Congress looks at Navy contracting practices

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Associated Press

Posted on January 31, 2014 at 4:32 PM

Updated Friday, Jan 31 at 7:01 PM

SAN DIEGO (AP) — The House Oversight Committee is looking into Navy contracting practices amid a widening federal probe into a multimillion-dollar bribery scheme involving a Singapore-based defense contractor accused of offering prostitution services and pricey vacations to Navy officers.

Rep. Darrell Issa's office said Friday that Navy Secretary Ray Mabus is expected next week to brief the committee, which the California Republican chairs.

In a Jan. 28 letter sent to Mabus, Issa asked for copies of contracts between the Navy and defense contractor Leonard Glenn Francis, since 2009. He also requested the Navy's total expenditures on port services — food, fuel, etc. — for the last five fiscal years.

Francis was arrested in September in San Diego and has pleaded not guilty in the case that alleges his company, Glenn Defense Marine Asia Ltd., or GDMA, overbilled the Navy by at least $20 million for port services. So far, six naval officers have been implicated in the bribery scheme, including three who have been arrested.

GDMA has serviced Navy ships for 25 years. The probe involves activities from 2009 to present.

Issa said in his letter that the scandal is one of a string of cases involving Navy contracts.

"This trend of contracting fraud and mismanagement call for closer scrutiny of the Navy's contracting practices and oversight," Issa wrote.

Mabus has warned more disclosures in the case are coming and called for a review of all port service contracts.

Issa is concerned that falls short, saying three years after the Navy created a special panel to improve contracting oversight, problems remain and "it does not appear the process has improved significantly."

Mabus said he is happy to discuss.

"I'm proud of the work that the Naval Criminal Investigative Service has done to ferret out the alleged fraud and corruption carried out by GDMA and of the action our leaders have taken to strengthen our acquisition integrity and oversight processes," he said in a statement.

An agent with the NCIS, John Beliveau II, pleaded guilty in December to bribery charges. Officials have said his plea deal could expand the investigation if he cooperates with authorities.

Navy Cmdr. Jose Luis Sanchez and Cmdr. Michael Vannak Khem Misiewicz have entered not guilty pleas to bribery charges. In addition, two Navy admirals have lost their security clearances and two other Navy officials have been relieved, but they have not been charged.

Francis' cousin, Alex Wisidagama, a company manager who was also arrested, has pleaded not guilty in the case.

GDMA continued to get contracts even after the company was under investigation. Mabus has said information about the probe was kept to a few people and allowed authorities to collect more information and then leak a false report that enabled them to ultimately arrest Francis.

He said that, since 2009, Navy has suspended 252 contractors and prohibited another 400 from doing business with the Navy.

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