Posted on November 21, 2022
From Kota Kinabalu to Caracas: How One Conspiracy United Domestic, Military, and International Law and What It Means for U.S. Global Security
By: Katherine Owens
The bribery and fraud conspiracy between a Malaysian businessman and senior U.S Navy officials known as the “Fat Leonard” scandal has become a tangle of federal investigations, military justice, international law, and U.S. global security, and it is not over yet.
The Role of U.S. Federal Law
On January 15, 2015, in accordance with a plea agreement, Leonard Glenn Francis and his corporation, Glenn Defense Marine Asia (GDMA), pled guilty to conspiracy to commit bribery, and conspiracy to defraud the United States.[i] The historic scheme involved multiple top Navy officials who took millions of dollars-worth of bribes in exchange for ensuring that U.S. naval vessels frequented Francis’ port facilities, funneling naval port support contracts to GDMA, and passing him military intelligence and investigation information.[ii] Once under contract, Francis would over-charge the Navy for the port support services provided, including refueling, recreational activities arranged for the sailors, other maintenance, and sewage disposal.[iii] As of 2019, the Department of Justice (DoJ) had issued thirty three indictments of naval personnel and most of those charged have pleaded guilty through the federal court system.[iv] In addition, the DoJ investigated and decided not to prosecute almost 450 naval personnel.[v]
The Role of U.S. Military Law
Even though the federal government declined to prosecute them, the 450 servicemembers could still face judicial proceedings within the U.S. Navy. To determine who of those 450 people should be charged for involvement in the “Fat Leonard” conspiracy, the Navy named a consolidated disposition authority (CDA). The Navy has since identified forty servicemembers to receive disciplinary action under the Uniform Code of Military Justice (UCMJ).
The UCMJ prohibits all criminal activity illegal under civilian law but also includes laws and sentencing options unique to the military.[vi] In the most serious cases, these sentences are administered through court martial proceedings, which are similar to civilian trial proceedings. For example, according to a United States Navy Court Martial Report for March 2018, one of the court-martialed officers went before a general court martial panel of five navy service personnel and one military judge in the military equivalent of a felony trial. The officer pled guilty to “patronizing a prostitute, adultery and wrongfully accepting gifts from Mr. Leonard Francis.”[vii]
Impact on International Law and U.S. Strategy
On the civilian side, following his own guilty plea, Francis was kept under house arrest in San Diego, California. However, on September 4, 2022, while his neighbors celebrated Labor Day Weekend, Francis carefully severed his ankle monitor. By 2 pm, Francis was across the border in Mexico, headed for Cuba, and then Venezuela.[viii]
The plot began in the south pacific and now involves multiple countries across the globe. As such, the “Fat Leonard” scheme’s most important and ongoing legacy may be its impact on U.S. global security strategy. The scandal has impacted both the U.S.’s security policy toward China and strategic relations with Venezuela.
China
Francis and GDMA operated in the Pacific region and his U.S. Navy co-conspirators were predominately officers of the 7th Fleet, which is part of the U.S. Navy’s Pacific Fleet. The scheme was operating at a time when U.S. security strategy was beginning to pivot toward Asia to address rising Chinese influence.[ix] This policy had two consequences. The first was that because the U.S. was prioritizing efforts to foster positive relationships between the U.S. Navy and strategic ports in the Pacific, ports on the edge of China’s territorial claims were viewed as especially desirable locations for docking.[x] At the same time, as these ports were close to China’s sphere of influence, the U.S. often lacked established contacts at their facilities. Francis and GDMA’s connections and operations in places like Kota Kinabalu and Bangkok combined with the new U.S. strategic goals in the Pacific perhaps made U.S. Navy officials more willing to embrace Francis’ propositions than they otherwise would have been.
The second consequence of U.S. strategy in the pacific was that to meet China’s challenges, the Navy was placing its most promising officers in the 7th Fleet.[xi] As a result, even those that resisted the conspiracy have now been placed under investigation simply because they were part of the 7th fleet during Francis’ operations. These officers have been unable to advance in their careers and because of the Navy’s federally mandated promotion requirement, some of these once-promising personnel have been forced to leave the service entirely.[xii] The Navy could now be facing a deficit of talent and expertise in the same maritime region that continues to be one of the most strategically important in the world.[xiii]
Venezuela
Meanwhile, Francis sits in Venezuelan custody after being captured by local law enforcement through coordination with INTERPOL. The question is: now what?
The U.S. does have an extradition treaty with Venezuela signed in 1922.[xiv] However, the U.S. currently has no formal diplomatic ties with Venezuela and classifies President Nicolás Maduro’s government as an authoritarian regime.[xv] Therefore, while technically the treaty is still valid law, Venezuela might have strategic incentives not to acknowledge it, and as they are estranged from most U.S. allies, they would likely face few diplomatic repercussions for this decision. Indeed, the high-level appeals chamber of the Venezuelan Supreme Court announced on October 21, 2022, that unless the U.S. requests the extradition of Francis within the next two months, Francis will be released. If the U.S. does not request it, Francis will presumably be free to travel on to Russia–his original destination–where the U.S. has no extradition rights.[xvi]
However, very recently, U.S. strategy toward Venezuela has begun to evolve. Some foreign policy experts have attributed this to a realization within the White House that Maduro is unlikely to be overthrown after having survived a horrific economic crisis and suppressing a challenge by opposition leader, Juan Guaidó.[xvii] Others point to the oil shortage caused by the Russian war in Ukraine as the reason that the U.S. is suddenly more willing to lift sanctions on the oil-rich nation.[xviii] Likely, it is some combination of both, as well as some urging from neighboring U.S. ally Colombia. Notably, on October 1, 2022 the Venezuela and the U.S. exchanged political prisoners.[xix] This represents a positive step in relations, as does the fact that Venezuelan authorities did cooperate with INTERPOL to apprehend Francis in the first place.
Will the U.S. request extradition of Francis? On one hand, he is responsible for the largest fraud conspiracy against the U.S. government in recent history and, as discussed, his actions have had far-reaching impacts on U.S. global security. However, perhaps the U.S. will decide not to risk allowing Francis to have any further impact on U.S. global security by making him a potential obstacle for the fledging relations with Venezuela. If the U.S. does request extradition and Venezuela refuses, it could stymie the anticipated sanction reductions, which in turn could have repercussions for the West’s ability to sustain support for Ukraine against Russian aggression. On the other hand, if a request is made and Venezuela fulfills it, it could be a helpful affirmation of the potential for cooperation between the two nations. Either way, the saga of “Fat Leonard” will continue to shape both legal and strategic affairs for the next two months and beyond.
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