Cunningham Leaving After Years of Deals - Yahoo! News

By SETH HETTENA and ERICA WERNER, Associated Press Writers


Even in a world that thrives on perks and friendly deals, Rep. Randy "Duke" Cunningham has stood out.

The California Republican and Vietnam War flying ace wasn't a wealthy man when he arrived on Capitol Hill in 1991, but in recent years he has lived like one. His home in Washington was a rent-free yacht provided by a defense contractor. In San Diego, he bought a mansion using the profits from a home sold to the same contractor.

Cunningham, 63, is best known as an emotional lawmaker given to both teary-eyed speeches and flashes of temper. Now his relationship with defense contractor Mitchell Wade is being investigated by a grand jury here after raising eyebrows in Washington.

"It's got to be tempting to allow yourself to be flattered, buttered-up, helped, given favors and so forth," said Gary Jacobson, a political scientist at the University of California, San Diego. "It's hard to refuse them unless you very consciously recognize that it's one of the permanent ethical challenges of that life."

Cunningham's approach to such questions is now being questioned.

The former "Top Gun" flight instructor sold his home in the seaside community of Del Mar to Wade for a price that appears to have been inflated by about $700,000. He used the proceeds to move into a $2.55 million, seven-bath mansion in the exclusive San Diego County community of Rancho Santa Fe.

When in Washington, he lived rent-free on Wade's 42-foot yacht, the Duke-Stir, docked at the private Capital Yacht Club, paying only dock fees and maintenance.

"I should have given more thought to how such a transaction might look to those who don't know me," Cunningham said last month, announcing that he wouldn't be running for a ninth term and that he planned to sell the Rancho Santa Fe house and donate the proceeds to charity.

Even Cunningham's business, Top Gun Enterprises, came under scrutiny for selling $595 Buck knives emblazoned with the image of the congressional seal. The Web site was quickly taken down.

As a member of the House Intelligence Committee and the Appropriations Committee's defense subcommittee, Cunningham had spending and policy control over classified work Wade's company, MZM Inc., did for the military. And MZM's federal contracting work was growing. Last year the little-known company tripled its revenue and nearly quadrupled its staff, according to its Web site.

Cunningham's attorney, Lee Blalack, said the congressman's business dealings were all aboveboard and that allegations that his conduct in office crossed ethical or legal lines are unsupported.

The congressman acknowledges using his role on the Appropriations Committee to push contracts for Wade's company, MZM Inc., along with other firms including ADCS Inc., another company with ties to Wade. Both companies donated generously to Cunningham's campaigns; some MZM employees told the San Diego Union-Tribune that they were pressured to contribute.

The congressman's name also surfaced in a 2002 criminal case in U.S. District Court in San Diego involving a local defense contractor, Science and Applied Technology Inc. The firm's employees, a subcontractor and friends gave more than $30,000 in campaign donations to Cunningham between 1991-1999 to help generate business for SATI's experimental guided missile program, according to court documents.

Contributors were often reimbursed with cash, checks, company funds or inflated billing hours on military contracts, according to an indictment charging SATI's owner, Parthasarathi Majumder. Cunningham was never charged, and a spokeswoman said he cooperated with investigators.

In 2000, Cunningham wrote to prosecutors on behalf of a New York developer convicted in a bid-rigging scheme. The developer, Thomas T. Kontogiannis, later bought Cunningham's 65-foot flat-bottomed riverboat, netting the congressman a $400,000 profit.

A company run by Kontogiannis' nephew and daughter helped Cunningham finance a condominium in Alexandria, Va., and the house in Rancho Santa Fe, and Cunningham reportedly gave Kontogiannis advice on getting a presidential pardon. He was not pardoned.

Cunningham, who became the Vietnam War's first fighter ace after shooting down five enemy aircraft, will be the latest lawmaker leaving under a cloud of ethics questions.

"Is it illegal to have a friendship with someone who has business with the government? And if that's not illegal, then what kinds of relationships are proper or improper? Those are amorphous questions with amorphous answers," said Ron Nehring, Republican Party chairman in San Diego County.

But Nehring added that any elected officeholder should know to err on the side of caution and treat relationships with people doing business with the government as potential conflicts of interests.

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Associated Press writer Erica Werner reported from Washington.