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Navy officers convicted of corruption in ‘Fat Leonard’ scandal haven’t lost their pensions

The Washington Post logo The Washington Post 19/03/2017 Craig Whitlock
Rear Adm. Robert Gilbeau enters the federal courthouse in San Diego on June 9. Gilbeau is accompanied by Bella, a little white dog that Navy officials say was serving as a therapy animal to treat his post-traumatic stress. © Lenny Ignelzi/AP Rear Adm. Robert Gilbeau enters the federal courthouse in San Diego on June 9. Gilbeau is accompanied by Bella, a little white dog that Navy officials say was serving as a therapy animal to treat his post-traumatic stress.

Robert Gilbeau is in a heap of legal trouble. In June, he became the first active-duty Navy admiral in modern history to be convicted of a felony. Next month, he faces sentencing and could land in federal prison for up to five years.

Yet the disgraced 56-year-old officer can count on one thing: a military pension that pays him about $10,000 a month. He collected his first check last fall.

Gilbeau is one of seven current or former Navy officers who have pleaded guilty in an epic corruption and bribery scandal but are still eligible for generous retirement benefits, courtesy of U.S. taxpayers.

The Navy has yet to make a final determination on how much the other convicted officers will receive.

How the Navy decides to act could have repercussions for dozens of others who remain under investigation for their entanglements with Leonard Glenn Francis, a Singapore-based defense contractor who resupplied U.S. warships in Asia for a quarter-century.

Known as “Fat Leonard” for his 350-pound physique, Francis has pleaded guilty to bribing “scores” of Navy officials over a decade with prostitutes, cash, hedonistic parties and other gifts. In exchange, according to federal prosecutors, the officials provided Francis with classified or inside information that enabled his firm, Glenn Marine Defense Asia, to gouge the Navy out of tens of millions of dollars.

Twenty-seven people have been charged with crimes since the investigation became public in 2013, including eight Navy officers indicted this month. Authorities say the case is still unfolding and that more than 200 people — including 30 admirals — have come under scrutiny.

Navy officials declined to comment on specific cases but said they are reviewing conditions of discharge, including potential retirement benefits, for those convicted in the investigation.

“These are serious matters, and the Navy engages in the diligence demanded in considering each case individually,” said Capt. Amy Derrick, a Navy spokeswoman at the Pentagon.

Retirement perks for veterans can be substantial. Troops qualify for pensions after 20 years of service; annual payouts can exceed $150,000 for generals and admirals. Military retirees are also entitled to heavily subsidized health insurance.

Traditionally, the armed forces have been reluctant to eliminate benefits for felons, according to experts on military law. They said the services view pensions as sacrosanct partly because they don’t want to penalize spouses or other family members who made their own sacrifices for the military.

Military personnel found guilty of serious misconduct are usually demoted and forced to retire. Because pension values are based on rank, losing a star or a stripe leads to a partial reduction in retirement income.

In exceptionally rare cases, military officers who are sentenced to prison or classified as deserters can be “dropped from the rolls” — the harshest category of discharge — and their rank, privileges and benefits erased completely.

Over the past decade, the Navy has dropped just four reserve officers from the rolls. Among them were a murderer, a drug dealer and a child pornographer.

But Gary R. Myers, a New Hampshire-based military defense attorney, said the Navy would probably consider applying the unusual punishment to officers convicted in the Fat Leonard scandal, given their abuse of the public trust.

“It would be a response to the egregious nature of what was done and the breach of faith with the American people by Navy personnel,” Myers said. “This is a monumental embarrassment to the Navy, and the Navy does not like to be embarrassed.”

David P. Sheldon, a defense attorney from Washington, said there are few guidelines for when the penalty should be imposed. He once represented a Marine major who was dropped from the rolls for a comparatively mild crime: concealing financial transactions.

“The bottom line is it’s very, very rare, but it’s really up to their discretion,” Sheldon said of the military leadership. “You have officers who have committed very, very serious misconduct but are not dropped from the rolls.”

Derrick, the Navy spokeswoman, declined to say whether the Navy was considering dropping officers from the rolls for their connections to Fat Leonard. She said she would not comment on “internal decision-making and deliberative processes.”

Defense attorneys for some of the convicted officers complained that the Navy is dragging its feet.

Four officers who pleaded guilty last year are serving time in federal prison but still haven’t been formally discharged from the military. The Navy has stopped paying their regular salaries while they are behind bars, but the fate of their retirement benefits remains up in the air.

“I don’t think they themselves know what they are going to do,” said Robert Schlein, a San Diego lawyer who represents Lt. Cmdr. Gentry Debord, a 41-year-old supply officer convicted of taking bribes and prostitutes. “I get the feeling that the Navy is just letting them sit and stew.”

Debord pleaded guilty in October. He blamed his addiction to sex for agreeing to serve as a mole for Francis. He was sentenced to 30 months confinement in January and reported to prison last month.

Given his rank and 21 years of service, Debord would be eligible for a pension that would pay him about $4,000 a month. His lawyer said he expects that Debord will be demoted and collect somewhat less, but that the Navy hasn’t tipped its hand.

Another officer who pleaded guilty last year, Cmdr. Michael Misiewicz, stands to collect a pension of about $6,200 a month, or $74,400 annually, based on his rank and 27 years of service. But the Navy has not settled his case, either, even though he reported to federal prison in August.

“We have no idea why the process of separation and pension determination has taken so long and been so messy,” said his attorney, Mark Adams of San Diego.

Misiewicz, a 49-year-old graduate of the U.S. Naval Academy, admitted to leaking classified information to Francis for cash, luxury hotel stays, airfare and prostitutes, as well as tickets to a Lady Gaga concert in Thailand.

Besides handing down a 6½-year prison sentence, a federal judge ordered Misiewicz to pay $195,000 in fines and restitution.

Military legal experts said the Navy may be waiting until any potential criminal appeals from the officers are finalized. Under the law, officers can be dropped from the rolls only after all appeals are exhausted — a process that could take years.

Theoretically, the Navy could also try to invoke the Hiss Act, a 1954 law passed by Congress that denies retirement benefits to federal officials convicted of disloyalty, bribery, graft and similar offenses.

The law was triggered by the case of Alger Hiss, the U.S. diplomat convicted of perjury and accused of passing state secrets to a Soviet agent. Congress later amended the law, and it is now limited to crimes related to national security, including espionage and treason.

Legal experts said it was unclear whether the Hiss Act could be applied in the Fat Leonard scandal. While several Navy officials have admitted to giving classified information to Francis, they were convicted of more general crimes, such as bribery and conspiracy.

The Navy could also try to discipline or levy financial penalties on retired officers who have pleaded guilty to crimes committed while they were on active duty.

Under military law, retired officers remain subject to the Uniform Code of Military Justice and can be called back to face court-martial, demotion or other forms of punishment. While such cases are rare, experts said the circumstances could apply to 11 retired officers who have been convicted or are facing charges in the Glenn Defense investigation.

One example is Michael George Brooks, a captain who has been collecting a pension since he retired in 2011.

In November, Brooks pleaded guilty to taking bribes from Glenn Defense a decade ago when he served as U.S. naval attache in the Philippines.

Derrick, the Navy spokeswoman, said the service will not take any potential action against Brooks until after he is sentenced in federal court. A hearing is scheduled for June. Brooks’s attorneys did not respond to requests for comment.

Similarly, the Navy could take additional action against Gilbeau, the admiral who pleaded guilty last year.

Two senior Navy officials, who spoke on the condition of anonymity to discuss internal deliberations, said then-Navy Secretary Ray Mabus considered dropping Gilbeau from the rolls after his conviction last year. But the officials said Mabus was advised by Navy lawyers to wait and see if Gilbeau was sentenced to prison.

Gilbeau’s sentencing has since been postponed three times; his lawyers have said in court filings that he is recovering from back surgery. A hearing is scheduled for next month.

In his plea deal, Gilbeau admitted to lying to investigators about his contacts with Francis and concealing the nature of their relationship. He agreed to pay $150,000 in fines and restitution.

Prosecutors have said they will reveal more about Gilbeau’s misconduct at his sentencing. They have indicated they will seek between 12 and 18 months of prison.

Gilbeau’s attorney, David Benowitz, has said he will ask a judge to spare Gilbeau time behind bars. He did not respond to requests for comment for this article.

When Gilbeau appeared in federal court in San Diego to plead guilty last year, he carried a little white dog, named Bella, who was wearing a vest with “Navy” emblazoned on it. Navy officials said the pooch was a therapy animal to treat Gilbeau for post-traumatic stress.

Navy officials said that, unlike other officers convicted in the case, Gilbeau was allowed to retire in October because he had filed papers to leave the service years ago as part of a disability claim.

The Navy granted the request, but not before demoting him from rear admiral to captain. As an officer with 33 years of service, that reduced his pension by about $1,000 a month, according to Defense Department retirement data.

The Navy also slapped him with an “other than honorable” discharge — a black mark on his military record, according to documents obtained under the Freedom of Information Act.

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