How Fat Leonard compromised admirals in charge of Navy intelligence -

Shortly after he was promoted and entrusted with one of the Pentagon’s most sensitive jobs — director of naval intelligence — Vice Adm. Ted “Twig” Branch received an urgent request from the Justice Department. Prosecutors wanted to speak with him about an investigation into leaks of classified material to a 350-pound Malaysian defense contractor known as “Fat Leonard.”

The businessman, Leonard Glenn Francis, and his company, Glenn Defense Marine Asia, held $200 million in contracts to resupply U.S. Navy ships and provide port security in Asia. But Francis had recently been arrested in San Diego on fraud and bribery charges. Federal agents were shocked to discover while carrying out search warrants that he had obtained reams of classified information from corrupt Navy officers about the itineraries of U.S. warships and submarines throughout the Western Pacific.

As a foreigner without a security clearance, Francis was prohibited from possessing U.S. military secrets. Investigators were frantic that he might have sold or shared the classified ship schedules to a hostile power such as China, placing U.S. Navy vessels and crews at risk of attack.

Justice Department officials needed to gauge the seriousness of the security breach and asked Branch, as chief collector of the Navy’s secrets, to help them understand the national security implications.

Branch, then 56, wasn’t eager to speak with prosecutors. But given his job, he had little choice. On Nov. 5, 2013, he arrived at the designated meeting place: a conference room at Joint Base Andrews, the suburban Maryland airfield that houses planes used by government VIPs, such as Air Force One.

The three-star admiral was greeted by three investigators led by Mark Pletcher, an assistant U.S. attorney who had traveled cross-country from San Diego. Pletcher explained that his team was “talking to a number of people” about the classified leaks to Glenn Defense.

What he didn’t say was that the prosecution team was surreptitiously recording the meeting because, days earlier, Francis had provided incriminating evidence against Branch and another senior intelligence officer, Rear Adm. Bruce Loveless, who worked at the Pentagon.

In a bid to strike a plea deal, Francis had met secretly with prosecutors and federal agents and bragged that, over several years, he had lavished Branch and Loveless with expensive meals, cigars, prostitutes and other illicit gifts.

Given the allegations, investigators needed to determine whether the two leaders of the Navy’s intelligence directorate — key figures in the U.S. intelligence community who collaborated with the CIA and other spy agencies — had committed a crime or were vulnerable to blackmail.

During the meeting with prosecutors, Branch denied criminal wrongdoing or accepting prostitutes from Francis. But he acknowledged that he had known the Malaysian businessman for 13 years and had dined at his expense during port calls in Asia. He also admitted taking gifts from Francis, including an exotic pewter letter opener. “It’s like a Malaysian sword. It’s a curvy, saber-looking thing,” he told the investigators, according to a transcript.

And yes, he added, Francis gave wine and cigars as presents to Navy officers.

“He was very generous,” Branch said.

In the end, federal agents found no evidence that Branch or Loveless gave away classified information, and both denied doing so. But the investigation into the two admirals and their connections to Francis paralyzed the Office of Naval Intelligence for years and left lasting scars at the highest levels of the Pentagon.

The story of how two admirals in charge of military secrets forged personal relationships with Francis, an admitted con man, is revealed in a new book examining the most extensive corruption scandal in U.S. military history. This account is based on thousands of pages of confidential law-enforcement documents, including transcripts of interrogations of Branch and Loveless. Both men declined to comment for this story.

The law-enforcement files also describe how Francis, a high school dropout with a prior felony record, penetrated the Navy’s elaborate counterintelligence defenses with astonishing ease — and far more extensively than the Pentagon has publicly acknowledged — by bribing other officers for classified material.

For seven years, according to the documents, Navy counterintelligence officials failed to detect hemorrhaging leaks of military secrets to Francis while he exploited the information for his company’s bottom line.

Subsequently, since 2015, 10 Navy officers have admitted to leaking classified material to Francis and his firm in exchange for prostitutes, cash and other favors, the records show, making the Malaysian defense contractor among the most prolific espionage agents in modern history.

After a lengthy investigation and the suspension of both admirals’ access to classified information, the Navy determined that Branch violated federal ethics rules and committed official misconduct by accepting meals and other gifts from Francis.

Loveless was indicted and tried on bribery charges, though prosecutors dropped the case against him after a jury was unable to reach a verdict. During the trial, his attorney acknowledged that Loveless accepted gifts from Francis but said he was not guilty of bribery because he did not provide Francis with any benefits in return.

Francis later pleaded guilty to fraud, bribery and conspiracy charges. He is expected to be sentenced this summer.

But more than 10 years after his arrest, the Navy has yet to issue a full public accounting of the damage that his corruption of Navy leaders inflicted on national security. A senior Navy spokesman declined to comment about the case.

Like Sunday in Mississippi

Few Navy officers could claim a more sterling, or colorful, career than Branch. The son of a fabled college football player from the Mississippi Gulf Coast, he was raised in small towns outside New Orleans before winning admission to the Naval Academy in 1975. Despite the school’s punishing academic workload, he demonstrated a knack for maximizing its limited social opportunities.

“Growing up 58 minutes away from Bourbon Street has got to have its effect on a person and Ted was no exception to the rule,” observed the Academy yearbook, The Lucky Bag. “By the time he was 14, he knew what to order when he went to the bar — ‘J.D. on the rocks, please.’”

After graduation, Branch returned to the Gulf Coast to attend flight school in Pensacola, Fla. In a tongue-in-cheek military ritual, squadrons assigned junior pilots a call sign, or nickname, for radio identification purposes and to build esprit de corps among the swaggering brotherhood of aviators. Given Branch’s slight, scrawny frame — he stood maybe five-foot-five with blow-dried hair — his squadron christened him “Twig.”

Branch winced when he learned his call sign and pleaded with the squadron’s commanding officer to reconsider, according to a description of the episode that Branch later shared with a senior Navy official.

He explained that his father, Frank, already had been immortalized as “Twig” Branch decades earlier when he starred at quarterback for Mississippi State University despite weighing only 125 pounds.

The squadron commander looked down at the young officer. You really don’t like the name, huh?

No sir, Branch said.

Good, the commander replied. Then it’s settled. Twig it is.

Truth was, the call sign fit Branch to a T. With his squeaky twang, he sounded like another bantamweight Naval Academy alumnus — Texas billionaire H. Ross Perot — and told stories with the same homespun flair. “It’s like Sunday in Mississippi,” he told shipmates while training at sea in 2005, according to an interview he gave at the time. “You get up, go to church, eat some chicken, and shoot some guns. So enjoy it.”

As a pilot, he thrived aboard a succession of aircraft carriers and flew A- 7 Corsairs and F/A- 18 Hornets in combat over Grenada, Lebanon, Bosnia and Iraq. As commanding officer of the USS Nimitz, he starred in Carrier, a PBS documentary about life aboard a nuclear-powered aircraft carrier that aired to acclaim in 2008. As commanding officer of the USS Carl Vinson carrier strike group, he led a humanitarian relief mission to Haiti in 2010 when an earthquake killed more than 200,000 people.

By the time he was promoted to director of naval intelligence in 2013, Pentagon insiders believed he stood a good chance of becoming a four-star admiral. But his high-flying career hit severe turbulence that November when Justice Department officials asked to speak with him about the investigation into Francis.

When the admiral arrived at Joint Base Andrews, already waiting in a VIP conference room were Pletcher, the assistant U.S. attorney; Brian Young, a Justice Department trial lawyer; and Eric Maddox, a special agent with the Naval Criminal Investigative Service (NCIS) who specialized in counterintelligence.

Pletcher asked Branch to sign a boilerplate NCIS form waiving his rights to remain silent and have an attorney present, according to a transcript of the interview. The prosecutor implied that the document was just a formality.

In fact, the document stated plainly that Branch was a suspect in a military criminal investigation. The admiral signed anyway. He volunteered that he’d met Francis in 2000 when he was executive officer of the USS John C. Stennis, an aircraft carrier, and saw him again five years later when he was the skipper of the Nimitz.

That prompted more uncomfortable questions from the prosecutors. Did he ever attend social events with Francis?

Yes, Branch said. The Glenn Defense owner would host dinners “from time to time” for the senior ship staff during port visits in Asia, usually at a restaurant or hotel.

Did the officers chip in money for dinner? No, Branch said, not in his experience. He didn’t know how much the meals cost.

Prosecutors then zeroed in on Francis’s legendary parties, during which he often entertained Navy officers with a parade of prostitutes. “Have you been present when hostesses or girls have either been brought in, or have sort of arrived on the scene?” Pletcher asked.

“I mean, there were hostesses, perhaps,” Branch answered obliquely. “I don’t have any idea if it was arranged.”

Pletcher danced around the sensitive subject, trying to muster the nerve to ask the admiral directly whether he had ever had sex with a prostitute courtesy of Fat Leonard.

“The circumstance that I had in mind is that after dinner, my understanding is that you had sort of adjourned to the hotel,” the prosecutor stammered. He asked whether Francis and another officer “brought girls back to the hotel, the two of them, and uh, and sort of met you — met you there.”

“No,” Branch said.

Pletcher tried a few more times, asking whether Branch had been provided with hostesses on other occasions. “I’m just asking the questions as they come up in the investigation,” he said, half apologetically.

“I told you that I didn’t have a hostess provided to me,” Branch snapped. “Does that answer the question?”

Pletcher said he had “an obligation” to pose the questions, based on information he had received “from other sources.” He asked if Branch wanted to stop the interview or speak with an attorney.

“OK,” Branch said. “I think we need to stop.” He stood up and left.

A perplexed prostitute

The prosecutors didn’t land the confession they were hoping for. But Branch had admitted enough to warrant getting fired. Investigators had confirmed that the director of naval intelligence accepted dinners and gifts from a foreigner with a history of bribing U.S. personnel for military secrets. Plus, Branch had acknowledged that “hostesses” may have been present.

Yet the revelations about Branch’s involvement with Francis weren’t the most embarrassing moment for the Office of Naval Intelligence that day.

Four hours earlier, in the same conference room at Joint Base Andrews, Pletcher and his team had interviewed Loveless, a one-star admiral who served under Branch. Maddox, the NCIS special agent, recorded the conversation with a device hidden in the pocket of his suit jacket.

Loveless, who was 49 at the time and a Naval Academy graduate from Tennessee, had served for several years as an intelligence officer in the Pacific before moving to the Pentagon that summer.

Francis told prosecutors and federal agents that he had once taken Loveless to an upscale, members-only sex club in Bangkok and also provided him with a Mongolian prostitute in Singapore who became his steady girlfriend, records show. Such conduct left the admiral at risk of blackmail.

According to Francis, Loveless became infatuated with the Mongolian woman and tried to impress her by sharing his business card — which explicitly identified him as a Navy intelligence officer. The perplexed prostitute showed the business card to Francis, who told prosecutors and federal agents that he became furious at Loveless for his poor judgment and lectured him about the need for discretion.

Unaware that Francis had been cooperating with the Justice Department, Loveless waived his right to remain silent during his interview. He answered general questions about classification procedures and his assessment of the damage caused by the known leaks of information to Francis. “I guess I’d say I’m not too concerned,” he told investigators, according to a transcript.

Halfway through the interview, Pletcher shifted gears and asked the admiral whether he had met Francis. Loveless acknowledged he had, but downplayed their relationship. He claimed that he paid his share of the tab whenever he dined with Francis and denied seeing him provide “hostesses” or “girls” to anyone.

Pletcher accused Loveless of lying and said he had a receipt proving that Francis had spent $8,100 in March 2012 to treat him and nine others to dinner in Honolulu. Loveless acknowledged being there with his wife but said the couple reimbursed Francis $200 for what they thought was their fair share of the meal.

The prosecutors kept hammering, asking whether he had accepted “anything” else from Francis, including hostesses. Loveless insisted he had not.

But the admiral seemed to grow anxious when Pletcher confronted him about his reputed fondness for Mongolian prostitutes.

“The sources that we have talked to have described very specifically that after dinner in one of the locations, that two Mongolian girls were provided, and that one of the Mongolian girls actually became — my understanding is, in a real close relationship to you, and in fact you gave her a business card,” Pletcher said. “This is the relationship that we’re concerned about.”

“I— I do remember a business card,” Loveless sputtered. “I did not have a close relationship, significant or not significant, to remember.”

“This is the hostess who was provided by Leonard Francis,” Pletcher pressed.

“I— I’m not sure of that part of it,” Loveless said. “I’m just aware of — of a woman.”

He acknowledged socializing with the Mongolian woman over drinks but denied having a sexual relationship.

He said he’d shared his business card to show “this is who I am, this is what I do.”

Asked whether he had patronized prostitutes supplied by Francis on other occasions, he again said no.

“Yeah, let’s be clear,” he insisted. “I did not accept that — that — whatever that — that service is.”

The prosecutors told Loveless they didn’t believe him. “I’m just going to be honest with you,” said Young, the Justice Department attorney. “I’m still going to leave this interview with concerns about the Mongolian girl and that aspect. So if there’s anything else you can tell us . . . now would be the time to do it.”

“No,” Loveless said. “No additional comment.”

Echoes of Tailhook

For the Navy, the Glenn Defense investigation was rapidly becoming a counterintelligence horror show.

The next morning, Nov. 6, federal agents in Tampa arrested another officer — Commander Jose Luis Sanchez — on charges that he had leaked classified information and other material to Francis for prostitutes, luxury travel and $100,000 in cash. (Sanchez later pleaded guilty to taking the bribes. His attorney declined to comment.)

Investigators were desperately trying to measure the volume of the classified material leaked to Francis and whether any of it had landed in the hands of U.S. adversaries.

During his interviews with prosecutors and agents, Francis said he never knowingly divulged U.S. ship itineraries to another country, documents show. But he said he couldn’t rule out that foreign spooks might have hacked Glenn Defense’s computers or gleaned his stash of secrets by other means.

For example, he acknowledged that his IT manager had access to the classified information and was friendly with Chinese diplomats in Singapore, including the defense attaché.

On the day of Sanchez’s arrest, the Justice Department confidentially informed aides to Navy Secretary Ray Mabus that two senior intelligence officials — Branch and Loveless — were under criminal investigation and had failed to clear themselves of suspicion under questioning.

Mabus was astounded, he recalled in an interview. While admirals sometimes got in trouble for personal misconduct or professional incompetence, the Navy handled those cases administratively. It was almost inconceivable that the Justice Department might prosecute officers of such senior rank. Up to that point, no active-duty admiral had been convicted of a federal crime.

When Mabus heard the story about Loveless giving his business card to the Mongolian prostitute, he recalled, he couldn’t believe an intelligence officer could be so stupid. But he was stunned that Branch was under suspicion at all.

As a former governor of Mississippi, Mabus had been acquainted with Branch’s father, or “Big Twig,” as he called him. As Navy secretary, he said he had been impressed by Little Twig’s leadership during the Haiti earthquake relief operation.

The Justice Department divulged few other details but left Mabus with the impression that indictments were imminent and that the case against Branch was one of the strongest that prosecutors from the U.S. attorney’s office in San Diego had ever seen.

Mabus said his general counsel and chief of staff advised him to suspend both admirals’ access to classified material immediately instead of waiting for the legal process to play out. He agreed.

The Navy announced the suspensions at 7:21 p.m. on a Friday, three days after the interviews at Joint Base Andrews. A sparsely worded press release stated that the Navy had placed Branch and Loveless on temporary leave on suspicion of “illegal and improper relations with Leonard Francis.”

Several weeks passed with no indictments. The federal investigation hit a wall. Francis, who had previously been eager to blab, angrily stopped cooperating after a judge refused to release him on bail.

The Justice Department kept Navy leaders in the dark, leaving Mabus exasperated. He said he agonized over what to do with Branch.

As the service’s top civilian, Mabus was under pressure from the uniformed brass to stand up for them and for the Navy as an institution. Many admirals had bitter memories of the Tailhook sexual-assault scandal from the early 1990s, when members of Congress pressured the Pentagon to clean house by replacing much of the Navy’s leadership.

The Navy’s reputation was at stake, but so was Mabus’s. He had launched his political career in Mississippi in 1983 as an anticorruption crusader, running for election as state auditor.

Now, 30 years later, a major scandal involving Navy officers was brewing under his watch. Would he hold them accountable or try to whitewash the Navy’s image?

On Dec. 20, 2013, Mabus held a news conference at the Pentagon. It was the first time any Navy official had fielded questions on camera about the corruption investigation since Francis’s arrest three months earlier.

He promised to crack down on contracting fraud and to appoint a four-star admiral with the authority to impose discipline on anyone involved in the Glenn Defense case.

He hinted that more arrests were likely and promised that the Navy would be transparent, especially about its handling of misconduct allegations against high-ranking officers.

“It’s the right thing to do,” he said. “I would rather get bad headlines than let bad people get away.”

Mabus’s transparency pledge didn’t last long. Neither he nor anyone in the Navy would hold another news conference about the scandal.

Partying with ‘Russian girls’

With Francis refusing to cooperate, the investigation of Branch slowed. But gradually, federal agents pieced together a clearer picture of their relationship.

Investigators confirmed that Branch attended dinners with Francis on four occasions, including a $14,700 meal that Glenn Defense hosted for USS Nimitz officers in Hong Kong in 2005. In turn, Branch hosted Francis for lunch and wrote an official letter praising Glenn Defense for its “outstanding” and “over the top customer service.”

Federal agents could not corroborate Francis’s claim that he had provided Branch with prostitutes on three occasions. But they found plenty of smoke swirling around his allegations.

Several Navy witnesses who served under Branch on the USS Nimitz reported seeing him in the company of women who they suspected might have been sex workers, investigative files show. For example, three Nimitz officers who attended the 2005 dinner in Hong Kong said they joined Francis and Branch at an after-party where women appeared. One officer said he presumed the women were prostitutes hired by Francis, though no one observed Branch doing anything improper with them.

In a separate encounter that had nothing to do with Francis, a USS Nimitz sailor reported that he had observed Branch partying with “Russian girls” at a cabaret during a 2005 port call in Manama, Bahrain.

The enlisted sailor, who spoke Russian, told federal agents that the cabaret employed the women as dancers and surmised they also may have worked as prostitutes. When the women learned Branch was the commanding officer of a U.S. warship, the sailor said, they treated the skipper like a celebrity.

Coincidentally, around seven o’clock the next morning, the sailor was on duty on the fantail of the Nimitz when he saw Branch board the ship with several “very attractive” performers from the Russian cabaret in tow.

According to the sailor, Branch was visibly struck by an “oh shit” moment when he realized his subordinate had seen him in the club the night before. But the captain didn’t say anything and proceeded to give the women a tour of the ship.

In a letter to the Navy, Branch’s attorney acknowledged that his client visited a nightclub in Bahrain and invited a “band comprised of five or six men and women” to tour the Nimitz, but said “there was no inappropriate activity involved.”

While Branch’s actions raised suspicions, the eyewitness accounts were not enough to find him guilty of a crime. But from a counterintelligence perspective, federal investigators still found them alarming — credible allegations that the Navy’s top intelligence official had partied with foreigners who may have been prostitutes.

The Branch investigation dragged on for more than three years. The Pentagon allowed him to remain in charge of Navy intelligence even though he was barred from reading or hearing military secrets. He was limited to managerial duties while his deputies handled the classified aspect of his job.

The Justice Department closed the Branch case in 2017 without bringing charges. The Navy then conducted a disciplinary review and concluded that Branch had violated ethics rules by accepting the Hong Kong dinner and assorted minor gifts from Francis.

Branch received a letter from the Navy advising him not to do it again, but otherwise he went unpunished. Pledges of transparency notwithstanding, Navy officials kept the details under wraps.

By then, the result was moot — Branch had already retired from the Navy one year earlier, with an honorable discharge and his pension and rank intact.

The Justice Department took a harder line with Loveless after other witnesses corroborated Francis’s allegations that the admiral had accepted prostitutes and gone to the sex club in Bangkok. Along with seven other officers, he was indicted in March 2017 on bribery and conspiracy charges.

During a 2022 trial, a Navy captain testified that he accompanied Loveless, Francis and other officers to the Bangkok sex club and that they took women back to a hotel afterward. Loveless’s attorney argued that there was no tangible evidence that Loveless actually had sex with a prostitute, just “an implication that people are doing it.”

The jury deadlocked over whether Loveless was guilty of a federal crime. Prosecutors later dropped all charges against him instead of seeking a retrial.

Like Branch, he had already retired from the Navy with an honorable discharge, his rank and pension preserved.

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