board.”

But at a Monday press conference the prime minister, Bill English, said “just because there’s allegations, doesn’t automatically mean something might have happened.”

He said for an investigation to open, “There would need to be some evidence that navy officers had gone about their job of securing contracts in some way that was inappropriate or improper, I would imagine, but you are best to address that to the navy.”

A three-year US case against Francis has severely and consistently rattled the US military. Rear Adm. Robert Gilbeau, the first US admiral ever convicted of a federal crime while on active duty, was sentenced on Wednesday to 18 months in prison for lying to investigators.

Francis, who was lured to the US and arrested in a 2013 sting, pleaded guilty in January 2015 and faces a maximum of two decades in prison.

Twenty current and former Navy officials have been charged so far, while ten have pleaded guilty, mostly for bribes of lavish trips and sex workers in return for routing ships to ports where Francis could overcharge for ship husbandry services.

One US indictment said Francis once rented the MacArthur Suite at a hotel in the Philippines, where memorabilia of former American five-star General Douglas MacArthur was used for sex acts with prostitutes.

GDMA’s website, now defunct, claimed the company had worked with more than two dozen navies around the world.

The UK navy did not hold any direct contracts with GDMA. Francis did, however, buy a decommissioned British Armed Forces ship, Sir Lancelot, which had been hit by an bomb that failed to explode during the Falklands war.

The ship, which Francis bought from a South African company, was renamed “Glenn Braveheart”, refurbished and reused occasionally as a giant party boat, with sex workers hired to entertain US officers, according to US court statements.

The defence department in Australia contracted one of Francis’ Singapore-based companies to provide port services for its vessels in Singapore on two occasions in 2008.

Australia’s border protection agency had also contracted Francis’ local company firm, Glenn Defence Marine (Australia), tender searches show.

Canada’s navy told the Guardian in an email that although had not had any direct dealings with GDMA, it may have received minor support or docking services at various ports.


Oliver Holmes in Bangkok and Eleanor Ainge Roy in Dunedin

The GuardianTramp

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