According to several sources, Schnell was fired for sexually harassing male sailors. One former crewmember with continued ties to the Peleliu says Schnell had a reputation for preying on young enlisted men. Reportedly, the skipper regularly “rewarded” potential targets with chits entitling them to a day off from duty, along with a private lunch with Schnell himself in the Inport Cabin. Schnell described these tete-a-tetes as “the highlight of my week.” Each “Sailor of the Week” was offered niceties not otherwise enjoyed on board ship. “The CO had a type,” one observer reports. “He liked them boyish and slim.” In one glowing internal newsletter, Schnell wrote of one honoree, “I could not be more pleased with [name deleted]’s performance.” The young sailor was allowed to bring a friend of his choosing. Schnell wrote: “This is really for my benefit of course....”
“Word on board ship was, do NOT set yourself up for this honor,” wrote one source.
According to another source, a group of junior officers reported Schnell for sexual harassment. The investigation did not take long.