FBI searches San Diego-area Rep. Randy 'Duke' Cunningham's home

By Associated Press
Saturday, July 2, 2005 - Updated: 08:51 AM EST

SAN DIEGO - Federal authorities intensified their investigation into Rep. Randy ``Duke'' Cunningham's dealings with a defense contractor by simultaneously serving search warrants on both coasts - one for his California home and another for a yacht where he has stayed while in Washington, D.C.

Cunningham's lawyer called the searches ``an appalling abuse of government power.''

FBI agents Friday searched Cunningham's $2.55 million mansion outside San Diego and a 42-foot yacht named Duke Stir, according to a bureau spokeswoman, who said agents from the Department of Defense and Internal Revenue Service assisted.

Authorities also searched the Washington, D.C., offices of defense firm MZM Inc. MZM's founder, Mitchell Wade, bought a home from the congressman in 2003 at what may have been an inflated $1.7 million price. Wade also owns the boat docked on the Potomac River where Cunningham said he has lived part-time since April 2004.

Cunningham could not be reached for comment Friday, but his attorney, K. Lee Blalack, released a statement saying he told the government Thursday the congressman is going to cooperate fully with the investigation.

``They will apparently not take 'yes' for an answer and have instead opted to use strong-arm tactics that were designed to generate headlines,'' Blalack said.

Cunningham, 63, a former Navy ``Top Gun'' fighter pilot and eight-term Republican congressman, has said that he showed poor judgment in selling the house, but he acted honestly and predicted that an investigation would prove that.

After buying the 3,826-square-foot house north of San Diego in 2003, Wade put it back on the market and eventually took a $700,000 loss when he resold it a year later. During that span, home prices in San Diego County rose an average of nearly 25 percent.

Meanwhile, MZM Inc. was increasing its federal contracting business. In 2004, MZM tripled its revenue and nearly quadrupled its staff, according to its Web site.

Cunningham is a member of the House Appropriations Defense Subcommittee and the Permanent Select Committee on Intelligence, both of which oversee the kind of classified intelligence work MZM does for the military.

The U.S. Attorney's Office in San Diego is investigating the house sale with help from the FBI. Earlier this week, Cunningham's office disclosed that a federal grand jury has subpoenaed documents from him, though they declined to elaborate further.

Regarding his time on Wade's yacht, Cunningham has said that he agreed to pay dock fees and service and maintenance costs in lieu of rent. Living on Wade's boat without paying would violate congressional ethics rules.

The Defense Department halted orders this month on a five-year contract that provided MZM with $163 million of revenue over its first three years after the department's inspector general found that it did not satisfy rules on competitiveness.

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