Pentagon official tells press Cunningham pressured him to award contract North County Times - North San Diego and Southwest Riverside County News

By: WILLIAM FINN BENNETT - Staff Writer

Embattled U.S. Rep. Randy "Duke" Cunningham, R-Escondido, pressured the Department of Defense to steer business to Poway defense contractor ADCS Inc., according to a Defense Department official.

Assistant Deputy Undersecretary of Defense Louis A. Kratz, who in 1999 had called for a government audit of ADCS, told The Washington Post in an article published Thursday that Cunningham and ADCS owner Brent Wilkes had called him in an effort to influence his office to direct federal dollars to ADCS for a contract it held to provide computer services for a government project.

Kratz could not be reached for comment Thursday. A separate source close to the ongoing federal investigation of Cunningham's financial ties to a defense contractor confirmed for the North County Times that Cunningham had written a letter to the Defense Department in an attempt to secure the work for ADCS.


The ADCS contract and others later became the target of an audit by the Office of the Inspector General after competing firms alleged that the government had used favoritism and acted inappropriately in awarding the contracts, according to a copy of the audit report obtained by the North County Times. The report, issued in 2000, also stated that two unnamed members of Congress had pressured the Defense Department to fund work by a company to digitalize engineering documents on the Panama Canal.

While the audit report does not mention ADCS by name, it describes the work that the firm was performing on documents related to the Panama Canal. A 1999 North County Times article also reported that ADCS had received a contract to create a digital stockpile of Panama Canal engineering documents.

But the eight-term Escondido congressman's efforts to help ADCS apparently didn't end with a letter. Kratz, the Defense Department official who later called for the Inspector General's probe, told the Post he had never before seen such "meddling" and "arrogance" as he had seen in their intervention.

Since 1997, ADCS employees and Wilkes have donated $21,000 to Cunningham's campaign coffers. Between 2000 and 2004, the company received nearly $76 million in federal contracts, many related to defense.

In addition, between 2001 and 2003, Cunningham made several trips on a private jet that is partially owned by an ADCS sister company, Group W Transportation. Cunningham paid the company the equivalent of what he would have paid for first-class tickets on commercial airlines for those trips, making the trips legal. Congressional watchdogs have long complained that such travel arrangements exist in order to curry favor with powerful members of Congress.

Cunningham's Washington-based attorney, K. Lee Blalack, said Thursday that he could not speak to the specifics of the audit report, but said "there is nothing inappropriate or unusual about a member of Congress calling the Pentagon on behalf of a constituent regarding the use of appropriated funds."

"It seems to me this is a classic 'dog bites man' type of story," he added.

An official with ADCS declined comment Thursday and referred all calls to the company's attorneys, Michael Lipman and Barbara Murray. Reached by phone Thursday, Murray said she would not have any comments other than those made by her office in a Wednesday news release. The statement, issued in response to Tuesday's federal raid, said: "ADCS is cooperating with the government and is providing requested information. ADCS strongly believes that all of its actions have been proper and appropriate."

On Tuesday, federal agents with the FBI, IRS and the Defense Department's Criminal Investigative Service served search warrants at ADCS' Poway headquarters and company owner Wilkes' home. The federal agents are reported to have removed boxes of documents from the company.

The raids mirrored searches made by the same federal agencies in early July, as part of an ongoing federal grand jury investigation into Cunningham's ties to Washington defense contractor MZM Inc. and its owner, Mitchell Wade. Search warrants were served at Cunningham's Rancho Santa Fe home, MZM offices in Washington and a 42-foot Washington yacht owned by Wade on which Cunningham had lived for more than a year.

The grand jury is believed to be looking into at least two connections between Cunningham and Wade: Cunningham's sale of his Del Mar Heights home to a company owned by Mitchell, for a price that is believed to have been hundreds of thousands of dollars above market rate; and Cunningham's rent-free living arrangements aboard Mitchell's yacht.

Cunningham used the profits on the sale of that home to buy a Rancho Santa Fe estate for $2.55 million. The grand jury is believed to be investigating whether Cunningham used his position as a member of the powerful House Appropriations Subcommittee on Defense to steer business to MZM in exchange for favors.

The federal government is now trying to seize that property under the pretext that it was purchased with money from an alleged bribe.

On July 14, Cunningham cited the federal grand jury investigation and the stress it was creating on his family in announcing he would not seek re-election to his 50th Congressional District seat. The congressman has consistently denied any wrongdoing.