A mere 25 days before he was to become the Navy’s top officer, Adm. Bill Moran announced Sunday that he will retire.

In a prepared statement provided to Navy Times, Moran said that he won’t become the next chief of naval operations and instead will retire due to “an open investigation” into emails he exchanged with a retired former staffer “who had while in uniform been investigated and held accountable over allegations of inappropriate behavior.”

Multiple senior Pentagon officials confirmed that the former officer is Chris Servello, who investigators previously found had behaved inappropriately with female colleagues in 2016 while dressed as Santa Claus at a boozy Pentagon holiday party.

The imbroglio filled with tawdry shenanigans later was tagged by senators as the “Bad Santa” scandal.

“My decision to maintain this relationship was in no way an endorsement or tacit approval of this kind of conduct,” Moran said. “I understand how toxic it can be to any team when inappropriate behavior goes unrecognized and unchecked. Every sailor is entitled to serve in an environment free of harassment or intimidation.”

Moran was nominated for the CNO position in April and nothing tied to his communications with Servello arose during his Senate confirmation hearing that month.

Servello declined to comment regarding his relationship with Moran but said in a statement Sunday that “it was hard not to feel disappointment and disbelief” about the admiral’s downfall.

“This is terrible news for the Navy,” he said.

No criminal charges were filed against Servello in connection to the Christmas party and he retired after receiving a career-ending reprimand.

In a statement Sunday, Navy Secretary Richard Spencer said Moran’s continued professional relationship “with an individual who was held accountable and counseled for failing to meet the values and standards of the Naval profession” called Moran’s judgment into question.

The current CNO, Adm. John Richardson, can stay on the job until mid-September if needed, but any extension beyond that would require action from Capitol Hill.

A career aviator, Moran has served for nearly 39 years. He apologized to Spencer and President Donald J. Trump for the inconvenience his decision causes.

“As painful as it is to submit my request to retire, I will not be an impediment,” he said in the statement. "I believe in the institution. And I believe I am doing right by it.”

Email communications between Servello and Moran uncovered during an ongoing probe by the Department of Defense’s Inspector General forced Spencer’s move, senior Pentagon officials told Navy Times.

The Navy’s second-highest uniformed position was filled on June 10, when Adm. Bob Burke relieved Moran. Moran had been working with his transition team on assuming the CNO’s position before his abrupt announcement to retire.

Moran was poised to become only the fifth of 39 VCNOs to relieve the CNO as the Navy’s top officer and he was championed by supporters who insisted he was uniquely qualified to do the job.

As the Navy’s top personnel officer between 2013 and 2016, Moran unleashed a stream of reforms designed to drag the Navy’s human resources system into the 21st century.

Moran’s ambitious “Sailor 2025” program not only moved to modernize the Navy’s entire personnel system and training process but also was designed to change the culture of the sea service by embracing flexibility, rewarding merit and scrapping broad purges of sailors like the despised Enlisted Retention Board.

The “Bad Santa” Christmas party has become the unwanted gift that keeps on giving for the Navy’s top brass.

A Pentagon probe last year into how CNO Richardson handled sexual misconduct allegations against Servello cleared him of official wrongdoing but found he could have replaced the staffer in a timelier manner.

The IG report analyzed how Richardson tackled the removal of Servello as his spokesman in the wake of the 2016 Pentagon holiday party.

It featured a tipsy Servello bedecked in a Santa Claus suit allegedly pawing at coworkers. Eventually, investigators reported three female Navy officers had accused Servello of misconduct.

But while Richardson said he decided to remove Servello as his main public affairs officer in April of 2017, he failed to act on it until that August, days after journalists began requesting documents tied to the allegations.

By failing to remove Servello quickly, the Navy’s top officer “sent the wrong message about how seriously ADM Richardson took the allegations of sexual harassment,” investigators concluded.

Richardson agreed, telling lawmakers at a hearing that the scandal required a “thorough investigation into a complicated scenario” involving “allegations and counter-allegations,” but that his “radar has been completely re-tuned” by the incident and its fallout.

“I’ve become acutely aware that that may have sent a bad message, particularly to the survivors of the behaviors,” Richardson said.

The Pentagon IG probe commenced in late 2017, after 2020 presidential candidate and U.S. Sen. Kirsten Gillibrand — long a critic of the military’s handling of sexual assault cases — demanded an investigation into “who knew what, when, and why no action was taken to remove the alleged offender (even temporarily) from such an important, public position.”

Servello’s name is not included in the report but he has confirmed his role in the scandal. He told Navy Times in April of 2018 that no charges were ever filed and allegations and statements made about him were “in some cases just plain wrong.”

The demise of Adm. Moran is the latest setback for a Pentagon in flux.

The department has been without a permanent defense secretary since retired Marine Gen. James Mattis stepped down in December during a dispute with the White House over policies in Syria and other global hot spots.

Acting Defense Secretary Pat Shanahan took the helm of the Pentagon for six months, but he abruptly withdrew from consideration to become the permanent replacement to Mattis on June 18, following questions about his handling of a domestic abuse case involving his family.

Navy officials believe that Secretary Spencer will act quickly and send his next CNO nominee to Shanahan’s replacement as early as next week.

But Acting Defense Secretary Mark Esper — who had been the Army secretary — has yet to see his nomination sent to the Senate by the White House.

In the coming months, the Chairman of the Joint Chiefs of Staff, Marine Gen. Joseph Dunford, and his vice chairman, Air Force Gen. Paul Selva, also are slated to retire.

Their replacements — Army Gen. Mark Milley and Air Force Gen. John Hyten — await confirmation hearings of their own.

Geoff is the editor of Navy Times, but he still loves writing stories. He covered Iraq and Afghanistan extensively and was a reporter at the Chicago Tribune. He welcomes any and all kinds of tips at geoffz@militarytimes.com.

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