US admiral arrested for Phl sexcapade

MANILA, Philippines -  A sex party in the MacArthur Suite of the Manila Hotel was one of the ostentatious perks used by a defense contractor to bribe a US Navy admiral and eight other current and former military officers who allegedly even used memorabilia of Gen. Douglas MacArthur for sex acts with prostitutes, according to reports yesterday.

Details of the alleged bribery were contained in an indictment unsealed this week by the US Justice Department in a burgeoning scandal involving Malaysian defense contractor Leonard Francis, nicknamed Fat Leonard, the reports said.

The US embassy in Manila declined to comment on the report, while Defense Secretary Delfin Lorenzana said such scandal will never happen under the Duterte administration. Lorenzana made the remarks on the sidelines of the celebration of the 70th founding anniversary of the Joint US Military Assistance Group (JUSMAG), during which he was conferred the Maj. Albert Jones Award.

The Manila Hotel party hosted by Leonard for officers of the USS Blue Ridge happened in February 2007 during a port visit.

“Historical memorabilia related to General Douglas MacArthur were used by the participants in sexual acts,” according to the indictment. It did not specify which of MacArthur’s memorabilia was involved.

In a related report by the Washington Post quoting the indictment, five of the officers attended a “raging multi-day party, with a rotating carousel of prostitutes,” at the Shangri-La Hotel in Makati City where they consumed the hotel’s entire supply of Dom Pérignon and rang up more than $50,000 in expenses fully shouldered by Francis.

The wild party happened during Blue Ridge’s port visit to Manila in May 2008.

A suite at the penthouse of the old section of the Manila Hotel was MacArthur’s official residence before World War II. The hotel remained generally intact after the fierce Battle for Manila in February 1945.

Retired admiral Bruce Loveless, 53, and the others have been accused of accepting the services of sex workers and other bribes from Francis in exchange for classified information that helped his company, Glenn Defense Marine Asia, the Guardian report said.

Francis is also accused of paying for meals that cost as much as $12,000 and included foie gras, ox tail soup, expensive wine and cigars worth $2,000 a box.

Prosecutors say the defendants called themselves the Lion’s King Harem, Brotherhood, Wolfpack and other names as they worked to recruit others for the scheme. They were accused of using fake names and foreign email service providers to cover their tracks.

Prosecutors say Francis, whose nickname comes from his wide girth, cheated the navy out of nearly $35 million – largely by overcharging for his company’s services stocking navy ships in the Pacific with food, water, fuel and other supplies.

Navy officers provided classified information to Francis that helped him beat the competition and in some instances commanders steered ships to ports in the Pacific where his company could charge fake tariffs and fees, prosecutors said.

It was the latest indictment in the three-year-old case that produced charges against more than 20 former or current navy officials and marks one of the worst navy corruption scandals in history, the Guardian report said. Loveless is the second admiral charged in the case. It is extremely rare for an admiral to face criminal proceedings.

 Damage control

Admiral John Richardson, the navy’s top officer, vowed to repair damage caused by the scandal.

“This behavior is inconsistent with our standards and the expectations the nation has for us as military professionals,” he said. “It damages the trust that the nation places in us, and is an embarrassment to the navy.”

Loveless made no substantive comments during a brief hearing hours after his arrest at his Coronado home near San Diego. He did not yet have an attorney. Magistrate Judge Mitchell Dembin entered a not guilty plea on his behalf and ordered him released without bail.

In the military, Loveless was responsible for collecting foreign intelligence for the navy’s Seventh Fleet, Patrick Hovakimian, an assistant US attorney, told the judge.

“Far from doing that, over the course of many years this defendant participated in wild sex parties,” Hovakimian said. “He has shown callous disregard for his duties.”

The judge also entered a not guilty plea on behalf of Enrico de Guzman, a former marine colonel, and allowed him to remain free. His attorney didn’t immediately respond to a request for comment from the Guardian.

Five defendants were arrested on Tuesday in Texas, Pennsylvania, Florida, Colorado and Virginia. None had attorneys listed in court documents.

“This is a fleecing and betrayal of the United States Navy in epic proportions, and it was allegedly carried out by the navy’s highest-ranking officers,” said acting US attorney Alana Robinson.

“The alleged conduct amounts to a staggering degree of corruption by the most prominent leaders of the Seventh Fleet – the largest fleet in the US navy – actively working together as a team to trade secrets for sex, serving the interests of a greedy foreign defense contractor, and not those of their own country,” she added. Francis has pleaded guilty to fraud and is awaiting sentencing.

Twenty of the defendants are current or former US navy officials and five are executives of the Singapore-based company of Francis.

To date 13 have pleaded guilty, including another admiral, Robert Gilbeau, who was convicted last June and is believed to be the first active-duty naval flag officer charged in federal court.

Gilbeau, a one-star admiral, pleaded guilty to making false statements to investigators about his contacts with Francis.

Navy officials have said that about 30 admirals are under investigation, although only a handful have been named publicly.

Gilbeau has since retired and is scheduled for sentencing next month in federal court.

Separately, the Navy has censured or disciplined three admirals for ethics violations after they accepted lavish meals and other gifts from Francis.

Taken into custody Tuesday included David Newland, 60, a retired captain from San Antonio; James Dolan, 58, a retired captain from Gettysburg, Pennsylvania; David Lausman, a retired captain from The Villages, Florida; and Donald Hornbeck, a retired captain who lives in Britain.

Master manipulator

Over time, the investigation has revealed the ease with which the 6-foot-3-inch, 350-pound Leonard was able to penetrate the senior ranks of the 7th Fleet and recruit moles to work on his behalf, the Washington Post said.

Court papers portray Francis as a master manipulator who persuaded navy officials to feed him classified information about ship movements and confidential contract information that he used to undercut his competitors.

Corrupt navy personnel have also pleaded guilty to leaking Francis sensitive law enforcement files that he exploited for years to thwart dozens of failed criminal investigations into his company.

Despite rising signs of widespread fraud, the navy kept awarding business to Francis’ company to resupply its ships and submarines throughout Asia.

In 2011, Glenn Defense won deals valued at $200 million to service US vessels at ports stretching from the Russian Far East to Australia. The contracts were canceled after Francis’ arrest in 2013.

While Francis was already legendary within the navy for his hedonistic parties, the indictment unsealed Tuesday provided fresh details of how senior officers with the 7th Fleet allegedly became accustomed to living the high life at ports throughout Asia, at Francis’ expense.

In February 2007, for example, Francis splurged for $50,000 worth of shopping, dining and luxury hotel rooms for Newland, De Guzman and others during a port visit to Singapore, the Washington Post said, citing statements from prosecutors.

The following month, in Tokyo, the defense contractor allegedly took Newland, De Guzman, Hornbeck and others to the luxurious Oak Door restaurant, according to the indictment. The meal included foie gras, lobster thermidor, Sendai tenderloin, cognac and cigars.

For dessert: the “Liberte Sauvage,” the winning cake at the Coupe du Monde de la Patisserie, a prestigious international baking contest.

During a four-day visit by the Blue Ridge to Hong Kong in January 2008, Francis also provided rooms for Dolan, Hornbeck, Loveless and Shedd at the J.W. Marriott hotel at a price of $626 per night.

Then he took all of them – plus Lausman – out for an extravagant dinner in a private room at the Petrus Restaurant overlooking Hong Kong harbor, according to the indictment.

That eight-course meal featured black truffle soup, rock lobster salad, osetra caviar, pan-seared duck liver with pear and sunchoke, Dover sole, grilled Wagyu beef tenderloin, fine cheeses and baked Alaska for dessert, the Washington Post said quoting court papers.

Each course was paired with wine or champagne. The total bill: $18,371.

Afterward Hornbeck, who at the time served as the 7th Fleet’s deputy chief of staff for operations, emailed Francis a thank-you note, according to the indictment.

“The food, music and wine were wonderful,” he wrote.

Hornbeck, who was preparing to retire from the Navy, also sounded out Francis to see if he might be willing to hire him. “If you are still considering opening an office in San Diego in the near future, I would very much be interested in being a part of that,” he wrote.

The job never materialized. But court papers show that Francis showered the Navy captain with other gifts, including $13,000 to pay for a culinary internship for a relative of Hornbeck’s at the Chalet Suisse restaurant in Kuala Lumpur, Malaysia. With Marichu Villanueva