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

- By SETH HETTENA, Associated press Writer
Saturday, July 2, 2005

(07-02) 14:48 PDT SAN DIEGO, (AP) --

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 the eight-term Republican's San Diego-area home, another for the boat where he has stayed while in Washington, D.C.

Cunningham's lawyer blasted the Friday searches as "an appalling abuse of government power."

FBI agents in San Diego 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 took part in the operations.

Agents also searched the Washington, D.C., offices of defense firm MZM Inc. MZM's founder, Mitchell Wade, bought a home the congressman sold 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.

Debra Weierman, an FBI spokeswoman in Washington, confirmed the boat and office searches; FBI San Diego spokeswoman Jan Caldwell confirmed the search at Cunningham's home in the exclusive community of Rancho Santa Fe. They wouldn't comment further, saying the search warrants were sealed.

Cunningham, a former "Top Gun" Navy fighter pilot and Vietnam War ace, could not be reached for comment, but his attorney, K. Lee Blalack, released a statement Friday afternoon that cast the raids as a bullying tactic.

Blalack said he told the government Thursday that the congressman was going to cooperate fully with a document subpoena issued Tuesday.

"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 spokesman Mark Olson said Saturday that the congressman was in Southern California on a "personal day" and would next be appearing publicly at a pancake breakfast Monday in Encinitas. Olson referred all questions about the investigation to Blalack, who did not immediately return a phone message Saturday.

Cunningham, 63, has said he showed "poor judgment" in selling his home in the town of Del Mar to Wade, who was a friend and campaign contributor.

Wade bought that home for $1.675 million in November 2003. Soon after, he put the house back on the market and it sold after nearly a year for $975,000 — a loss of $700,000 in one of the nation's hottest housing markets.

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

At MZM's headquarters, investigators brought out nine boxes, some labeled "FBI evidence," and put them in a van.

Meanwhile, about 20 agents searched Cunningham's seven-bath, five-bedroom Rancho Santa Fe home for six hours, a Justice Department source said on condition of anonymity.

At the Capital Yacht Club, Commodore Robert McKeon declined comment on the search.

Cunningham has said that instead of rent, he paid at least $13,000 to cover dock fees and other expenses at the yacht 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.

In 2004, MZM tripled its revenue and nearly quadrupled its staff, according to the company's Web site.

Last month, the Defense Department halted orders 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. Earlier this week, MZM announced that James C. King, a retired three-star Army general, was taking over as president and chief executive — a role held for years by Wade, who founded the company in 1993.


Associated Press Writers Erica Werner and Mark Sherman in Washington, D.C., contributed to this report.