22 May 2017

NZ Navy paid 'Fat Leonard' company $700k

8:55 pm on 22 May 2017

The New Zealand Navy paid more than $700,000 to a company whose owner was involved in a corruption scandal involving American naval officers, it has been revealed.

The Navy is marking its 75th anniversary this week.

The New Zealand Navy said it had used Glenn Defence Marine Asia for ship visits in South East Asia between May 2007 and December 2011 (file photo). Photo: Royal New Zealand Navy

In 2015, Leonard Francis - known as Fat Leonard - admitted his Singapore-based port services company, Glenn Defence Marine Asia, bribed American officers with prostitutes, meals, alcohol and luxury hotel stays to ensure US Navy ships stopped at ports where his company operated.

The scandal has been dubbed the biggest in US Navy history, and Francis is now awaiting sentencing.

Prime Minsiter Bill English after a caucus meeting on February 7.

Prime Minister Bill English Photo: RNZ / Rebekah Parsons-King

The New Zealand Navy said it used Glenn Defence Marine Asia for specific ship visits in South East Asia between May 2007 and December 2011.

However, it said it would not investigate its relationship with the company, despite evidence the company bribed American officers, including a rear admiral.

The navy said it had no standing or enduring contract with Glenn Defence Marine Asia.

"The services included tugs, provision of buses and rubbish collection. Such services are routinely acquired for most port visits. The total spend was $710,235.04," it said in a statement.

"The services were purchased as required under local agreements, including with the host nation and using NZDF [New Zealand Defence Force] purchase orders.

"The agreed services were provided on time, to the required standard and the agreed price."

Labour defence spokesperson Iain Lees-Galloway said the navy's decision not to investigate was unacceptable.

"There was a significant amount of taxpayers' money spent on contracts with this company.

"There's clear evidence from overseas that this was a company that engaged in bribery and corruption, and the least that can be done in New Zealand is to take a look, just be certain that everything was above board."

Prime Minister Bill English would not say whether a review was needed, but said the navy probably needed evidence before opening up a case.

He said there was no allegation of any wrongdoing by New Zealand Navy officials.

"We would be concerned if there was any evidence that the alleged activities elsewhere that led to the imprisonment were part of New Zealand procurement.

"I've been and watched that procurement process pretty much up close for eight years and I haven't seen any indication that that's how the New Zealand armed forces do business."

The New Zealand Defence Force declined to be interviewed.

Get the new RNZ app

for ad-free news and current affairs