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US Navy ends contracts with firm linked to scandal

The US Department of the Navy logo hangs on the wall February 24, 2009, at the Pentagon in Washingto,DC
The US Department of the Navy logo hangs on the wall on February 24, 2009, at the Pentagon

The US Navy has cancelled more than $200 million in contracts with a Singapore-based defense firm caught up in a major bribery scandal linked to senior naval officers, officials said Thursday.

The Navy called off four contracts worth $203.5 million and prohibited new orders with Glenn Defense Marine Asia (GDMA), which is at the center of a criminal case involving payoffs and prostitutes, two naval officials said.

"All four contracts were terminated," a Navy official, who spoke on condition of anonymity, told AFP.

The company's CEO, Malaysian businessman Leonard Francis, has been charged with conspiring to bribe naval officers with prostitutes and perks to secure lucrative contracts to provide American ships with food, water and other supplies at port visits in Asia.

"We have discontinued all active contracts, subcontracts, task orders and delivery orders with GDMA," the official said.

"These suspensions mean that we are not able to enter into new contracts or issue any new task or delivery orders with GDMA."

GDMA's Francis allegedly paid naval officers with luxury travel and female escorts in exchange for confidential details about ship movements and other information related "to hundreds of millions of dollars in Navy contracts," according to a September statement from the US attorney's office in San Diego.

On its website, GDMA touts itself as "Asia-Pacific's leading naval logistics and marine husbanding service provider" that is able to provide "24/7 naval fleet support."

US Navy spokesman Admiral John Kirby has said the case is still unfolding and that more senior officers and civilians could be charged by federal authorities.

Three naval officers already have been charged and two others are under investigation in a case that has rocked the American navy.

The case follows pledges by naval leaders in recent years to clamp down on corruption and waste related to contractors, after a 2011 scandal that involved kickbacks worth $10 million.