Retired MSC Ship Master Admits Husbanding Contract Conspiracy, Fined $2,100

July 31, 2019 11:12 AM
The dry cargo and ammunition ship USNS Charles Drew (T-AKE 10) steams alongside the aircraft carrier USS John C. Stennis (CVN-74) during a replenishment-at-sea in 2019. US Navy Photo

A former Military Sealift Command ship captain admitted he received high-speed rail travel and hotel stays, an iPad and expenses for a two-week, holiday family trip to South Korea in exchange for giving a South Korea-based husbanding company details about scheduled port visits.

James Russell Driver III was the civilian master and captain of dry cargo/ammunition ship USNS Charles Drew (T-AKE-10) from November 2013 to January 2014, a three-month period that federal prosecutors alleged Driver shared “confidential and proprietary” information about ship movement, according to a 15-page indictment a Michigan grand jury issued on Dec. 18, 2018. They alleged Driver also pressed Navy officials to contract with two South Korea-based husbanding companies over other competing firms to provide logistical support services including fuel, food, supplies and trash collection to Navy ships that visited ports in the region.

Driver, who initially faced charges of conspiracy to commit bribery, bribery and honest services fraud, this month pleaded guilty to one count of conspiracy, according to court documents filed July 16. The government agreed to drop the remaining two charges in exchange for his continued cooperation.

Driver, who retired from federal service in August 2015, had completed 35 years of “honorable service” in the sea services that began with four years as an enlisted sailor and included service in the Naval Reserves and Military Sealift Command after he graduated from the U.S. Merchant Marine Academy, according to a sentencing memorandum filed July 9 in the U.S. District Court’s Eastern District of Michigan.

Defense News reported on the initial indictments on Tuesday.

He could have faced up to 18 to 24 months in prison along with three years’ supervised release, according to court records. But the government sought a lesser sentence because of Driver’s “substantial assistance” and plea agreement, and in a final judgment issued July 16, the court fined him a total of $2,100.

“While Mr. Driver takes full responsibility for his actions, he respectfully submits that the incidents that led to the charges, in this case, should be reviewed in the context of an otherwise excellent 35-year career,” Driver’s defense attorney argued in a sentencing memorandum. “During that time, Mr. Driver was recognized numerous times for demonstrating exceptional operational planning, execution, and the completion of numerous important Naval logistical operations. At the time of this offense, Mr. Driver was described as being the “best of the best” in the field of naval logistical support.”

According to the indictment, Driver traded the sensitive naval information via personal emails to Sung Yol “David” Kim, owner and chief executive officer of Busan-based DK Marine Service Co. The South Korean company received the Navy contract to support the Charles Drew for its visit to Chinhae, South Korea, which began Dec. 21, 2013, according to the indictment.

Prosecutors alleged Driver and Kim conspired with an unnamed individual who worked as operations director at MSC’s office in Busan, South Korea, a position “responsible for directing all aspects of MSC ships’ arrival, logistics support and departure from port.”

“In order for a U.S. Navy ship to acquire goods and services, internal paperwork known as a logistics request (LOGREQ) needed to be transmitted from the vessel to certain administrative offices, including through the appropriate contracting process with the U.S. Navy’s Fleet Logistics Center in Yokosuka, Japan,” according to the indictment against Driver.

Driver provided Kim with information that included “pricing for husbanding supplies and services” proposed by a competitor and “three confidential U.S. Navy guidance cables from Washington, D.C., to ships including the Charles Drew pertaining to HSP contracting policy and pricing information” for DK Marine Service and another unnamed company that vied for the contract. Driver had emailed some information under the guise of sharing photographs of a hospital visit to a female South Korea sailor injured when her ROK Navy ship met up with the Charles Drew to refuel.

“Kim would direct Driver to circumvent prescribed U.S. Navy procedures for obtaining husbanding services, including delaying submission of the LOGREQ,” according to an 11-page indictment against Kim that a Michigan grand jury issued on Jan. 17.

At one point, it stated, Kim “corruptly gave, offered or promised things of value, including travel expenses, gifts and a job offer, to Driver.”

The indictments echo the ongoing investigations of long-running fraud, bribery and corruption case surrounding a regional husbanding firm, Glenn Marine Defense Asia.

That so-called “Fat Leonard” investigation, named after GDMA’s chief executive Leonard Francis, has ensnared several dozen Navy officials, including flag officers and senior leaders, many who have pleaded guilty or received prison sentences in recent years.

Gidget Fuentes

Gidget Fuentes

Gidget Fuentes is a freelance writer based in San Diego, Calif. She has spent more than 20 years reporting extensively on the Marine Corps and the Navy, including West Coast commands and Pacific regional issues.

Get USNI News updates delivered to your inbox