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How a colorful Malaysian businessman bilked the U.S. Navy for millions

DAVE DAVIES, HOST:

This is FRESH AIR. I'm Dave Davies. Few institutions are as revered in the United States as the U.S. military. Our guest, Washington Post reporter Craig Whitlock, has spent much of the last 10 years investigating a shameful and very recent chapter in the history of the United States Navy. It's a case in which hundreds of senior officers on active duty accepted perks and payoffs from a defense contractor, who in turn made tens of millions of dollars overcharging for his services with their help. There's a colorful con man at the heart of this story, a charming rogue whose company provided services to ships docked in Asian ports, including tugboat escorts, security, food, water, bilge pumping and more. He had a talent for seducing Navy commanders into helping him, metaphorically and literally, with trips, lavish gifts, gourmet meals, fine wines and often sex workers, sometimes in such numbers that one party was described as a Roman orgy. The contractor, Leonard Glenn Francis, was a 6-foot-3 glad-hander who struggled with obesity and was often referred to by his Navy friends, at least behind his back, as Fat Leonard. In reporting the story, Whitlock doggedly pursued information about the scandal that the Navy did its best to keep hidden. He filed dozens of public records requests and a federal lawsuit and was able, through his own sources, to accumulate a breathtaking amount of detail about the revels of Navy officers with the contractor and the sprawling criminal case that followed. Craig Whitlock is an investigative reporter for the Washington Post who specializes in national security issues. He's covered the Pentagon, served as Berlin bureau chief and reported from more than 60 countries. He was last on FRESH AIR to discuss his book on secret government documents about the war in Afghanistan. His new book is "Fat Leonard: How One Man Bribed, Bilked, And Seduced The U.S. Navy." Well, Craig Whitlock, welcome back to FRESH AIR.

CRAIG WHITLOCK: Thanks so much for having me, Dave.

DAVIES: Tell us about the central character here - Leonard Glenn Francis.

WHITLOCK: Leonard Francis is this - he's a maritime tycoon, or at least he was until he was arrested 10 years ago. He's from Malaysia. He grew up on the island of Penang, which is right in the Strait of Malacca, one of the busiest waterways in the world. Most of the world's shipping traffic goes through the strait near Malaysia, from Asia to Europe and points beyond. And so he grew up in this international port. And his company owned a small firm that serviced ships - cargo ships, merchant ships - going through the strait. But over time he had big ambitions and he wanted more and more. He sort of saw himself, he dreamed of himself becoming a Malaysian Aristotle Onassis. And the way he did this and pursued his ambitions was to win defense contracts with visiting foreign navies. And, of course, starting in the early 1990s, when he started to expand his business, no Navy in the world was more powerful than the United States Navy, and they were frequently coming through that part of the world. And he saw a real opportunity to service U.S. Navy aircraft carriers, destroyers, submarines. And over time, he became a big tycoon doing this. He had contracts worth $200 million at one point with the U.S. Navy to supply fresh water, food, fuel, tugboats, barges, you name it. Anything a U.S. Navy ship might need when it came into Port, Leonard provided. He referred to himself as the Walmart for the U.S. Navy.

DAVIES: Wow. We should hear just a little of his voice. And we have a cut here. This is from some interviews he did for a podcast called "Fat Leonard" with journalist Tom Wright. This is after his conduct was exposed and he didn't mind talking freely about it. And here he's describing a party he threw in Hong Kong for some U.S. Navy officers. It's a Christmas party. Let's listen.

(SOUNDBITE OF PODCAST, "FAT LEONARD")

LEONARD FRANCIS: So when we had this Christmas party, I had, like, half a dozen or more girls that basically charaded as Santa Nina outfits, little short mini-skirts, you know, dressed up as Santas, little Santas. And they were, like, sitting on everybody's laps and snapping pictures and, you know, rubbing everybody down. And a couple of the important customers got laid. So I set that up, you know, at the - at my reception. That's what we always do. Because these guys - you know, they're never going to say no.

DAVIES: And that is Leonard Glenn Francis, the guy at the heart of this story, in a podcast called "Fat Leonard." Well, we hear there, Craig Whitlock, that he speaks English fluently and is pretty unashamed about what he's done.

WHITLOCK: That's right. And it's important to remember a few things about Leonard Francis. One is that he has a pretty big ego. So he's telling this story after he's been arrested. He's not ashamed at what he did in terms of bribing and lavishing gifts on U.S. Navy officers over the years. He's proud of this. And Leonard is also a showman. So the secret to his business success over the years was that he would bribe U.S. Navy personnel with these extravagant gifts or meals or parties and cash, hotel rooms, you name it. But with Leonard, everything was over the top. And in this case, he's not exaggerating when he's talking about his Christmas party. This was a party he organized in 2004 for the USS Abraham Lincoln, a carrier strike group that was visiting Hong Kong. And, you know, this dinner party cost $60,000. It was about $800 a person. And he had - you know, lobster thermidor was one of his favorite main dishes. He had caviar, truffles, of course, he served cigars. And not just any cigars. They had to be Cuban Cohiba cigars. And as he described, he had what he called Santa Ninas, or Santa girls, who were several attractive young women in skimpy elf costumes parading around. He had a troupe of bagpipers welcoming the U.S. Navy personnel to this party, which was on the top floor of a five-star Hong Kong hotel overlooking the harbor. So with Leonard, everything was over the top. He wanted to wow his U.S. Navy friends. He wanted to give them a taste of the high life that he knew they would never be able to afford on their government salaries.

DAVIES: Right. And boy, it had an impact. You know - you know, in a way, particularly the sex and the drinking is sort of rooted in this long history of sailors who, having been at sea for months, come ashore and want something a little more exciting than a sightseeing tour, right?

WHITLOCK: Exactly. And Leonard took advantage of that history, particularly in Asia, going back generations, when U.S. Navy ships would pull into port in places like Thailand or Malaysia or South Korea. There is a history of legalized or semi-legal prostitution that sailors would take advantage of, but he wouldn't be so crass as to just supply, for lack of a better description, sex workers off the street. He was only targeting the senior officers, admirals, ship captains, and he had to fly in what he saw is high-class sex workers from other countries who were, again, seen as is a higher class level than Navy sailors might otherwise encounter.

DAVIES: All very memorable, I'm sure, to those servicemen. You know, it's interesting - in the book you describe so many of these parties. I mean, there were a lot of them, and you got an enormous amount of details. But he didn't just offer, you know, booze, sex and food. He was smart about approaching people who might need companionship. He also courted admirals' and commanders' wives, too; didn't he?

WHITLOCK: He did. Leonard had a real knack for sensing people's weaknesses, or, as he called them, their vices. He would put an arm around someone, a Navy officer or a law enforcement agent and say, tell me, what are your vices? And he'd laugh. He was very charming, but he was very direct. You know, his saying was, every sailor has a weakness. You just have to find it. So he would study people to see, you know, who was having marital problems, who in the rumor mill had a drinking problem, who would be willing to take a small gift? You know, he wouldn't just start out over the top with a big envelope of cash. He'd see who's willing to take a Cuban cigar, who's willing to take a small dinner, and then he'd escalate from there. Under federal ethics regulations, if you're in the Navy, you're only allowed to accept gifts worth $20 or less from a defense contractor like Leonard Francis.

And, again, it's important to remember that his company had millions of dollars in defense contracts with the Navy. So everyone in the Navy knew who Leonard Francis was, what his official job was, and that they were not supposed to accept gifts, at least not worth more than $20. But Leonard had this way, where he would slowly reel people in. He would see who is willing to take a $50 gift, then a $100 gift. And before they knew it, he was giving them you know, thousands of dollars. And by that point, he had them over a barrel and he could blackmail them if they didn't do what he wished.

DAVIES: Reading all this, I wondered how he had time to run a business. I guess this was running the business.

WHITLOCK: It is remarkable, his fortitude and his stamina, given, frankly, how big he is and his health deteriorated over the years. But this was a big man. He weighed, on average 350 pounds. But there were times when his weight ballooned out of control to 500 pounds. And yet he's flying all over Asia, sometimes the United States, going from port to port to greet U.S. Navy senior officers whenever they pull in on a ship. And he was essentially a full-time concierge, having parties and dinners and just making sure these Navy officers were taken care of. But he was constantly on the go, flying business class from Singapore to Japan to Australia, you know, day after day.

DAVIES: You know, these events happened in the early 2000s, and by then some women were making their way into the senior command ranks of the Navy. How did Leonard deal with that? Did they attend these parties? Did they hear about them and object? How did they figure in?

WHITLOCK: When Leonard first started working for the U.S. Navy, just when the United States military was allowing female service members to serve on warships - you know, up until then, there had been a segregation of sorts in the Navy, and this was a big cultural change. But even to this day, the U.S. Navy is about 85% male. So female officers and enlisted sailors are still a distinct minority. But Leonard, sort of - he would get a sense of who might complain or who might not. But I'll give you one example. There was an enormous party he threw in 2003 for the USS Peleliu. It was a marine expeditionary strike force that was coming through to the Persian Gulf. It stopped off in Singapore. And Leonard threw one of his crazy bashes that probably cost $30,000. And at this party, most of the officers were men. The admiral in charge of the strike group was a man, and he was more than happy to go to Leonard's party. There were prostitutes sitting on people's laps. Leonard was unabashed about this. This was one of the parties that another officer years later described as a Roman orgy. Yet there was a woman, a female ship captain, the commanding officer of a destroyer, the USS Decatur, who was present at the party and was clearly very uncomfortable. But her boss, the admiral, of course, was having the time of his life. So she had to walk a very fine line about how she responded. She left a little early, but she couldn't really protest right there. The next day, she sent an email to the admiral's chief of staff to complain. But again, she had to be careful. You can't, you know, call your boss an idiot for allowing this kind of party to happen. So she worded it in a way like this. She said, you know, I was uncomfortable with last night's event. Perhaps it turned out in a different way than the admiral intended. But it was clear, as she wrote, that this would fail the Washington Post front-page test. And this is a saying they have in the Navy that if you do something and it gets on the front page of the Washington Post, you know, is that a good idea, right? This is sort of an ethics check. And - but again, she had to be careful. Clearly she was trying to tell her boss that you were an idiot. What if this gets out? We're all going to look like fools and we'll get in trouble. But that's the way she had to word it. Now, interestingly, the admiral, of course, didn't even respond, didn't care, and all details of this dinner party were kept under wraps for 20 years by the Navy until I was able to get details of it for my book. So the Navy was very good at putting a lid on this kind of behavior for years and years.

DAVIES: We need to take a break here. Let me reintroduce you. We are speaking with Craig Whitlock. He's an investigative reporter for The Washington Post. His new book is "Fat Leonard: How One Man Bribed, Bilked, And Seduced The U.S. Navy." We'll continue our conversation in just a moment. This is FRESH AIR.

(SOUNDBITE OF HOLT VAUGHN'S "BITTER SUITE")

DAVIES: This is FRESH AIR, and we're speaking with Washington Post investigative reporter Craig Whitlock. His new book is about an embarrassing scandal in the U.S. Navy, involving a Malaysian businessman who gave perks and bribes to senior Navy commanders and in return, overcharged the government for his services. The book is called "Fat Leonard."

So Leonard, this Malaysian businessman, found that he could ingratiate himself with officers by providing, you know, parties and drinks and perks and in some cases, cash. Tell us a bit about how he managed to turn this into money for himself. What were some of the ways that he overcharged the government?

WHITLOCK: So there were two ways, really. He had contracts signed in advance with the Navy to provide certain services in certain ports, and the contracts would lay out, you can only charge X amount for a particular service and, of course, you know, hundreds of pages and laying out the line items and what he could charge. You know, federal contracting is pretty detailed that way. But Leonard was always looking for a way to break the rules or get around it.

So by providing these gifts or bribes, he was essentially trying to get Navy officers - whether the supply officer on the ship or the commanding officer or the contracting personnel, he wanted them to look the other way while he overcharged them by hundreds of thousands of dollars to remove sewage or wastewater from a ship or to overcharge for fuel. He really wanted them to not pay attention to the bills, and he was so over the top with this that sometimes he would have subcontractor bills, and he would submit phony invoices in foreign languages like Thai or Indonesian, knowing that most U.S. Navy personnel didn't speak those languages. So he would just forge invoices, sometimes for tens of thousands or hundreds of thousands of dollars to get money off the top.

And, again, people in the Navy knew he did this sort of thing. He had a reputation for being dodgy, even though he provided pretty reliable services, everybody knew he overcharged. Yet by - again, with all his gifts and favors, he was asking and essentially demanding that Navy personnel look the other way. And sometimes he would give them kickbacks in return, whether cash bribes or, you know, a night out with sex workers. And this was a pretty enormously successful formula for him.

DAVIES: You know, you describe a case in which he he charged a ship for delivering water and claimed he delivered more gallons than the ship's tanks would actually hold. There are just so many galling examples of this stuff. And, you know, I have to say, I mean, any public employee with any level of seniority or responsibility would know implicitly that, you know, going to these parties and taking these expensive dinners and gifts and prostitutes and all that - they would know that that is wrong. They knew about the rules. Did any hesitate or get advice from Navy lawyers?

WHITLOCK: They did. There were a number of people throughout the years, a striking number, who tried to blow the whistle on Leonard Francis, who tried to sound the alarm up the chain of command, and invariably, each time they were ignored or shouted down or even drummed out of the service. Leonard had such connections with admirals and senior officers, and he had so many informants or moles embedded throughout the Navy, people who were taking his bribes, that he was always able to squash any note of protest. You know, we talked about this Christmas party for $60,000 that he threw in Hong Kong one year for an aircraft carrier. Well, the supply officer of the aircraft carrier was a captain, a senior officer. He had gotten wind of this party. He saw the invitation. And he went immediately to the ship's commanding officer and said, you know, you can't go to this party. You can't let people on the ship go to this party. Leonard Francis is a contractor. You know, under the federal regulations, we can't accept gifts from him like this. You know, he's just looking for a way - a justification to overcharge us for this port visit. So it was as direct of a warning as it could get. And the supply officer actually forbade any officers under his command from going to the party, but his superior officers just ignored him. They wanted to go anyway. And sure enough, at the end of the port visit, Leonard came in with a big smile on his face to the ship, to the supply department, and wanted to charge them twice as much as was theoretically possible for pumping wastewater off the ship. And he was laughing about this. And the supply officers knew - again, he, Leonard, was in tight with the commanding officer. He had just thrown this extravagant party and Leonard was essentially pulling rank on them, forcing them to accept his overcharged bills. And this was, again, a formula that he relied on time after time after time. And it almost always worked.

DAVIES: Yeah. There was one case where someone objected to him, and he said, look. I don't take orders from lieutenants. I have guys with a lot of stars on their shoulders. You were covering the Pentagon in the 2000s. I guess his case first came to your attention when there were arrests in it, which was 2013. When you started asking people in the Navy, did it turn out that they knew of this guy for a long time?

WHITLOCK: Absolutely. So I still vividly remember this day. I was wandering the corridors of the Pentagon. I was a beat reporter for the Washington Post, and there had been a short item on the Associated Press newswire in September of 2013 about how there had been arrest of a defense contractor from Malaysia named Leonard Francis. And there had been one Navy officer, a former ship captain, and a federal law enforcement officer from NCIS or the Naval Criminal Investigative Service. NCIS - it's like the famous TV show. But these two personnel were arrested on bribery charges for taking bribes from this contractor. And it's - you know, back in that day, it was really rare for a Navy officer and a law enforcement officer to be charged with taking bribes. So I was curious if there was more to this story. And I bumped into someone I knew in the Pentagon who was a Navy officer. And I said, do you know anything about this case? Do you know - who's this person, Leonard Francis? And the officer got a big smile, and he goes, oh, you mean Fat Leonard. Everybody in the Navy knows Fat Leonard, and just started to laugh. And of course, you know, I could smell a good story, right? You know, what do you mean that's his name and how everybody in the Navy knows him. He goes, he's legendary. Anybody who goes to Asia and the Pacific knows about Fat Leonard. So from that point forward, I knew there was a bigger, more important story waiting to be told here about not just who was this figure from Malaysia who had conned so many people in the Navy. But how had so many in the Navy fallen for it? How was he able to infiltrate the fleet like he did? And those are the big questions that took me the better part of 10 years to unravel.

DAVIES: Let's take another break here. We're speaking with Craig Whitlock. He's an investigative reporter for The Washington Post. His new book is "Fat Leonard: How One Man Bribed, Bilked, And Seduced The U.S. Navy." Craig will be back to talk more after this short break. I'm Dave Davies, and this is FRESH AIR.

(SOUNDBITE OF DAVE DOUGLAS' "PLAY IT MOMMA")

DAVIES: This is FRESH AIR. I'm Dave Davies. We're speaking with Washington Post investigative reporter Craig Whitlock, whose new book is about an embarrassing scandal in the U.S. Navy. It involves a Malaysian businessman who provided services to Navy ships in Asian ports and for years seduced senior officers with trips and hotel stays, lavish gifts, expensive meals and sex workers. In return, prosecutors say the officers ignored or actively helped the contractor's schemes to overcharge taxpayers, netting him tens of millions in profits. The contractor in the case was a wily, charming operator known in part for his towering height and expansive girth. Whitlock's new book is "Fat Leonard: How One Man Bribed, Bilked, And Seduced The U.S. Navy."

So Leonard Francis, this contractor, had quite a thing going entertaining and seducing and bribing so many people in the Navy. He also apparently kept pretty good records of these hijinks, which you would eventually, when it all blew up, get copies of all of this. What was his game in keeping track of all this? What was he up to?

WHITLOCK: That's a really good question. So Leonard was a pack rat. He kept everything - emails, phone texts, Christmas cards, hotel receipts. He just kept everything. And part of it, I think, was he just - he liked to keep his hands on records like this. He liked having these mementos of his encounters with U.S. Navy officers, but if he had to, he could always use it as leverage. This was potential blackmail material. And that's something that an astonishing number of senior U.S. Navy officers didn't realize until it was too late, that Leonard had potential blackmail material over them.

He would go so far as to interview sex workers after he provided them at parties for U.S. Navy officers. He wanted to know all the intimate details of who liked to do what. And he would keep notes on these things. He would keep notes of the prostitutes who - you know, whose preferences, who liked girls from certain countries. And he would use this information to cater to them in the future. But it was also very useful if he ever needed to crack down and make people do what he wanted.

Sometimes people in the Navy would partake of Leonard's parties or take gifts, but then they would get cold feet and they wouldn't want to carry out his demands, which they knew were often illegal. But Leonard always had leverage over them. And by that point, it's too late. If you've taken Leonard's prostitutes or his, you know, envelopes of cash, he owns you. He controls you. And Leonard recognized this. And I think, one thing, U.S. Navy officers, they really underestimated Leonard. And this is part to do with his girth, right? He was this big guy. He was this jolly guy. He was Malaysian but he had an Anglo name, and he talked like an American. He wore American flag ties. He sounded very patriotic. So they never saw him as a potential threat until it was far too late. And this was a real secret to his success.

DAVIES: You know, it's interesting because we've been talking about how this contractor, Leonard Francis, entertained officers on a lot of ships, and as a result were able to overcharge for services provided to those ships. But this really went far beyond this, right? He actually got so embedded in command levels of the Navy that he was able to influence which ships went to which ports, get advance notice of when they would be coming to which ports, which was very helpful, right? This is pretty remarkable.

WHITLOCK: It is. And while there's a lot of sordid nature of this scandal in terms of the bribes and the sex, you can't lose sight of the fact that Leonard also became a pervasive threat to national security. And he did this because he wanted to get classified ship schedules. He wanted to know months or even years in advance which ships were scheduled to go to which ports. This would enable him to preposition his barges and tugboats and workforce to - more efficiently. He'd make a lot more money if he knew where Navy ships and submarines were going months in advance.

But this information was classified. This was carefully guarded by the U.S. Navy for obvious reasons. They didn't want to telegraph to hostile forces or terrorist groups where it ships were going. They didn't want to put them at increased risk of attack. So even Navy sailors, their families back home aren't allowed to know what ports they're going to when until maybe a few days or a couple of weeks beforehand. So Leonard really hungered for this information because it could make his company very, very profitable if he had this advance notice of where the ships were going.

So over time, he was able to cultivate 10 different U.S. Navy officers to leak him military secrets in the form of these classified ship schedules. And for seven years straight, he had people in the 7th Fleet in Asia leaking him this classified information. And this gave him an enormous leg up to be able to overcharge the Navy and preposition his equipment. But this was also, of course, classified information. And if he had given this to a hostile power, such as Russia or China, it would've put U.S. crews at real risk of attack. And once the U.S. Navy and the Justice Department discovered when they were investigating Leonard that he had classified information, this flipped them out. This went from just being a fraud case, a bribery case, to one that had real national security implications.

And to this day, people in the Justice Department and NCIS don't really know what happened to all that classified information. And Leonard would keep it unprotected on his computer servers. He told federal investigators that he did not sell any of it to the Chinese. But he also acknowledged that the Chinese military kept a keen interest in his business and that his IT guy, the guy who kept his computer servers, played golf regularly with the Chinese defense attache in Singapore. So this was not securely held information. And you almost have to assume that other governments did get their hands on it from Leonard, even if it was indirectly.

DAVIES: In addition, you know, he was always concerned about investigations into his deeds, particularly as the years wore on. And there were, you know, some inquiries by the National Criminal Investigation Service - the NCIS. He had somebody on the inside there, didn't he?

WHITLOCK: He had several. He was buddies with a number of NCIS agents who, you know, he would trade information. Now, not all of them were taking bribes. There were two in particular who were taking bribes who had worked in the 7th Fleet area. But he was a raconteur, and he was always trading information. NCIS agents wanted to know what his intel was about what was going on in different ports. And again, the NCIS had agents on every ship, every U.S. Navy ship, particularly the aircraft carriers. They had agents in most of the ports in Asia. So they were a pervasive law enforcement presence and counterintelligence presence. But Leonard, again, he didn't shy away from them, if anything that attracted him to them more.

And he did. He recruited two NCIS agents in particular, one who was a special agent of the year, to leak Leonard internal law enforcement files. So every time NCIS would open an investigation into Leonard's company, this agent would leak him the files, the witness statements, the interview notes. So Leonard was always able to stay a step ahead. It's really shocking that over the years, NCIS opened more than two dozen criminal investigations into Leonard's company and closed each one of them down over a period of 15 years or so because Leonard was always able to stay a step ahead or they just didn't take it that seriously. They didn't want to jeopardize their relationship with this Malaysian contractor who, frankly, did have a lot of good intel for them on what was going on in that part of the world.

DAVIES: We're going to take a break here. Let me reintroduce you. We are speaking with Craig Whitlock. He is an investigative reporter for The Washington Post. His new book is "Fat Leonard: How One Man Bribed, Bilked, And Seduced The U.S. Navy." We'll continue our conversation after this short break. This is FRESH AIR.

(SOUNDBITE OF JULIAN LAGE'S "IOWA TAKEN")

DAVIES: This is FRESH AIR, and we're speaking with Craig Whitlock. He's an investigative reporter for The Washington Post. He has a new book about a scandal in the U.S. Navy, in which a Malaysian businessman who provided services to Navy ships in Asian ports wined and dined senior officers in the Navy and overcharged taxpayers for years. The book is called "Fat Leonard: How One Man Bribed, Bilked, And Seduced The U.S. Navy."

So Leonard Francis managed to get away with this for years, you know, throwing these parties for people and building these relationships and paying bribes and making a fortune, and was pretty confident that he could use his influence to avoid accountability. What finally broke his string and sparked an investigation with some teeth to it?

WHITLOCK: There were finally two NCIS investigations into reported fraud of Leonard's company that started to gain some traction - two very clear examples of Leonard just making up charges and hoping the Navy would pay for it. It was really naked fraud. And so the agents started gathering string on this, and it was taking them a while. It really took them three years to finally bring enough evidence that they felt they had a good enough case to indict Leonard. But then the question is, what do you do with him? You know, a lot of these countries in Southeast Asia either didn't have extradition treaties with the U.S., or Leonard had so much influence over there, the Navy was afraid that Leonard would buy off people to prevent him from being handed over to the U.S. justice system. So they cooked up a plan to lure him to the United States so they could arrest him on U.S. soil. And that's what finally did him in in 2013.

DAVIES: Right. They managed to lure him to a meeting in San Diego where he thought he was going to do more influence peddling. And he's, in fact, tackled and arrested simultaneously with a bunch of other Navy personnel who were part of this ring. There was a bunch of arrests. And by the way, this is beautifully described in the book. And particularly you describe all the interviews of how these Navy personnel are confronted. And they began by saying, oh, it was nothing, and lying. And then information is presented which is more threatening to them. It's interesting reading. But after a couple of weeks in jail in San Diego, Leonard and his lawyers realize that he's in a lot of trouble. And because he has kept all these meticulous records for years, he can help the government if they give him a cooperation agreement and some leniency. And so he sits down with what's called a proffer. That's one of these legal arrangements in which a criminal defendant will sit down with prosecutors and say, I will tell you - this is going to be off the record, but I will tell you what kind of information I can provide if we have an agreement. And when Leonard does this, boy, is it an eye-opener. And he spends two full days telling prosecutors a lot of what he knows that they didn't know. What was the effect of this on the investigators and prosecutors in the case?

WHITLOCK: Well, in legal terms or description, it's just like pouring gasoline on the fire. At that point, the Justice Department and NCIS - they knew Leonard was buddies with a lot of people in the U.S. Navy. They knew he had bribed some. They had already put out arrest warrants for a handful of people, but they didn't know how far it went. They didn't know how many years back he had been doing this. They didn't know how many people had been leaking him classified information. So when the Justice Department invites Leonard in for this proffer session to see if they can cut a deal, if they can talk about making some kind of plea bargain arrangement, depending on how valuable Leonard's information is, he really blows them away, and he starts telling stories about not just his parties and his friends in the Navy and who did what, but he starts blabbing the names of very high-ranking naval officers. He tells them that he had provided prostitutes to the director, the chief of Navy intelligence. He talks about his relationship with the commander of all U.S. military forces in the Pacific, his friend, the superintendent of the Naval Academy.

So immediately this case goes from a few Navy officers being under investigation for bribery to, oh, my God, this guy compromised the leadership line of the U.S. Navy. How bad is this going to get? So from that point forward, the whole scope and scale of this already large investigation just became something else entirely, to the extent that neither the Navy nor the Justice Department had ever seen a case like this before. And Leonard is - as he put it, he's singing like a canary if he can cut a deal because he had kept all these receipts. He had kept the hotel records, the emails, the Christmas cards, the menus that people had signed as gifts to him. He had kept it all. And he gave NCIS and the federal government a taste of it to see if they would cut a deal with him.

DAVIES: Right. You say in the book that prosecutors were starting to realize that their case could paralyze the Navy's chain of command, it was that big.

WHITLOCK: It was that big. And the Navy's scrambling to find out. And you have this other element that NCIS, which is a federal law enforcement agency that's part of the Department of the Navy - their leadership doesn't know who they can tell about all this. They had confided in a very small number of individuals, including the Secretary of the Navy, who is a civilian boss of the whole department. But they didn't want to tell any admirals because they knew Leonard was friends with so many. They were worried that word would get out. People would cover things up. They would hide the trail of their interactions with Leonard. So they had to keep this a secret internally as well. They didn't know whom to trust. And for years, you had to be - only a select number of people within the Navy could be read into this investigation.

So word spread that Leonard had been arrested. People started to panic 'cause they didn't know at the Pentagon or at Navy bases throughout the world who might come under investigation. And there was this real fear that gripped the uniform ranks of the Navy. Anybody who had encounters with Leonard were always wondering for years, am I going to be under investigation? Am I next? People didn't know if there was going to be a knock at the door or a call from NCIS. And really, NCIS and the Justice Department had to keep this under wraps for years to come because they didn't know how high it reached into the ranks.

DAVIES: We need to take a break here. Let me reintroduce you. We are speaking with Craig Whitlock. He's an investigative reporter for The Washington Post. His new book is "Fat Leonard: How One Man Bribed, Bilked, And Seduced The U.S. Navy." We'll continue our conversation in just a moment. This is FRESH AIR.

(SOUNDBITE OF JAY-Z SONG, "'03 BONNIE AND CLYDE FT. BEYONCE KNOWLES")

DAVIES: This is FRESH AIR, and we're speaking with Washington Post investigative reporter Craig Whitlock. His new book is about an embarrassing scandal in the U.S. Navy involving a Malaysian businessman who gave perks and bribes to senior Navy commanders and, in return, overcharged the government for his services. The book is called "Fat Leonard."

Leonard's personal journey gets pretty crazy. I mean, he agrees to cooperate, and then he gets mad because they're still keeping him in jail while he's providing all this information and then stops cooperating and then eventually reaches an agreement, gets a lot of special privileges and then somehow manages to escape to Mexico, gets to Venezuela and then eventually is taken back to the United States in a prisoner exchange. When this is all done, broadly speaking, how many Navy officers were tainted by this investigation?

WHITLOCK: So there were nearly 1,000 individuals who were investigated or questioned by the Justice Department and NCIS over a period of several years. Now, of that - that's a big number. Of those, 90 were admirals. So fully 90 admirals retired in active duty in the U.S. Navy were investigated or questioned about their ties to Leonard Francis over the years and whether they accepted gifts or bribes. Only a small number were prosecuted. The Justice Department brought charges against 35 people. They got guilty pleas from 29 of them, although some of them would later fall apart. But that's a pretty big case. In addition to that, the U.S. Navy did its own reviews under military disciplinary laws and military justice laws, and they court martialed about another half-dozen people. They censured a number of high-ranking officers and admirals, but the vast majority of them - frankly, they got away with it.

The Navy kept its disciplinary rules confidential. It did not disclose this information even though its own regulations stated that they should make it public. If a senior officer is found to have committed misconduct, that's something - under its own rules, it's supposed to be public. And I had to fight tooth and claw to get information about certain cases. The Navy just didn't want to disclose it because it was too embarrassing. So to this day, it's still unclear how many of the thousand people who are investigation - how many of them got in trouble even if it was just a memo or a slap on the wrist. The Navy hasn't been transparent about how it handled any of those cases.

DAVIES: And even some of those who were convicted at trial or pled guilty - in a number of those cases, the convictions were undermined by prosecutorial misconduct. You want to explain that?

WHITLOCK: Yeah. So the Justice Department was sort of beating its chest for a number of years about how many convictions it had been able to obtain. It had gotten 29 people, including Leonard Francis, to plead guilty, to admit guilt. But then there was a - there were five defendants who were holding out, who had been indicted in a major case with bribery and conspiracy charges. Some of them had allegedly leaked Leonard classified information. And so there was a big trial in San Diego in federal court in 2022, and the jury convicted four of the five officers of bribery charges. And it looked like they were going to go to jail for a long time. They had rolled the dice and lost at trial, but it quickly emerged that the prosecution had not been forthcoming with all its evidence. There was some exculpatory evidence or information that was favorable to the defense that it had failed to turn over, at least in time.

And this is a big no-no in legal circles - that if the prosecution has any information that would be beneficial to the defense and they know about it, they're obligated under the law to provide it. And the Justice Department attorneys at this trial had hidden some witness statements, had hidden the fact of how Leonard had been afforded all these cushy privileges when he was supposed to be a federal prisoner. They didn't disclose things under the law they were required to.

So in the end, the judge had to vacate those four felony convictions at trial and let these people plead guilty instead to misdemeanors with no time served in jail. The problem is that that prosecutorial misconduct really ended up tainting the entire case. So even though you had all these other people - 29 people who had pleaded guilty - they started saying, hey. You know, you're letting those guys off the hook. How did this affect my case? I wouldn't have pleaded guilty if I known there is this kind of legal hanky-panky going on.

So just this week the federal judge in San Diego who is overseeing this whole case dismissed the felony convictions of five more officers who had admitted to taking bribes from Leonard. And undoubtedly, there will be more cases that will unravel because of this. And the big question is, how will it affect Leonard Francis himself? You know, this is a guy who confessed and admitted and pleaded guilty to bribing scores of Navy officers. But the question is, will they have to let him go, too? And this is something we just don't know at this point. But as hard as it is to get our minds around it, the fact is Leonard, in the end, may get away with it.

DAVIES: Wow. Now, what is his status today? He's in prison in the United States, right?

WHITLOCK: That's right. So he - again, another mind-blowing episode. Leonard was this great con man. He not only conned the Navy, but even after his arrest, he slowly conned the Justice Department and a federal judge into thinking that he was dying. And he was sick. He did have cancer, kidney cancer. But he convinced a judge to give him a medical furlough to let him out of jail so he could receive treatment. And under this ridiculous arrangement, he was allowed to provide his own security guards, and he was held under federal house arrest. But one day he decided he was going to escape in 2022. And he sliced off his ankle bracelet, called an Uber and headed to Mexico and ended up in Venezuela.

So this, you know, most wanted criminal, notorious criminal - you know, people throughout the world had heard about Fat Leonard - he still manages to escape. About a year later, he was finally returned to the United States by the government of Venezuela and in a prisoner swap that was orchestrated by the White House. But so he's now in jail in San Diego. But there's a real prospect that they may have to let him go again because of this prosecutorial misconduct.

DAVIES: Did you hear from people in the Navy or family members about this as you reported it?

WHITLOCK: So people in the Navy, the ones who didn't get in trouble, are outraged by it. You know, they are really angry that there were 10 U.S. Navy officers who leaked classified information to Leonard Francis, a foreign citizen of Malaysia - what they see as traitorous behavior by a large number of officers, particularly senior officers. And people are really angry at how, in the end, very few of them are being held to account. At the same time, I think there is an acknowledgement that the Navy in particular had a real cultural problem, a real ethical problem that in public, the Navy's reputation is pristine. And yet behind closed doors, halfway around the world, they were acting in a completely different manner compared to their public reputation. And I think this episode is doing real damage to public faith in their ability to carry out their duties.

DAVIES: And are you aware of any steps the Navy is taking to deal with this culture?

WHITLOCK: No, and in fact, I had a very sobering conversation with a four-star admiral at the Pentagon several years ago when I was working on this book and pushing to get documentation on senior officers who had been found guilty of misconduct. And the Navy was digging in its heels. And this four-star admiral told me, you know, what metric exists that says this will benefit the Navy if I give you that information? And I was pretty appalled. I was like, well, you know, it's the right thing to do. And your own regulations state that this information should be made public. The Navy is supposed to be transparent about misconduct by senior officers. Its own regulations state you should make that public.

And he was unmoved. He said, well, why should I throw our people under a bus? This is so embarrassing. It's going to embarrass our people and it's going to damage our reputation. So clearly, a decision had been made at the highest levels of the Navy that they were going to bury this story and hope the storm blew over. And that's really still the approach it's taken is it doesn't give interviews. It doesn't disclose documents. It just is hoping this will eventually blow over. It's decided that if it acknowledged it or talked about it that maybe this would be even more damaging than people knew. So that's its calculus at this point.

DAVIES: Well, Craig Whitlock, thank you for your reporting and thanks for speaking with us.

WHITLOCK: Thanks so much for having me, Dave.

DAVIES: Craig Whitlock is an investigative reporter for The Washington Post. His new book is "Fat Leonard: How One Man Bribed, Bilked, And Seduced The U.S. Navy." To catch up on interviews you've missed - like our conversation with Michael McDonald, known for his songs with the Doobie Brothers and his solo career, or with Kristen Wiig, the former cast member of "Saturday Night Live" and star of "Bridesmaids" - check out our podcast. You'll find lots of FRESH AIR interviews. And to find out what's happening behind the scenes of our show and get our producers' recommendations for what to watch, read and listen to, subscribe to our free newsletter at whyy.org/freshair.

(SOUNDBITE OF RON RIEDER'S "UN COCO LOCO")

DAVIES: Our interviews and reviews are produced and edited by Amy Salit, Phyllis Myers, Roberta Shorrock, Ann Marie Baldonado, Sam Briger, Lauren Krenzel, Therese Madden, Susan Nyakundi and Joel Wolfram. Our digital media producer is Molly Seavy-Nesper. Our technical director and engineer is Audrey Bentham. Thea Chaloner directed today's show. For Terry Gross and Tonya Mosley, I'm Dave Davies.

(SOUNDBITE OF RON RIEDER'S "UN COCO LOCO") Transcript provided by NPR, Copyright NPR.

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Dave Davies is a guest host for NPR's Fresh Air with Terry Gross.