Friday, April 4, 2014

U.S. Navy: Bribery Scandal (2013)

U.S. Navy seal

The United States Navy is caught up in a major bribery scandal that involves senior officers and NCIS agents. In late 2013, the report came out that top officials received cash, prostitutes, and other bribes for inflated contracts (Whitlock, 2013). Various Navy officlas, NCIS officials, and Glenn Defense Marine company officials have all been arrested on corruption charges (Whitlock, 2013). Glenn Defense Marine is a company that has provided logistical support to the Navy in East Asia for about a quarter-century and has received over $200 million in contracts. The company is now at the center of this investigation that involves bribery, fraud and much more (Whitlock, 2013). The Navy became suspicious of this activity in 2010 and arrests were finally made in 2013 (Whitlock, 2013; Perry, 2014).
Federal prosecutors have alleged that Glenn Defense Marine routinely overbilled for many different products and services it has supplied to the Navy (Whitlock, 2013). Retired Admiral Gary Roughead called the allegations “extremely serious, disconcerting and surprising” (Whitlock, 2013). According to court documents filed in San Diego, chief executive of Glenn Defense Marine, Leonard Glenn Francis and others in the company “targeted Navy personnel serving in Asia and plied them with prostitutes, cash, luxury hotel rooms, plane tickets and, on one occasion last year, tickets to a Lady Gaga concert in Thailand” (Whitlock, 2013). In exchange for the bribes, Francis required inside information about ship deployments and had one high-ranking commander steer vessels to ports where his company could easily overcharge the Navy (Whitlock, 2013).
This remains under investigation by the Navy, the U.S. Congress and the U.S. Department of Justice (Whitlock, 2014). Several officers have been relieved of duty and some have already been charged with crimes. In November of 2013, Captain David Haas became the sixth naval officer to be caught up in this case (Presse, 2013). At that time, Haas was immediately relieved of his duties as deputy commander of Coastal Riverline Group One and reassigned to the staff on another unit (Presse, 2013). All together, three officers have been charged and two other suspended (Presse, 2013). As of January 2014, Rep. Darrell Issa (R-CA) has opened an investigation by the one of the most powerful committees in Congress, the U.S. House Oversight and Government Relation Committee in which Rep. Issa is the chairman of (Whitlock, 2014). Finally, as of March 2014, two individuals in the case have pleaded guilty (Perry, 2014). Former Glenn Defense Marina executive, Adam Wisidagama and John Bertrand Beliveau, a former NCIS agent have pleaded guilty to charges related to bribery and leaking confidential information (Perry, 2014). All of the other individuals that have been arrested still await trial (Perry, 2014). All in all, this is one of the biggest scandals the Navy has been involved in and one that could bring forth many changes for the Navy.

Defense contractor Leonard Francis, right, 
is shown in this courtroom sketch with his attorney 
Patrick Swan, Judge David Bartick and Prosecutor Robert Huie 
in an November appearance in court in San Diego.
In this situation there are a several stakeholders. The stakeholders are the U.S. Navy, Glenn Defense Marine, the Navy and NCIS officials involved, and the Glenn Defense Marine officials involved. The U.S. Navy chooses what companies it wants to give its contracts to and how much it wants to pay for those companies’ services. The U.S. Navy should always be wondering if it is getting a fair price and needs to make sure no confidential information gets leaked out. Glenn Defense Marine is responsible for providing the Navy with support and should charge the Navy fairly. It needs to respect what the Navy does and make sure it is helping the Navy act productively and efficiently. The officials involved in this case were taking bribes illegally and helping Glenn Defense Marine profit while the Navy suffers. These officials clearly were only looking out for themselves and were not looking to help the Navy. Finally, the officials at Glenn Defense Marine did their best to take advantage of the Navy officials. The bribes they gave these officials were wrong and they need to be punished for their actions.

Each of the ethical theories: Individualism, Utilitarianism, Kantianism and Virtue Theory can help see whether or not the U.S. Navy acted ethically. In this case, the Navy acted unethically according all of these theories. The Navy acted carelessly and did not do its best to do the right thing and act ethically.

According to Friedman’s theory of Individualism, the only goal of a business is to maximize its profit for the owners and its stakeholders as long as it is not doing anything illegal (Salazar). In relation to this case, the idea of maximizing profits does not apply since the Navy is a governmental organization and not trying to make a profit. Instead, the Navy focuses on maximizing its effectiveness and lawfulness. When this is taken into consideration for this case, it is clear that the Navy did not maximize its effectiveness and lawfulness. Its lawfulness has not been maximized which has been shown in multiple occasions. First off, the officials were accepting bribes in exchange for confidential information. Both of those things are illegal and wrong. Navy officials or any company official should not be accepting bribes for anything or leaking confidential information. By doing this, the information could get into the wrong hands and cause even more problems. The Navy needs to act lawfully and also needs to maximize its effectiveness. In this case, the Navy was overcharged by Glenn Defense Marine therefore is not able to be as effective as possible. By being overcharged, the Navy’s funds begin to decrease quicker which means that it is not able to spend money on other things so it can operate with the maximum effectiveness. Finally, the Navy had to discipline many top officials and therefore is losing people that can help the Navy operate effectively. These officials were in charge of important vessels in the Navy and by losing them; the Navy has to replace them which in turn might make it operate less effectively. All in all, according to the Individualism theory the Navy did not act ethically.

Rear Adm. Bruce F. Loveless, left, and Vice Adm. Ted Branch, right

A second ethical theory is Utilitarianism which states that one needs to maximize happiness in oneself and in others (Salazar). Utilitarianism says that happiness is the only thing of value. In this situation, the Navy needed to make sure it was maximizing happiness overall and not just for themselves. This was not true for this case. Clearly, only a small amount of people were happy, but the overall happiness was not maximized. The Navy catered to Glenn Defense Marine by making sure that it continued to receive contracts and in turn was overcharged by Glenn Defense Marine. By doing this, the Navy did not maximize its own happiness, but did maximize Glenn Defense Marine's happiness. The Navy was overcharged for the services provided by them and continued to let it happen. One could argue that the Navy maximized its own happiness by receiving bribes. This could be an argument, but is flawed. The officials that received these bribes and Glenn Defense Marine's officials wound up losing their positions and some were criminally charged. Therefore, happiness was not maximized in this case and according to the utilitarian theory; the Navy did not act ethically.

The next ethical theory is Kantianism. The basic principles of this theory are act rationally, allow and help people make rational decisions, respect the individual needs and differences of everyone and be motivated to do what is right because it is right. In addition, Kant’s formula of humanity states that one should act in a way to treat humanity in a way that is valuable for one’s own sake and never simply as a way to get something else (Salazar). In other words, one should always act fairly and not try to trick anyone. When applying this theory to this case, it is clear the U.S. Navy did not meet the basic principles of Kantianism. The Navy was not motivated to do what is right because it is right. The officials that accepted the bribes know it is wrong to accept them and also to provide confidential information to others that are not allowed to know it. The Navy has since corrected this by getting rid of the officials and by charging them criminally which could be seen as acting rationally, but the damage was already done. In addition, Glenn Defense Marine did not act rationally or do what is right by offering the bribes. The officials at the company know bribery is illegal and should not be doing it, but continued to do it to benefit themselves and get what they wanted. Clearly, Kant’s formula for humanity is also violated. The officials accepted the bribes for their own satisfaction and not for the overall good of the Navy. In addition, the Navy continued to provide Glenn Defense Marine with contracts therefore both sides were using the bribes to get something else and not in a valuable way. All in all, according to Kantianism’s basic principles and the formula for humanity what the Navy did was unethical.

Virtue Theory
U.S. Navy ships at sea
The final ethical theory is virtue theory. Virtue theory seeks a full description of the virtues that constitute a good human life. The virtues are dependent on the thing’s function and circumstances. There are four main virtues in business which are courage, honesty, temperance and justice. Courage is the willingness to take a stand for the right ideas and actions. Honesty is treating everyone fairly and being truthful to all. Temperance is expected reasonable things and Justice is being fair and providing good ideas and quality products (Salazar). The U.S. Navy did not follow any of these virtues. In order to be courageous, the Navy would have had to take a stand for what was right and not accept any bribes and not give out confidential information. The Navy did not do this and if this information got into the wrong hands, a lot more problems could have been caused. Glenn Defense Marine also did not act with courage because it bribed the Navy which is clearly not taking a stand for the right actions. A company that wants to do the right thing would not bribe anyone and do the right thing. When looking at honesty, one could argue that the Navy has never tried to cover up this situation which is both true and false. As previously mentioned, the Navy is currently conducting an internal investigation. In addition, the U.S. House Oversight and Government Relations have opened an investigation. Rep. Issa, the chairman of the committee stated “he was concerned that the Navy’s investigations and reviews “will not go far enough” (Whitley, 2014). This shows that honesty is not displayed because the investigation might not reveal all the problems and all the problems should be disclosed. In order to act with temperance, the Navy should expect its officials to follow all of the rules it sets forth. Unfortunately, these officials did not and the Navy suffered from that. The Navy needs to make sure its rules are being followed and continue to enforce these rules so no other officials cause problems. Finally, the final virtue of justice would have been followed if everyone was treated fairly and the Navy provides quality service by following all rules and regulations. The Navy did not do this because rules and regulations were not followed. The Navy needs to look these over and make sure something like this never happens again. Once again, the Navy’s actions would be deemed unethical according to virtue theory.

All in all, the U.S. Navy was involved in a major bribery scandal. Senior officials accept bribes in exchange for confidential information and have since been either relieved of their duties or criminally charged. Glenn Defense Marine took advantage of the Navy because it would overcharge the Navy for the services it provided. All of the actions that occurred are unethical according to all of the ethical theories discussed. These include: Individualism, Utilitarianism, Kantianism and Virtue Theory. This sort of scandal will affect the Navy for years to come as the case get resolved and will surely trigger massive changes in the Navy.

Perry, T. (2014, March 18). Navy bribery scandal figure pleads guilty. Los Angeles Times. Retrieved April 3, 2014, from,0,5700625.story#axzz2xq8VmeDp

Presse, A. (2013, November 21). Another US Navy Officer Suspended Over Bribery Scandal Involving Prostitutes. Business Insider. Retrieved April 3, 2014, from

Salazar, Heather. Business Ethics Lectures. WNEU. Spring 2014.

Whitlock, C. (2013, October 20). Senior officer, NCIS agent are among those arrested in Navy bribery scandal. Washington Post. Retrieved April 3, 2014, from

Whitlock, C. (2014, January 30). House panel opens probe into Navy bribery and fraud scandal. Washington Post. Retrieved April 3, 2014, from

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