SignOnSanDiego.com > News > Politics -- Cunningham plans legal defense fund

By Toby Eckert
August 20, 2005

WASHINGTON – House Majority Leader Tom DeLay, R-Texas, has one. President Clinton had one. Now embattled Rep. Randy "Duke" Cunningham plans to get one.

When politicians are in trouble with the law, they can turn to a resource that most Americans facing costly legal bills can only dream about: a legal defense fund.

Since 1980, congressional rules have allowed lawmakers to set up the funds and stock them with contributions from many of the same people who give to their campaign funds. The money can then be used to pay for legal expenses associated with their campaigns, their "official duties," criminal prosecution, or civil matters "bearing on the individual's reputation or fitness for office."

Federal authorities and a grand jury have been probing Cunningham's relationship with defense contracting firms MZM Inc. and ADCS Inc. and company executives Mitchell Wade and Brent Wilkes. (MZM was sold this week.)

Wade and Wilkes contributed heavily to the Rancho Santa Fe Republican's campaign funds, and he backed their companies' efforts to gain government contracts. Wade bought Cunningham's Del Mar-area home for $1.675 million in 2003, then sold it shortly thereafter at a $700,000 loss. While in Washington, Cunningham also lived on a yacht owned by Wade docked on the Potomac River.

The eight-term congressman, who has denied wrongdoing but recently announced that he would not seek re-election next year, is awaiting permission from the House ethics committee to establish a defense fund.

"I'm hopeful they'll do something soon," said his attorney, Lee Blalack.

The fund could become crucial to Cunningham because prosecutors have moved to seize his principal asset, a five-bedroom, eight-bath Spanish colonial estate on Via Del Charro in Rancho Santa Fe that he is trying to sell for $3.5 million.

The treasurer of Cunningham's campaign fund also has sought an advisory opinion from the Federal Election Commission about using campaign money for legal expenses. The fund contained $672,114 as of July. (A separate Cunningham political action committee has about $50,000.)

The commission has allowed lawmakers to do so in the past.

Last week, Cunningham sent letters to people who contributed to his campaign fund asking their permission to use their money for his legal defense.

"While details of the grand jury's investigation are unknown, it is clear that the investigation is directly related to Representative Cunningham's conduct as a candidate for federal office and as a federal officeholder," Cunningham's treasurer, Kenneth Batson, wrote in a petition to the FEC.

A defense fund might not be allowed if the legal problem involves a Congress member's private dealings, such as a business transaction that had nothing to do with official duties.

The liberal watchdog group Citizens for Responsibility and Ethics in Washington raised that possibility in objecting to a Cunningham defense fund.

"Because Representative Cunningham has not yet been indicted, it is unknown whether any of the eventual criminal charges filed against him will stem from campaign activity or his status as a federal officeholder," Melanie Sloan, the group's executive director, wrote in a letter to the FEC.

"It seems likely, however, that at least some of the potential charges will not involve such activity."

Blalack said Sloan's "reading of the law is just flat-out wrong" and that the letter "was more of a public relations exercise than a serious legal submission." In an interview, Sloan acknowledged that the FEC was unlikely to turn down Cunningham's request.

Congressional legal defense funds are established as trusts and are administered by a trustee who oversees fundraising. Individuals, corporations and labor unions can donate up to $5,000 a year, although lobbyists and foreign agents are barred from giving. The contributions must be disclosed on a quarterly basis.

Critics see the funds as another example of Washington's culture of clout at work.

"Legal defense funds are another way for special interest groups to try to curry favor with officials in the government," said Craig Holman, a lobbyist for the consumer group Public Citizen. "For the same reason that special interest groups make contributions to campaigns, they make contributions to legal defense funds."

A recent examination by the Center for Public Integrity found that funds set up by five lawmakers had accepted donations from registered lobbyists and foreign agents. The center also discovered that a significant number of quarterly disclosure reports could not be found in the House and Senate offices responsible for maintaining them.

Rules allowing the funds were adopted by the House and Senate in 1980 after several lawmakers were snared in a sting called ABSCAM, in which FBI agents posed as Middle Eastern businessmen seeking political favors in return for bribes.

Some prominent lawmakers have raised substantial sums.

Former House Ways and Means Committee Chairman Dan Rostenkowski, D-Ill., collected $1.3 million while defending himself against charges that he misused public funds. He pleaded guilty to mail fraud in 1996 and served a 17-month prison sentence.

President Clinton's defense fund raised $8 million to cover costs related to the Whitewater investigation and his eventual impeachment in the Monica Lewinsky scandal.

DeLay, who is facing questions about his ties to recently indicted Republican lobbyist Jack Abramoff, has raised $1.09 million since his fund was set up in 2000 to fend off a Democratic lawsuit, which has been settled. Many of his fellow lawmakers – including Cunningham – have contributed to DeLay's fund.

"If a lawmaker remains popular, and powerful, of course, I think you'll see contributions pour into legal defense funds at a pretty good rate," said Steven Weiss, a spokesman for the Center for Responsive Politics, which tracks political spending. "My sense of it is that popularity rules, and not so much guilt or innocence."

Weiss speculated that Cunningham, a member of the powerful House Appropriations Committee, would have little trouble attracting contributions.

"He is still a sitting member of Congress and will be for the next year and a half," Weiss said. "He has been voting on important pieces of legislation and, barring any further developments, will continue to vote in Congress. Because of that there is certainly motivation on the part of donors to support him."