Firm Tied to Convict Aided Rep. Cunningham

By SETH HETTENA

Associated Press Writer

SAN DIEGO (AP) - A company linked to a New York businessman who was convicted in a bid-rigging scheme helped Congressman Randy ``Duke'' Cunningham finance his Arlington, Va., condominium.

Coastal Capital financed the $150,000 mortgage on Cunningham's two-bedroom condominium, according to records on file with the Arlington, Va., Circuit Court. In 2003, Coastal Capital financed $1.1 million in mortgages toward the purchase of Cunningham's seven-bath home in Rancho Santa Fe.

Coastal Capital is run by the nephew and daughter of Thomas T. Kontogiannis, a Long Island developer who pleaded guilty in October 2002 in a bid-rigging, bribe and kickback scheme involving New York City school computer contracts worth millions of dollars.

A federal grand jury is investigating Cunningham's sale of a Del Mar, Calif., home in 2003 to a defense contractor at what may have been an inflated $1.675 million price. Mitchell J. Wade, founder of defense firm MZM Inc., sold the home nearly a year later for $975,000, losing $700,000. Cunningham also lived on Wade's 42-foot yacht, the Duke Stir, docked in Washington, D.C.

Cunningham, an eight-term Republican representing the San Diego area, is a member of the House Appropriations Defense Subcommittee and the Permanent Select Committee on Intelligence.

Cunningham's attorney, K. Lee Blalack, declined comment Friday on the condo sale. Earlier this week, Blalack said ``Duke's business dealings with Mr. Kontogiannis have been entirely proper.''

Kontogiannis did not respond to messages left Friday at his home and work. Earlier this week, Kontogiannis said he bought Cunningham's boat in 2002 and the congressman offered to help him explore getting a presidential pardon, putting him in touch with a Washington law firm and recommending lawyers to speak to.

Kontogiannis paid $600,000 for Cunningham's 65-foot flat-bottom riverboat, the Kelly C. Cunningham purchased the boat from a fellow congressman five years earlier for $200,000.

The Washington Post and Copley News Service disclosed the boat sale and Kontogiannis' financing of the Rancho Santa Fe house Tuesday, but not the aspect of Cunningham's Washington-area condominium.

Property records show Cunningham, a former ``Top Gun'' Navy fighter pilot, bought the 1,400-square-foot unit with a view of the Potomac River in 2002 for $350,000.

Cunningham paid $200,000 in cash for the condo and financed the rest with the mortgage, according to a source close to the congressman who spoke on condition of anonymity. Cunningham bought the condominium when his wife, Nancy, moved to Washington, D.C., for a job in the Bush administration, the source said.

Cunningham sold the condo in March 2004 for $500,000 and retired the mortgage a month later, records show. The buyer, Melanie Dziadulewicz, did not have an Arlington phone listing.

---

Associated Press researcher Julie Reed contributed to this story.