10News.com - News - Cunningham Deals With Another Headache

Latest Revelation Involves IRS

POSTED: 4:51 pm PDT July 29, 2005
UPDATED: 5:09 pm PDT July 29, 2005

SAN DIEGO -- While U.S. Rep. Randy "Duke" Cunningham has already announced he is stepping down and will not run for office again, the firestorm over his wheeling and dealing continues to unfold.

The latest revelation involves a deal to provide the Internal Revenue Service with software to conduct audits on insurance companies.

A San Diego company won the contract even though it had no accounting background.

James Kavanagh's company was contracted to help with the software.

"We developed the software the government used and we never got paid for it," Kavanagh, with Integrated Acturial Services, said.

Kavanagh said he's owed $3 million for that software program.

Millions more were given to First Auditors, which awarded the contract with Cunningham's help.

First Auditors is now in bankruptcy.

Tax records obtained by 10News show that First Auditor's employees Michael Dicks, Kenneth Noorigian and a lobbyist for the company, Steven Amitay, also contributed $9,600 to Cunningham's campaign.

Cunningham wrote to the IRS saying he supported First Auditors bid, telling the agency "I would like to request a meeting with you on behalf of my constituents, the principals of First Auditors." Cunningham added he was "anxiously" watching the deal.

As a result of his support, there was an appropriation made, 10News reported.

Kavanagh's company, Integrated Actuarial Services, said they were taken and want the courts to find out where the money went.

"We wanted to expand the receivership to find out where all the missing millions went that we were supposed to get paid," Kavanagh said.

But the courts are limited in what can be done, leaving Kavanagh's company on the losing end for now.

The congressman has always maintained he's done nothing wrong.

As for First Auditors, they blame IRS mismanagement for the job never being completed.