Cunningham wants to use campaign fund for defense cost North County Times - North San Diego and Southwest Riverside County News

By: MARK WALKER - Staff Writer

With his legal defense costs estimated to reach as much as $1.5 million, embattled U.S. Rep. Randy "Duke" Cunningham has asked the Federal Election Commission for permission to use the money in his campaign account to pay the bill.

The 63-year-old Escondido Republican faces mounting legal costs as a team of attorneys defends his dealings with a Washington defense contractor, Cunningham's chief of staff Harmony Allen said Tuesday.

Cunningham is being investigated by a federal grand jury in San Diego that is probing a real estate transaction and other dealings between the congressman and defense contractor Mitchell Wade, owner of the firm MZM Inc.

In a letter received by the commission on Aug. 8, the Friends of Duke Cunningham campaign committee sought a declaration authorizing use of the money donated to him by contributors and political action committees to pay the lawyers.

"Duke has made that request," Allen said, adding that his lawyers have said his expenses could reach the $1.5 million figure.

In its latest filing with the election commission, Friends of Duke Cunningham reported having $672,114 in available cash as of June 30.

In the request, Cunningham stated that he intends to give any money that contributors don't want going to his defense to the National Republican Congressional Campaign Committee. The letter addressed to Lawrence H. Norton, the election commission's chief counsel, was signed by Cunningham campaign treasurer Kenneth Batson.

Cunningham is making the offer to redirect the money people don't want spent defending him because "he believes that's the right thing to do," Allen said.

The Washington, D.C., attorney Cunningham hired in June to represent him, K. Lee Blalack, declined comment when reached at his home Tuesday evening. Blalack, a partner in the firm O'Melvany & Myers, has said a team of lawyers are working for Cunningham. He has refused to disclose the firm's billing rate.

Past election commission rulings have allowed lawmakers to use campaign funds for legal costs arising out of their conduct while in office.

The request comes less than a month after the 50th District lawmaker announced that he will not seek re-election next year, closing out a congressional career that started in 1990.

Controversy arose in June when it was disclosed that Wade paid Cunningham $1.675 million for the congressman's Del Mar Heights home in late 2003. Wade then sold it 11 months later for $975,000 ---- resulting in a $700,000 loss.

Cunningham also stayed aboard Wade's 42-foot boat from April of 2004 until recently, saying he paid more than $13,000 in dock and maintenance fees in lieu of traditional rent.

The grand jury is believed to be investigating whether the dealings between Wade and Cunningham led to the awarding of defense contracts to MZM.

In the last three years, MZM has reported a tripling of its revenues from defense contracts. Cunningham is a member of the House Appropriations Committee and sits on its Defense Subcommittee.

Cunningham has denied any wrongdoing. Nonetheless, he announced last month that he and his wife, Nancy, would sell the $2.5 million estate-style mansion the couple bought in Rancho Santa Fe with the proceeds from the sale of their Del Mar Heights home.

Cunningham also said the couple would donate a portion of the money from the Rancho Santa Fe sale to three charities.

To date, the grand jury has heard testimony from four people associated with the yacht club at the marina where Cunningham stayed aboard Wade's boat, the "Duke-Stir."

Nancy Lifset, the legislative director in Cunningham's congressional office, also has been subpoenaed to appear before the panel. It is not clear if she has already testified.