Four From Washington Yacht Club Subpoenaed In Cunningham Probe

Last Updated:
07-14-05 at 11:47AM

(AP) - Two members and two employees of a Washington, D.C., yacht club where Rep. Randy "Duke" Cunningham lived aboard a defense contractor's boat have been subpoenaed to testify before a federal grand jury in San Diego investigating the congressman, according to a person with knowledge of the plans.

The four who are flying to San Diego to testify Monday are the first witnesses known to be appearing before the federal panel that is gathering evidence on the eight-term Republican from Del Mar and his dealings with defense contractor MZM Inc.

Dockmaster Kelvin Lee is among the four witnesses from the Capital Yacht Club, according to the person with knowledge of the subpoenas, who spoke on condition of anonymity. Lee declined to answer questions Wednesday. The club's commodore, Robert McKeon, who was not among the four named as witnesses, also declined comment.

Cunningham lived part-time at the Capital Yacht Club aboard a 42-foot yacht owned by Mitchell Wade, founder of the defense firm MZM Inc. Coast Guard records show Wade bought the boat from Scott F. Schramm, who is listed as the yacht club's rear commodore. Schramm did not return a message left seeking comment.

The congressman has said that instead of rent, he has paid at least $13,000 to cover dock fees and other expenses at the club since April 2004. Cunningham has yet to make good on his promise last month to divulge additional records on the boat payments. Living on Wade's boat for free would violate congressional ethics rules.

Cunningham's attorney, Lee Blalack, declined to comment on the yacht club subpoenas. A spokeswoman for U.S. Attorney Carol Lam in San Diego did not return a message

The yacht, which had been docked at the Capital Yacht Club, left its moorings Wednesday and was moving out of state, said a person with knowledge of the Duke Stir and who also spoke on condition of anonymity. That person said Wade had decided to sell the boat since Cunningham was no longer aboard and members of the private club had complained about the unwanted attention the Duke Stir was drawing.

The boat began drawing attention following last month's disclosure that Wade had purchased Cunningham's Del Mar home in 2003 for what may have been an inflated $1.675 million price. Wade sold it nearly a year later for $975,000 - a $700,000 loss in one of the nation's hottest housing markets.

After the story broke, Cunningham was living for a short while out of his congressional office - not an uncommon practice on Capitol Hill - but had since found an apartment, Blalack said.

Last month, FBI agents searched the Duke Stir, the offices of MZM, as well as Cunningham's current home, a $2.55 million mansion in the exclusive community of Rancho Santa Fe. The federal grand jury subpoenaed documents late last month from Cunningham.

The U.S. attorney's office in Washington, D.C., is also investigating Cunningham and Wade, said Channing Phillips, a spokesman.

Phillips declined to comment when asked if a second grand jury in Washington had been impaneled, but did say that prosecutors in his office's fraud and public corruption section were looking into the matter. Criminal investigators with the Defense Department and the Internal Revenue Service have also opened inquiries.

He said that the U.S. attorney's office in Washington had asked Defense Department agencies that did work with MZM to stay all Freedom of Information Act requests until the conclusion of the investigation.


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