Fugitive defense contractor returned to U.S. in prisoner swap with Venezuela

Amna Nawaz:

Yesterday, the U.S. agreed to release a close ally of Venezuelan President Nicolas Maduro who had been charged with conspiracy to commit money laundering. And, in exchange, Venezuela released 10 Americans and sent the U.S. one fugitive.

That fugitive is Leonard Glenn Francis, whose nickname is Fat Leonard. He was a defense contractor at the center of a huge scandal within the U.S. Navy. More than 700 military personnel were investigated, and several lost their jobs.

So, who is Leonard Glenn Francis, and what did he do?

For that, we turn to Washington Post reporter Craig Whitlock, who has covered this story extensively. He's also coming out with the book next spring entitled "Fat Leonard: "The Con Who Corrupted the U.S. Navy."

Craig Whitlock, welcome back to the "NewsHour." Thanks for joining us.

Craig Whitlock, The Washington Post:

Thanks for having me.

Amna Nawaz:

So you have been writing this book about this man. What did you think when you learned that he was part of this prisoner swap between the U.S. and Venezuela yesterday?

Craig Whitlock:

Well, we had known he was a bargaining chip being held by Venezuelan officials for more than a year now.

He was arrested in Caracas in September 22 on an Interpol red notice a couple weeks after he flew the coop from U.S. custody in San Diego. He escaped from San Diego in home detention to Mexico, then Cuba, then Venezuela, looking for a place where he could hide out from U.S. authorities in a country that was hostile to Washington.

And, in fact, Washington does not have diplomatic relations with Venezuela, so he thought that was a safe place. But, in fact, Venezuelan officials saw him as a bargaining chip they could use to win release of this diplomat that was in U.S. custody in Miami. And that's what happened in the end.

Amna Nawaz:

There's so many fascinating details I want to dig into a little bit more, but let's just start with, who is this man?

Why is he someone that the U.S. wanted back on U.S. soil so badly?

Craig Whitlock:

So, Leonard Francis is 59 years old. He's a Malaysian citizen. He was the owner of a very large defense contracting company based in Singapore called Glenn Defense Marine Asia.

And over a quarter-of-a-century, he essentially cornered the market on resupplying U.S. warships every time they visited ports in Asia. So, any time a U.S. ship or sub visited a port that wasn't a U.S. military base, such as they went to Hong Kong or Singapore or Sydney or you name it, Francis' company resupplied, refueled these ships in ports.

They offered protection. They did anything the ships needed to help the sailors and crews. But what he did over 25 years is, he gouged the Navy by tens of millions of dollars by overcharging for just about everything from fuel to sewage removal.

And he was able to perpetuate this fraud with an old-fashioned way of bribing U.S. Navy officials. He bribed, by his own admission, scores of Navy officials to rig contracts and look the other way so he could charge — gouge U.S. taxpayers out of millions of dollars.

And he bribed by taking U.S. officials, Navy officials to some of the fanciest restaurants in Asia, giving them free vacations, and supplying them with lots of prostitutes. So it was a very sordid scandal, an old-fashioned recipe for greed, but it worked for 25 years, until he was arrested and brought back to the United States almost a decade ago now.

Amna Nawaz:

Craig, you write that the Navy didn't really begin investigating him in earnest until 2010, but there had been reports about what he was up to for a while.

So what did it take for the Navy to start looking into this and essentially start investigating itself?

Craig Whitlock:

That's right.

So, for many years, dating back to the early 2000s, so really almost from the end of the Clinton administration, if you can think back that far, there were reports from some Navy officials that Leonard Francis' company was overcharging the Navy, was faking its invoices, pumping more sewage than was possible from ships and billing the Navy for it.

And these complaints were always forwarded to the Naval Criminal Investigative Service, or NCIS, which is famous for the drama on TV. But for year after year, NCIS would just not look into these complaints or would close them up pretty quickly. They didn't see them as a priority.

But the other angle was that Leonard Francis penetrated NCIS. He actually had at least one agent on his payroll that he bribed to feed him law enforcement files, so he could always stay a step ahead of U.S. authorities. And so that worked, even until his capture in 2013.

Amna Nawaz:

So, you mentioned he slipped home detention in San Diego, made his way down to Venezuela. How did he do that? And, also, what happens to him now?

Craig Whitlock:

Well, it's really a mind-blowing story.

So he became a cooperating witness for the Justice Department, and he provided incriminating evidence against hundreds of U.S. Navy officers who had attended his parties, his dinners, or accepted prostitutes. Eventually, they let him out of prison — he was awaiting sentencing — because he got sick. So he received special treatment. He had his own doctors.

He was on home detention in a million-dollar mansion in San Diego. And all along, U.S. authorities thought he was too sick to flee, so they kind of let this happen. But what happened over Labor Day weekend in 2022 is, he flew the coop. He sliced off his ankle bracelet with a GPS transmitter, called an Uber, and rode to the border at Tijuana before anybody could figure out he had escaped.

He then took some flights through Mexico to Cuba, tried to get refuge in Cuba, but they turned him away, so he ended up in Venezuela. But in the coming days, he will probably be transferred back to San Diego. And then some time early next year, he will finally, finally be sentenced for these fraud and bribery charges 10 years after he was first arrested by U.S. authorities.

Amna Nawaz:

This is a fascinating story. I cannot wait to read the book next year.

Craig Whitlock, reporter for The Washington Post, joining us tonight.

Craig, thank you so much.

Craig Whitlock:

You bet.