More arguments filed in Cunningham case North County Times - North San Diego and Southwest Riverside County News

By: MARK WALKER - Staff Writer

Prosecutors leading a grand jury investigation of U.S. Rep. Randy "Duke" Cunningham argue that their separate civil suit against the congressman must be put on hold to preserve their criminal investigation into allegations of corruption.

In addition, a claim from Cunningham's wife that she is an innocent party in the government's suit to seize a portion of the money from the sale of the couple's Rancho Santa Fe estate home falls short, the prosecutors contend.

In an Oct. 7 court filing, Assistant U.S. Attorney Phillip Halpern argued that Nancy Cunningham is required "to prove that she did not know of the conduct giving rise to forfeiture" rather than simply be unaware of any criminal conduct.


Cunningham, R-Escondido, is the target of a grand jury investigation launched in June following news reports that he and his wife sold their home in Del Mar Heights in late 2003 to a defense contractor for $700,000 more than what the contractor would sell the home for a few months later.

That contractor, Mitchell J. Wade, was a campaign contributor and personal friend of the eight-term congressman. In addition to paying the couple an above-market price for their home, it has been reported that he also provided Cunningham with a 42-foot boat to stay aboard rent-free while in Washington, D.C.

During the same time period, the company founded by Wade, MZM Inc., saw its defense contracts soar.

Cunningham is a member of the House of Representatives Appropriations Committee and its Defense Subcommittee.

In mid-July, Cunningham announced he would not seek re-election and would sell the Rancho Santa Fe property purchased for $2.5 million following the sale of the Del Mar Heights home. He has denied any wrongdoing.

The assertions from the government are included as part of its motion to stay the forfeiture proceedings pending resolution of the ongoing San Diego grand jury investigation.

Halpern wrote that the government has no problem with the Cunninghams selling the Rancho Santa Fe property and purchasing another home, provided that the couple agree the government can attach a lien on the new home.

That prompted the U.S. attorney's office to file a lien on the property, contending it was purchased in part with money that Cunningham "demanded and received" from Wade in the form of a bribe.

Rep. Cunningham's attorneys argue that the home sale should be allowed to proceed and that the civil case involving the home should go forward, and that his attorneys should be allowed to question government investigators.

But the U.S. attorney says the discovery process associated with the civil case could reveal information pertinent to the criminal investigation.

"This court must stay the underlying civil forfeiture proceedings if it determines that civil discovery will adversely affect the ability of the government to conduct a related criminal investigation or the prosecution of a related criminal case," Halpern wrote in his motion to the court.

Efforts to reach the couple's attorneys for comment were unsuccessful.

U.S. District Judge Dana Sabraw is expected to rule in a matter of days on the government's effort to stay the civil suit.