Internal reports from a 2012 U.S. Navy investigation unsealed in March detail the decisions that led a naval officer over the Littoral Combat Ship program to be relieved of his duty just days after a personal relationship with an executive assistant at Austal USA was discovered.
Though the 63-page report from the Naval Sea Systems Command inspector general is redacted, Lagniappe was able to determine the identities of some of those involved from news releases issued by the Navy, descriptions contained within the report itself and other publicly available information.
The investigation centered on Capt. Jeffrey Riedel, who the Navy concluded held a “close personal, and potentially intimate, relationship” with Elizabeth Loving — the executive assistant to former Austal President Joe Rella.
According to the Navy, that relationship “created the appearance of impropriety” because Riedel was tasked with overseeing the LCS program, which is worth billions to Austal.The events covered in the report took place in January 2012, when Riedel was in Mobile for the christening of a new vessel and other events related to the LCS program.
In her comments to the Navy, Loving claimed it was Rella who encouraged her to get close to Riedel — a claim Rella denied throughout the report.
“He was like, ‘We need to get on his good side. We need to be his friend.’ He’s like, ‘We are in a lot of trouble here. We’ve got a lot going on,’” Loving said of her conversations with Rella. “[He said] ‘Book yourself into the hotel. Take every opportunity. Go for drinks. Go for dinner.’”
Loving claimed Rella had specifically asked her to get photos of Riedel in a compromising situation, but told investigators all of her correspondence with Rella related to that directive was handled verbally.
The report itself “did not uncover any evidence to support this allegation,” but regardless of the motivation, both Riedel and Loving admitted Loving soon began “throwing” herself at the visiting Navy captain both in person and in hundreds of text messages and emails.
“If you look at it, you’re going to know I threw myself at him, like, bad. Bad,” Loving said in a telephone interview with Navy investigators. “I mean, if he said, if he would say something to me like, ‘It’s a sunny day,’ I would turn it into something very sexual.”
One night at Veet’s, Riedel and Loving exchanged phone numbers, and according to the Navy, records on Riedel’s government-issued phone showed 579 text messages were exchanged with Loving by the time he returned to Mobile for an LCS program review two weeks later.
Riedel and Loving both told investigators it was an accident they wound up sharing a Daphne hotel room on Jan. 24, 2012, though some interviewed in the report claimed Loving had previously discussed a plan to stay with him during his return to Mobile.
“We didn’t have sex,” Loving told investigators. “I’m not saying that he didn’t flirt back. I didn’t say he wasn’t giddy — I’m not saying that. I’m just saying I did not have sex with the man.”
Based on his comments to investigators, Riedel had agreed to eat dinner with Loving at Joey’s North Shore Grill in Gulf Shores that night because she had helped arrange his hotel accommodations, though by Loving’s own statements she became purposefully intoxicated.
To keep Loving from driving under the influence of alcohol, the report says, Riedel offered her one of the two beds in his room, something he would later call a “huge mistake.”
“I made a very bad error in judgment in allowing [redacted] to spend the night in my room. It was done solely out of the intention for her not to drive drunk,” Riedel said. “Nothing happened between the two of us.”
However, based on their statements, Riedel and Loving shared a drink at the same hotel the following night as well, though Loving claimed to have stayed in a separate room with another “friend” not identified in the report.
Other interviews conducted by the Navy show Austal’s management was beginning to get suspicious of the relationship around the same time. While there were rumors of what was going on, statements from Austal’s human resources employees detailed attempts to get more proof before bringing the issue to the Navy’s attention.
During the same week, Riedel was visiting Mobile, Austal employees made an effort to catch him and Loving together after hours — efforts that proved fruitful when their cars were spotted in the parking lot of the Fairfield Inn in Spanish Fort on more than one occasion.
“It’s an inappropriate relationship whether they were sleeping together or not,” Rella told investigators. “The fact that there’s a social familial relationship, where going out in public where people might see my [executive assistant] together with the program manager of a multibillion-dollar program is concerning. People could accuse me of dispatching her to do that.”
Two days after Loving and Riedel shared a hotel room in Daphne, Austal’s management confronted Loving. By the end of the week, she had signed a separation agreement with the company, though she maintained throughout the investigation the entire ordeal was a “dog and pony show” disguising Rella’s plan to “get rid” of her.
“It started coming together as a whole. You know what? He’s getting rid of me,” she said. “I know so much, beyond the girlfriend, beyond the numbers, beyond the false reports, beyond, beyond, beyond, beyond. There’s so much I know, and how better to get rid of me and a [program manager] you hate? How much easier is that, really?”
When the Navy was made aware of the situation days later, an investigation was launched and though “there were concerns that sensitive procurement information may have been compromised,” the report said no evidence suggests (Riedel) used his position to influence any contract decisions.
Riedel was relieved of his position three days after the events described in this report and has since retired from the Navy. Rella resigned as Austal’s president four months after the investigation began and has since started an unrelated company in Bay Minette.
Lagniappe was unable to contact Loving for comment on this report, but according to the Virginia-Pilot online, she has since taken a job out of state. Loving also declined to give a comment for a similar story published last week.
2012 Redacted Navy Report