The Navy's top officer on Capitol Hill improperly took a luxury suite hotel upgrade in a Kuala Lumpur, Malaysia, hotel when he was the Stennis Carrier Strike Group boss four years agocommander, according to a recently released 2013 investigation obtained by Navy Times.
Rear Adm. Craig Faller, the Navy's two-star chief of legislative affairs, was offered and accepted a free room upgrade for his two-night stay while staying at the luxury hotel in Kuala Lumpur during a September 2011 port visit to the Malaysian capital, a largesse that the Inspector General said equated to a gift valued worth between $2,000 and $10,000. However, the Navy concluded the departure from ethics rules was mitigated because Faller accepted the suite for his shipmates.
The IG report substantiated investigation found that the gift came from a "prohibitedunauthorized source" and that Faller was "clearly offered the upgrade … because of his position."
Furthermore, the IG cited found that Faller for failing to did not report the gift as he was required to do. He did bring it to his staff judge advocate, who did not think the upgrade improper because Faller offered the spare rooms in the suite to members of his staff to use.
The report, obtained by Navy Times and authenticated by officials, blacked out the identity of the person who offered Faller the suite, dacted the name of the person who offered Faller the hotel suite, which was a significant upgrade from the room he originally booked through the Morale, Welfare and Recreation office. Details of the case raise questions anew about the propriety of the Navy's long-time dealings in Asia, where admirals and ship captains routinely accepted gifts and other largesse from their hosts despite ethics rules designed to protect the Navy from espionage and fraud.
The report makes clear the offer came from someone associated But the investigation makes clear it was someone associated with the hotel, such as the manager or owner. The name of the hotel was also redacted, as were large portions of the narrative, but officials confirmed who spoke on background said it was a luxury hotel.
As a general rule, members of the military may not accept personal gifts in excess of $20, or $50 from one source in the course of a year. A "prohibited source," according to these rules, conducts business with or seeks action from the Navy.
The Navy's top spokesperson, Rear Adm. Dawn Cutler, said the IG found that Faller was wrong to accept the room upgrade, but that officials had decided against disciplinary action because Faller said he only accepted the upgrade to get extra rooms for his staff.no disciplinary actions needwere taken.the Navy took no action.
"While the investigation determined the action was not in keeping with Navy regulations, it noted that Rear Adm. Faller's acceptance of the upgrade 'was not self-serving,' because he intended to make the hotel accommodations available to his staff," Cutler said. "It was determined that no adverse administrative or disciplinary action was warranted in this case."
An independent government watchdog organization who reviewed the Faller's IG report for Navy Times said that, while there wasn't any evidence of outright corruption, Faller's acceptance of the gift pointsed to a larger problem among Navy senior officers.
"Even if he wasn't trying to circumvent the ethics rules for personal gains, it appears to speak to a broader culture of laxness inside the Navy when it comes to ethics," said Michael Smallberg, an investigator at the Project for Government Oversight in Washington, D.C.
"Even if this isn't a major bribe, or the kind of serious corruption the Navy has dealt with in some other cases, this is still an example of generating the kind of good will that a lobbyist or contractor is looking for — which is why the ethics rules exist in the first place."
Faller declined a request for comment by email, saying he didn't have anything to add to the investigation and the general's letter that closed it.
As head of legislative affairs, Faller is responsible for communicating the Navy's needs with legislators and their staffs, as well as arranging travel for delegations and coordinating testimony for senior Navy leaders.Mattis's endorsement letter. CAN WE QUOTE FROM THIS? AND CAN You explain what his job as OLA does?
'Impromptu reception'
According to the IG, Faller was approached by someone associated with the hotel who inquired about his room and offered a larger suite. Faller initially turned the person down, saying it was just him. But after the person insisted that the room would sit unused otherwise, Faller accepted.
"I did end up, once I saw it, thinking to myself that, 'Hey, I've got a bunch of staff in an admin room. I'll tell them. I'm sure that somebody could afford to avail themselves of the opportunity here,'" Faller told investigators. "And that's why I agreed to it."
Faller then put out word to his staff that the room was available, the report said, and three officers ended up using the other rooms.
Faller spent two nights in the upgraded room, which the IG estimated would have cost between up to $2,000 and $8,000. The advertised rate for the room was around $10,000, but the hotel representative who offered Faller the room claimed it typically rentedbooks for between $2,000 and $3,000 a night.far less.
After accepting the upgrade, Faller left the hotel in the evening and met with after accepting the upgrade and, after meeting with returned to the hotel after meeting with Malaysian defense officials. He returned to find a large gathering of his staff and destroyer squadron personnel in the room.
The IG noted that because of the room was used for an "impromptu reception" of DESRON and CSG staff, and shared with other staff members, Faller's acceptance of the room wasn't self-serving.
Marine Gen. James Mattis, who as the head of Central Command was head Faller's boss in 2013, Faller's case was reviewed by then Central Command chief Gen. James Mattis, Faller's boss when he was director of CENTCOM operations in 2013, who recommended no disciplinary action be taken.
"I have determined that he did not solicit the room upgrade and he did not accept the room upgrade for his personal gain," Mattis wrote. "There was no malfeasance or any indication of material gain by him in this case."
Mattis also goes on to praised Faller as an "outstanding officer and leader of unquestionable integrity, propriety and honor."
Admirals and ship captains are often faced with difficult choices when it comes to gifts, especially in 7th Fleet, said a former cruiser commanding officer, now retired.
One retired cruiser captain who spoke to Navy Times on background to avoid professional backlash said
The captain had dealings with Leonard Glenn Francis, president and chief executive officer of Glenn Defense Marine Asia, and the central figure in the "Fat Leonard" bribery and corruption trial. He said a culture developed in 7th Fleet in which even well-meaning officers would accept gifts to avoid offending their hosts or because they thought that's how business was done in southeast Asia.
"It starts to become, 'Well, we've always done it this way,' and people start to lose sight of the fact that this is fundamentally wrong," said the retired O-6, who asked for anonymity to avoid fraying business connections with the service.
Faller declined a request for comment by email, saying he didn't have anything to add to the investigation and Mattis's endorsement letter.
The case comes to light at a time when the Navy and its dealings in Asia, especially with GDMA, a husbanding firm, are under intense scrutiny amid a federal corruption investigation that has affected impacted dozens of admirals and senior officers., according to reports from Navy Times sister publication Defense News.
A half dozen admirals have been cited for ethical lapses in their dealings with Francis and GDMAhusbanding firm Glenn Defense Marine Asia and its larger-than-life CEO Leonard Franics. Rear Adm. Mike Miller, the former Naval Academy superintendent, and two other high-ranking officers from the carrier Reagan's 2006 deployment, have been issued letters of censured for their ties with over their dealings with Francis, know as 'Fat Leonard' in Navy circles.
Nearly a dozen high-ranking officers have been publically dragged into the growing GDMA scandal, including the head of Naval Intelligence Vice Adm. Ted Branch and his deputy Rear Adm. Bruce Loveless, who have had their security clearances suspended pending the outcome of an investigation into suspected connections to GDMA.
The case also wrapped up the former head of the Naval Academy
Navy officials who spoke on background to discuss the corruption investigation said that there was no immediate indication that the husbanding firm Glenn Defense Marine Asia and its disgraced former head Leonard Francis was involved in Faller's room upgrade.
Another Navy official who spoke on background to discuss the investigation said that generally a husbanding firm would handle hotel arrangements for carrier staff, but could not say if GDMA made arrangements for Faller and his staff during their 2011 stop in Kuala Lumpur.
GDMA was the lead husbanding agent in 7th Fleet in 2011, but Navy Times could not confirm whether GDMA handled the Stennis' stop in Kuala Lumpur. Typically, the husbanding agent handles hotel arrangements for carrier staff, an official said. handling the bulk of the Navy's 7th Fleet in-port husbanding services in 2011, but Navy Times could not confirm that the Stennis's stop in Kuala Lumpur was handled by Francis's firm.
Francis, a Malaysian national, pleaded guilty in January to what prosecutors claim was a conspiracy to bilk the government out of more than $20 million and bribing Navy personnel with everything from prostitutes and golf junkets to tickets to the Lion King and Lady Gaga concerts.
David B. Larter was the naval warfare reporter for Defense News.
