CunningScam

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2007-04-10T20:26:00.000-04:00

USATODAY.com - Corrupt congressman's loot auctioned off for nearly $95,000

2006-03-23T21:28:00.000-05:00

RANCHO DOMINGUEZ, Calif. (AP) — The silver-plated candelabras went for $2,000. An armoire with beveled mirrors pulled in $4,000. And a marble-topped night stand sold for $1,250.
Piece by piece, the furniture, rugs and other high-end home furnishings that former Rep. Randy "Duke" Cunningham accepted as bribes were auctioned off by the government Thursday, bringing in $94,625. (Related video: Spoils of scheme for sale)

Cunningham, a Republican, was sentenced earlier this month to more than eight years in federal prison for tax evasion and conspiracy, the longest term meted out to a congressman in decades. Prosecutors said he collected $2.4 million in bribes from defense contractors in exchange for steering government contracts and other favors their way.

The auction took place in a cavernous warehouse near Los Angeles. The money will be split by the Internal Revenue Service and the FBI.

An elaborately patterned, Oriental-style rug from Cunningham's former mansion sold for the highest price, $10,000. A second one was purchased for $9,000. A French Provincial walnut armoire, with carved feet, fetched $7,100.

But some furnishing came cheaper. A wash stand was sold for $400. A leaded-glass lamp went for $850.

Cunningham was also ordered to pay $1.8 million in restitution for back taxes and to forfeit an additional $1.85 million for cash bribes he received, plus hundreds of thousands from sale of the mansion.

The former congressman sold a Rolls-Royce — one of the bribes — before he was indicted. He also transferred ownership of a yacht, another illegal gift from contractors.

Ex - Congressman's Loot to Be Auctioned - New York Times

2006-03-22T16:11:00.000-05:00

RANCHO DOMINGUEZ, Calif. (AP) -- Silver-plated candelabras. A cedar-lined lingerie cabinet. Persian rugs. An oak hutch carved with lions' heads, tree limbs and acorns.

The spoils from former Rep. Randy ''Duke'' Cunningham's bribery scheme -- a household of valuable antiques, rugs and home furnishings -- will be auctioned off by the government Thursday to help cover the back taxes and restitution he owes.

The public was given a preview Tuesday of the loot, which was laid out in orderly rows in a warehouse near Los Angeles.

Cunningham, who was sentenced earlier this month to more than eight years in prison for taking $2.4 million in bribes, received the items from defense contractors in exchange for helping them win government contracts.

''Lavish,'' said Jim Sudomir, a retiree from Fallbrook, summing up Cunningham's lifestyle as he looked over the display. ''If he was going to be a crook he should have been a smarter one. He thought he was above all that. ... Look where he's at now. He's in jail.''

The inventory reveals that the contractors spared little expense to appease Cunningham's collector's tastes.

There is a leather sofa. A solid cherry sleigh bed. Nearly a dozen rugs. Marble-topped nightstands, armoires and sideboards, many featuring stained glass, brass fittings and intricate carvings.

''There's a real mix of different styles -- Art Deco, French provincial, American pioneer,'' said Britney Sheehan, who works for the company that will auction the goods.

Sheehan said she could not disclose how much the items are expected to fetch, since officials do not want to influence potential bidders. Some of the rugs have previously been valued at as much as $40,000.

Anyone but Cunningham can bid.

Cunningham's prison term was described by attorneys for both sides as the longest prison sentence ever given to a member of Congress. The scale of the corruption scheme is unmatched in the annals of Congress.

The former congressman was ordered to pay $1.8 million in back taxes and forfeit an additional $1.85 million for cash bribes received, plus the proceeds from the sale of his mansion in Rancho Santa Fe, one of America's wealthiest communities. The furnishings came from the home.

Cunningham sold a Rolls-Royce -- one of the bribes -- before he was indicted. He also transferred ownership of a yacht, another illegal gift from contractors.

Watchdogs say House muzzling staffers North County Times - North San Diego and Southwest Riverside County News

2006-03-08T09:10:00.000-05:00

By: WILLIAM FINN BENNETT - Staff Writer

Two congressional watchdog groups are accusing House leaders of trying to minimize the ethics scandals plaguing Washington Republicans by muzzling staffers who worked for former U.S. Rep. Randy "Duke" Cunningham, who resigned after admitting he took millions in bribes.

When the North County Times requested interviews last week with two of Cunningham's former staffers, the workers said they were under orders from the House clerk's office not to speak to reporters.

"I am not allowed to talk to the press; because of the clerk, I can't give interviews," Cunningham's former chief of staff Harmony Allen said last week when questioned about how the scandal has affected the lives of the fallen congressman's former staff members.

A House policy prohibits staff members in a vacated office from speaking with the press without approval from the clerk, said Jon Brandt, a spokesman for the Committee on House Administration. He later e-mailed a copy of that policy to the North County Times.

Brandt said that because interviews with former Cunningham staffers could touch on areas relating to the business of the 50th Congressional District office at the time it was under Cunningham's command, "the decision has been made that no" interviews will be allowed, he said.

Brandt said the rule has existed since before Republicans become the majority in the House in 1995.

"We are not trying to be (uncooperative), it's just standard operating procedure," Brandt said.

He said that once a replacement takes office in the 50th District, staffers would be free to speak to the press.

A spokesman for Washington-based congressional watchdog group Public Citizen said he believed House Republican leaders were inappropriately restricting access to the press and thus cheating the public of learning more about Cunningham's conduct in office.

"This is a self-serving political gag order and designed to protect the image of the House and specifically Republican members," said Craig Holman of the group, described as a nonprofit organization that "advocates" for consumers.

After Cunningham resigned from office late last year and pleaded guilty in federal court to bribery and tax evasion, most of his staff members continued to work at the 50th District office, which represents a stretch of North County from Escondido to Del Mar.

But once Cunningham, a Vietnam War ace, stepped down, the House of Representatives' office of the clerk took over the management of his office. Former Cunningham staffers may continue to work in that office until a temporary replacement is elected this spring to serve out the remainder of the term, which is up in December.

Brandt said that those who ignore orders not to speak with the press would have to face the consequences.

"If they violate (the) policy, that is their decision and they will have to answer to the clerk's office," Brandt said.

Holman said that before Cunningham's guilty pleas it clearly was appropriate to prevent staffers from speaking with the press on the ground that the criminal investigation might be jeopardized.

But once Cunningham entered guilty pleas, everything changed, Holman said.

On Monday, a spokeswoman for another Washington watchdog group echoed Holman's statements.

"By denying transparency, which is a purported goal of this Congress, through restricted access to (former U.S.) Rep. Cunningham's staff, the committee has eliminated any chance for insight into the inner workings of Cunningham's office of corruption," said Naomi Steiner, a spokeswoman for Citizens for Responsibility and Ethics in Washington, a group that uses the legal system to go after politicians they label as corrupt. The group is led by a former federal prosecutor who worked for several Democratic House members prior to joining the U.S. attorney's office in Washington, D.C.

Cheney Mum About GOP Senate Candidate - CBS News

2006-03-08T00:01:00.001-05:00

(CBS/AP) When Vice President Dick Cheney went campaigning in Florida on Monday, there were two words conspicuous by their absence: Katherine Harris.

"As vice president, I look forward to the opportunity to swear in a new Republican senator to serve next to Mel Martinez in the United States Senate," Cheney said during a re-election luncheon for Rep. Clay Shaw in Boca Raton. He didn't mention Harris, a Florida Congresswoman who's regarded as the front-runner in the race for the Republican nomination to run against incumbent Democrat Bill Nelson in November.

Later Monday, speaking to a crowd of Collier County Republicans in Naples — and with Harris in the audience — Cheney again avoided mentioning her.

Cheney's failing to name Harris specifically as that "new senator" at a pair of events is triggering questions about the condition of Harris' campaign.

Last week, Harris responded to claims that she had accepted campaign funds in 2004 that were illegally donated through embroiled defense contractor Mitchell Wade. On March 2, Harris released a statement saying she was unaware that accepting contributions associated with Wade, who pleaded guilty to bribery in the Rep. Randy "Duke" Cunningham, R-Calif., case, was illegal.

Wade said that at a 2005 dinner with Harris, the two discussed a possible fundraiser for her as well as obtaining funding for a Navy counterintelligence program involving his company. The plan also called for a location in Harris' district.

Harris explained that she "requested a $10 million appropriation for the U.S Naval Criminal Investigative Services project" because she thought "it would bring new jobs to Sarasota.

"I never requested funding for this project in exchange for any contributions, but rather to bring more high-skill, high-wage jobs to the region," she insisted.

In an apparent effort to scale back her public appearances during the controversy, Harris canceled a number of campaign stops, the Sarasota Herald-Tribune reported. GOP consultant David Johnson told the paper that, "It looks like her campaign is circling the wagons."

But spokesperson Morgan Dobbs denies that Harris is slowing down or plans to leave the race, telling CBSNews.com that Harris "remains undaunted in her quest to represent the people and issues she cares about most in the United States Senate."

In a Quinnipiac University poll released in late February, Harris trailed Nelson by 53 percent to 31 percent.

It's not certain whether Cheney's failure to mention Harris by name was a deliberate attempt to distance himself and the GOP from her as she is entangled in scandal, or simply an unintentional oversight

"Cheney is not the most skilled campaigner when it comes to retail politics," Hotline senior editor John Mercurio says, adding that the non-mention of Harris "doesn't necessarily reflect Republican sentiments" toward her.

However, Mercurio points out, "things couldn't possibly be going worse" for Harris, and there may be "reluctance on the part of the White House to say Katherine Harris will be the next senator because her campaign is in disarray."

The fact that Cheney left Harris out of his speech is "in and of itself not significant," Mercurio explains, but the perception of it seems to be.

When asked how Harris reacted to being omitted from Cheney's comments, Dobbs noted that Harris was at the Naples event with the Vice President and that she rode back to Washington with him on Air Force 2. "It is always an honor to be invited to appear with the Vice President of the United States," Dobbs added.

NBCSandiego.com - News - Cunningham's Life About To Change Again

2006-03-08T00:01:00.000-05:00

SAN DIEGO -- Life for Randy "Duke" Cunningham has changed, of course, and it is about to change again.

The corrupt former congressman, who was sentenced to eight years and four months in prison for bribery, is currently staying at San Diego's Metropolitan Correctional Facility.

There are modest amenities provided to Cunningham at the facility, but he is not able to move around, and he has only the basics available to him in his cell.

"Toilet and a bed," attorney Knut Johnson told NBC 7/39. "There'll be other prisoners in that little quad, and sometimes they'll communicate by shouting back and forth to each other."

Because Cunningham's meals are brought to him, he does not go to a common dining area. He has already had a medical checkup and talked with a psychologist.

The disgraced congressman's stay in San Diego will be over soon. At some point in the next three days, he will be sent to a federal facility for a medical evaluation, and when those results are determined, he will be sent to a federal prison, possibly one in Taft, Calif..

If that destination is Taft, which his attorneys requested, he will be incarcerated with people who have been convicted of -- among other things -- fraud and possibly alien smuggling. Some prisoners at Taft have been transferred from higher-security prisons because of good behavior.

Johnson has provided advice and information to people headed to federal prison.

"You have to take a breath and relax, and understand that -- particularly someone in Duke Cunningham's position -- they're not going into a prison with a lot of violent and dangerous prisoners," said Johnson.

With good behavior, Cunningham could be out of custody in seven years and one month.

Former Congressman Gets Eight-Plus Years - Yahoo! News

2006-03-03T18:51:00.000-05:00

Former Rep. Randy "Duke" Cunningham, who collected $2.4 million in homes, yachts, antique furnishings and other bribes on a scale unparalleled in the history of Congress, was sentenced Friday to eight years and four months in prison, the longest term meted out to a congressman in decades.

Cunningham, who resigned from Congress in disgrace last year, was spared the 10-year maximum by U.S. District Judge Larry Burns but was immediately taken into custody. He also was ordered to pay $1.8 million in restitution for back taxes.

Cunningham accepted money and gifts including a Rolls-Royce, a yacht and $40,000 Persian rugs from defense contractors and others in exchange for steering government contracts their way and other favors.

Federal prosecutors sought the maximum and his attorneys asked for mercy, but Cunningham, choking up as he addressed the judge, focused on accepting blame. "Your honor I have ripped my life to shreds due to my actions, my actions that I did to myself," he said.

"I made a very wrong turn. I rationalized decisions I knew were wrong. I did that, sir," Cunningham said.

Much thinner than when he pleaded guilty in November — he said he has gone from 265 pounds to 175 pounds since June — Cunningham had asked to see his 91-year-old mother one last time before going to prison, but was denied.

The judge, while crediting Cunningham for his military service and for taking responsibility, questioned why he felt compelled to betray his constituents and his colleagues for luxuries.

"You weren't wet. You weren't cold. You weren't hungry and yet you did these things," Burns said. "I think what you've done is you've undermined the opportunity that honest politicians have to do a good job."

The staggering details of Cunningham's wrongdoing surpass anything in the history of Congress, Senate and House historians have said. "In the sheer dollar amount, he is the most corrupt," said Deputy House Historian Fred W. Beuttler.

The longest term meted out to congressmen in the past four decades had been eight years, handed to former Rep. James Traficant, D-Ohio, in 2002 for taking payoffs, and to former Rep. Mario Biaggi, D-N.Y., in 1988 for extorting nearly $2 million from a defense contractor.

Prosecutor Phil Halpern told the judge that while Cunningham was living the good life "he was squandering precious tax dollars for, among other things, systems the military didn't ask for, didn't need and frequently didn't use."

Cunningham's attorney Lee Blalack asked for six years for the former Navy "Top Gun" flight instructor and Vietnam War flying ace.

Cunningham, 64 and a congressman for 15 years, rubbed away tears while Blalack addressed the court. He appeared to be crying quietly when Blalack referred to his wartime service.

"There are men in this courtroom who are walking around and breathing because Duke Cunningham put his life at risk," Blalack said. "There is no doubt that all of the good that he did in those many years will be washed away."

The courtroom, which seats about 100, was packed. Among those in the gallery was Rep. Duncan Hunter (news, bio, voting record), R-Calif., chairman of House Armed Services Committee, whose district, like Cunningham's, is in the San Diego area.

Blalack said that given Cunningham's age and history of prostate cancer, "there is a significant likelihood" he would not survive a 10-year sentence, and that he already has suffered greatly.

"This man has been humiliated beyond belief by his own hand. He is estranged from those he loves most and cares most about," Blalack said. "All his worldly possessions are gone. He will carry a crushing tax debt until the day he dies. He will go to jail until he's 70 years old."

Prosecutor Jason A. Forge said Cunningham should not get a break for committing crimes late in life, and doubted his apparent remorse, pointing out that after the allegations emerged he spent months falsely denying them.

"The fact of the matter is Mr. Cunningham went down kicking and screaming. He did not plead guilty until his indictment was imminent," Forge said.

Cunningham pleaded guilty Nov. 28 to tax evasion and a conspiracy involving four others. The plea came amid a series of GOP scandals: Rep. Tom DeLay of Texas had to step down as majority leader after he was indicted in a campaign finance case; a stock sale by Senate Majority Leader Bill Frist is being looked at by regulators; and Vice President Dick Cheney's chief of staff was indicted in the CIA leak case.

The case against Cunningham began when authorities started investigating his sale of his Del Mar house to defense contractor Mitchell Wade for $1,675,000, a price inflated by $700,000.

Wade admitted giving Cunningham more than $1 million in gifts, including a yacht, cash, cars, antiques and meals. He pleaded guilty last month to conspiring with Cunningham, among four corruption charges that carry a maximum prison term of 20 years.

AOL News - Katherine Harris Caught Up in Bribery Scandal

2006-03-03T16:44:00.000-05:00

TAMPA, Fla. (March 3) - U.S. Rep. Katherine Harris said Thursday she did not knowingly do anything wrong in her associations with a defense contractor who prosecutors say illegally funneled thousands of dollars to her campaign in 2004.

Questions about the donations have arisen as Harris, the former Florida secretary of state who oversaw the 2000 presidential election recount, tries to unseat U.S. Sen. Bill Nelson, D-Fla.

The donations were described in a plea agreement last Friday, when Mitchell Wade, the former president of MZM Inc., pleaded guilty to bribing U.S. Rep. Randy "Duke" Cunningham in exchange for assistance in getting $150 million in Defense Department contracts for his company.

He also admitted making illegal campaign contributions in the names of MZM employees and their spouses to Harris and Rep. Virgil Goode, R-Va. Prosecutors said Harris got $32,000 from employees who were reimbursed by Wade. Harris said she recently donated the money to charity, and didn't know the donations would be reimbursed.

In the plea agreement, Wade acknowledged dining with Harris at a Washington restaurant in 2005 to discuss a possible fundraiser for her and obtaining funding for a Navy counterintelligence program involving his company. She requested the funding, but Wade didn't get it.

"I requested a $10 million appropriation for the U.S Naval Criminal Investigative Services project because I thought it would bring new jobs to Sarasota," said Harris, R-Fla. "I never requested funding for this project in exchange for any contributions, but rather to bring more high-skill, high-wage jobs to the region."

Wade has been cooperating with federal prosecutors in Washington and San Diego since last summer and is required to continue to do so as part of his plea agreement with the government. He faces up to 20 years in prison. Prosecutors said they are continuing to investigate and won't say if Harris is a subject.

Harris said her office has not been contacted about the investigation.

"I think these revelations should matter to voters because I think ethics should count for something in a public servant," said Dan McLaughlin, spokesman for Nelson.

03-03-06 04:33 EST

ABC News: From Cash to Yachts, Convicted Congressman Set Bribery Rates

2006-02-27T15:35:00.000-05:00

Court Documents Show Randall 'Duke' Cunningham Set Bribery Rates
By BRIAN ROSS
Feb. 27, 2006 — - Prosecutors call it a corruption case with no parallel in the long history of the U.S. Congress. And it keeps getting worse. Convicted Rep. Randall "Duke" Cunningham actually priced the illegal services he provided.

Prices came in the form of a "bribe menu" that detailed how much it would cost contractors to essentially order multimillion-dollar government contracts, according to documents submitted by federal prosecutors for Cunningham's sentencing hearing this Friday.

"The length, breadth and depth of Cunningham's crimes," the sentencing memorandum states, "are unprecedented for a sitting member of Congress."

Prosecutors will ask federal Judge Larry Burns to impose the statutory maximum sentence of 10 years in prison.

The sentencing memorandum includes the California Republican's "bribery menu" on one of his congressional note cards, "starkly framed" under the seal of the United States Congress.

The card shows an escalating scale for bribes, starting at $140,000 and a luxury yacht for a $16 million Defense Department contract. Each additional $1 million in contract value required a $50,000 bribe.

The rate dropped to $25,000 per additional million once the contract went above $20 million.

At one point Cunningham was living on a yacht named after him, "The Dukester," docked near Capitol Hill, courtesy of a defense company president.

'I Broke the Law'
Cunningham was a member of the House Appropriations Committee from 1998 to 2005 and served on the subcommittee that provides funding for the Defense Department.

One of the defense contractors, Mitchell Wade, pleaded guilty Friday to giving Cunningham more than $1 million in bribes of cash, cars and antiques over four years in exchange for more than $150 million in government contracts for his company, MZM Inc., in Washington, D.C. "I take full responsibility for my actions," Wade told Judge Ricardo Urbina. The four corruption charges carry a maximum prison sentence of 20 years.

The government's sentencing memorandum against Cunningham also details, with photographs included, the luxury vehicles, yachts, homes, antique furniture and Persian rugs that Cunningham received as bribes.

"In my life, I have had great joy and great sorrow," Cunningham said after admitting his crimes. "And now I know great shame."

Cunningham pleaded guilty Nov. 28 and apologized in a tearful resignation statement. "I broke the law, concealed my conduct and disgraced my office," he said. "I know that I will forfeit my freedom, my reputation, my worldly possessions, most importantly, the trust of my friends and family."

His lawyers say he has since cooperated fully with the widening government investigation of congressional bribery, and they will ask the judge to go outside the sentencing guidelines and impose a lighter sentence than 10 years.

Copyright © 2006 ABC News Internet Ventures

'Straw' Breaking Harris' Back | theledger.com

2006-02-26T14:30:00.000-05:00

Illegally submitted MZM contributions to Harris totaled $50,000.

By JEREMY WALLACE
New York Times Regional Newspapers

SARASOTA -- When asked in June, U.S. Rep. Katherine Harris didn't explain fully why a defense contractor was taking such interest in her re-election.

MZM Inc. employees, their spouses and the company's political action committee became Harris' biggest contributors in 2004, giving her $50,000. On one day alone, Harris collected 18 checks for $2,000 each from MZM employees and spouses.

At the time MZM offered the contributions, Harris said company officials told her they were donating to her because they planned to open a facility in Sarasota.

But new information disclosed Friday by the U.S. Justice Department shows Harris failed to mention one key detail back then -- the company's president had asked her to put in a request for federal funding for his company.

That money would have helped build a Navy counterintelligence facility in Sarasota.

Mitchell Wade, now at the center of a federal bribery investigation, took Harris to dinner at a posh Washington restaurant to make his pitch, according to records from the U.S. District Court in Washington D.C.

The Washington Post reported Saturday that Harris made the defense funding request but failed to get it approved.

It's not the first time the Longboat Key Republican has had to defend herself for accepting illegal contributions from a company. In 1994, while running for the state senate, Harris collected $30,000 from a Sarasota company called Riscorp which, like MZM, was investigated for violating campaign laws.

Harris wasn't talking about the donations Saturday. A Harris spokeswoman refused to comment on why Harris didn't mention MZM's funding request in that June interview. At the time, it already was being reported that Wade had forced some employees to give to Harris.

Harris spokeswoman Kara Borie wrote in an e-mail response to the Herald-Tribune that Harris "did discuss the prospect of a defense plant coming to the district."

Even though Harris knew questions were being raised about MZM's donations during the summer of 2005, she didn't refund the money right away. Instead, she offered to give refunds to coerced donors. No one asked for their money back, so Harris held on to the funds.

It wasn't until two weeks ago that Harris rid herself of the money, donating the nearly 2-year-old donations to charity.

Wade's dealings with Harris and two other members of Congress are part of a federal investigation into bribery in Congress. Already, one member has resigned, and prosecutors say their investigation into Wade is not over.

On Friday, Wade admitted in federal court to bribing U.S. Rep. Randy "Duke" Cunningham, R-Calif., with cash and gifts in return for help in winning government contracts. Cunningham, who campaigned for Harris in Sarasota months after MZM's donations, resigned from Congress three months ago.

Wade also admitted that much of the campaign money he sent Harris and U.S. Rep. Virgil Goode, R-Va., was raised illegally by a method called "straw contributing."

Straw contributing, a felony, is done by giving employees money, then having them make a contribution to a candidate.

Federal officials said Friday that of the $50,000 Harris received from MZM and its employees, $32,000 was given to her using the straw technique.

Neither Harris nor Goode appeared to know the donations were obtained illegally, U.S. Attorney Kenneth Wainstein said Friday.

Still, Harris accepted the multiple donations from MZM officials despite professing a sensitivity to bundled campaign donations. A federal investigation in 1997 looked into money she had received in 1994 from Riscorp.

"In hindsight, I wish I had been more aware of how much money they were giving me," Harris said in a 1997 interview. "When it comes from one corporation, I think there's always a problem of perception."

Harris probably should have known that something was fishy about the donations, particularly because of her history with Riscorp, said University of South Florida political science professor Susan MacManus.

But, MacManus said, Harris can't be blamed entirely for taking the money. The whole campaign finance system is rife with problems.

"You almost have to have a full-time investigative reporter on staff," MacManus said.

Jeremy Wallace is a reporter with The Sarasota Herald-Tribune.

CNN.com - Defense contractor: I�paid $1 million in�bribes - Feb 24, 2006

2006-02-24T15:12:00.000-05:00

WASHINGTON (AP) -- A defense contractor admitted Friday that he paid a California congressman more than $1 million in bribes in exchange for millions more in government contracts.

Mitchell Wade pleaded guilty in U.S. District Court to conspiring with former Rep. Randy "Duke" Cunningham to bribe the lawmaker with cash, cars and antiques, and to help him evade millions of dollars in tax liability.

"I take full responsibility for my actions," Wade told Judge Ricardo Urbina after entering his plea to charges that carry a maximum prison sentence of 20 years.

Cunningham quit Congress last year after he pleaded guilty to taking bribes from Wade and others.

Wade, former president of defense contractor MZM Inc. in Washington, also acknowledged making nearly $80,000 in illegal campaign contributions in the names of MZM employees and their spouses to two other members of Congress, who were not identified. The lawmakers apparently were unaware the donations were illegal, according to court papers.

Prosecutors also laid out a second, separate conspiracy in which Wade was alleged to have paid bribes to a Defense Department official and other employees in return for their help in awarding contracts to his company. Wade pleaded guilty to this scheme as well. The Pentagon employees were not named in court filings.

Wade has been cooperating with federal prosecutors in Washington and San Diego in their ongoing investigation of the Cunningham bribery case, federal prosecutor Howard Sklamberg told the judge.

Wade is one of four coconspirators in the plea agreement and sentencing memorandum for Cunningham. The coconspirators are not named in court papers, but have been identified elsewhere.

MZM does classified intelligence work for the military. MZM's government contracts soared from less than $1 million a year to tens of millions of dollars annually in recent years.

Among Wade's gifts to Cunningham was the purchase of the congressman's California home for a price inflated by $700,000. Cunningham, 64, used the money to move into a $2.55 million, seven-bath mansion in the exclusive San Diego County community of Rancho Santa Fe.

A bribe of a $140,000 in the form of a 42-foot yacht, the Duke-Stir, brought Wade an offer of $16 million in contracts, according to Cunningham's sentencing memorandum, which calls for a 10-year prison term.

Wade bought Cunningham $190,000 in antiques over two years from one store alone, records show. Cunningham used the antiques "to feather his nest in San Diego," prosecutors said.

The former "Top Gun" flight instructor and Vietnam War flying ace is scheduled to be sentenced March 3 in U.S. District Court in San Diego.

Besides Wade, the three other coconspirators are: Brent Wilkes, founder of San Diego-based ADCS Inc.; New York businessman Thomas Kontogiannis; and John T. Michael, Kontogiannis' nephew.

Contractor pleads guilty in Cunningham case | Reuters.com

2006-02-24T14:19:00.000-05:00

By Andy Sullivan
WASHINGTON (Reuters) - Defense contractor Mitchell Wade pleaded guilty on Friday to bribing former congressman Randy "Duke" Cunningham and illegally funneling money to two other lawmakers, a court official said.

According to charges against him, Wade gave hundreds of thousands of dollars in cash and gifts to Cunningham, an eight-term congressman from California and decorated Vietnam War pilot.

Cunningham resigned in November after pleading guilty to taking $2.4 million in bribes in exchange for help in securing Defense Department contracts and faces up to 10 years in prison. His case is one of a number of scandals that have shaken senior Republicans in Congress.

In a statement provided by his attorneys, Wade said: "It is with great remorse that I acknowledge the actions noted in this plea agreement and I feel deep sorrow for the harm I have caused my family, friends and former colleagues."

He pleaded guilty to two counts of conspiracy, one count of election fraud, and one count of using interstate facilities to promote bribery, the court official said.

In violation of campaign-finance laws, Wade was found to have reimbursed employees at his company MZM Inc. who made campaign contributions to two other members of Congress.

Campaign-finance records show that those lawmakers were Virginia Republican Rep. Virgil Goode and Florida Republican Rep. Katherine Harris. The charges indicate Wade did not inform either one that the contributions were unlawful.

A spokeswoman for Harris, who as Florida's secretary of state played a key role in the 2000 disputed presidential election between George W. Bush and Al Gore, said she had given the $52,000 she received from MZM employees to charity.

A spokesman for Goode was not immediately available for comment. According to the charges he received at least $46,000 in illegal contributions from MZM.

MZM operates several facilities in Goode's south-central Virginia district, including one that conducts background checks on foreign-owned defense contractors.

A 2003 press release from Virginia's governor at the time, Democrat Mark Warner, says Goode was "instrumental" in setting up the project.

Campaign finance expert Larry Noble said it was not unusual for lawmakers to want to bring jobs to their districts but added: "If you received money from MZM and those contracts went to MZM, given the Duke Cunningham situation obviously questions are going to be raised and Congressman Goode has to be prepared to answer questions about MZM."

SignOnSanDiego.com > News > Politics -- Former comrades angered by 'bribe menu'

2006-02-22T12:00:00.000-05:00

Cunningham's list appalling, they say
By Toby Eckert
COPLEY NEWS SERVICE
February 22, 2006

WASHINGTON – The stunning disclosure that former Rep. Randy “Duke” Cunningham maintained a “bribe menu” had some of his former colleagues fuming yesterday.

Most of the top leaders in both parties have withheld comment in the four days since prosecutors revealed the depth of Cunningham's corrupt practices in a sentencing memo released Friday in San Diego. But individual members said they were shocked to learn that Cunningham maintained a handwritten list of how much he would charge defense contractors to steer government dollars to them.

“It's heartbreaking,” said a visibly upset Sen. Dianne Feinstein, D-Calif., who was in San Diego yesterday.

“It's just unbelievable,” said Rep. Ted Strickland, D-Ohio. “This sanctimonious guy was just so judgmental, and he just dripped with his concern for our troops. This guy just makes you almost want to vomit to hear that, knowing how he tried to represent himself as this virtuous guy who was so much morally superior to anyone who would question the war” in Iraq.

Rep. Darrell Issa, R-Vista, said prosecutors were justified in seeking the maximum 10 years in prison for Cunningham, who pleaded guilty in November to accepting $2.4 million in bribes. He will be sentenced March 3.

“Although I don't want to see anybody rot in jail for the sake of rotting in jail, the damage done to the confidence of the people of San Diego, of the whole country, has risen to a level much more like treason,” Issa said. “I believe that anything less is going to send the wrong message about how . . . you should treat somebody who betrays the public trust at this level.”

Rep. Duncan Hunter, R-El Cajon, perhaps Cunningham's closest friend in Congress, refused to comment about the bribe menu. Instead, he faulted federal prosecutors, saying that although they probably knew about the bribe menu long ago, they are now “eking out their most damaging evidence . . . to bolster their position.”

The revelation about the bribe menu seemed to catch the capital city off guard, coming as it did when Congress was shutting down for the Washington's Birthday holiday recess. The news also came amid signs that the push for ethics reform – spawned by the Cunningham scandal and another involving lobbyist Jack Abramoff – is faltering.

Representatives of House Speaker Dennis Hastert, R-Ill.; House Minority Leader Nancy Pelosi, D-San Francisco; Senate Majority Leader Bill Frist, R-Tenn.; and Senate Minority Leader Harry Reid, D-Nev., did not respond to requests for comment.

Jim Specht, spokesman for House Appropriations Committee Chairman Rep. Jerry Lewis, R-Redlands, did not reply to phone calls and e-mail messages. Cunningham, a Republican from Rancho Santa Fe, used his seat on the Appropriations Committee to help steer contracts to Poway-based ADCS Inc. and Washington-based MZM Inc.

Some lawmakers said Cunningham was an aberration.

“I think the vast majority of members of Congress, Democrats and Republicans, are honest and hard-working, and there isn't a single walk of life that doesn't have its corruption, whether it's business or labor or religion or journalism,” said Senate Minority Whip Dick Durbin, D-Ill. “These things happen, and those of us who do our best to be honest have to make an extra effort to restore the public confidence.”

But those who monitor congressional ethics say that is hard to square with the Abramoff scandal, which has touched numerous lawmakers and is still unfolding, and with other controversies in recent years.

“The one-bad-apple-in-the-basket explanation . . . diminishes the actual problem we've seen,” said Scott Amey, general counsel for the Project on Government Oversight. “It's time for Congress . . . to look at itself and the way that it works currently.”

Since the Cunningham scandal broke, lawmakers have made numerous proposals to rein in secretive spending measures called “earmarks” that Congress members insert into spending bills for pet projects and favored contracts. Earmarking was at the heart of Cunningham's effort to steer contracts to MZM and ADCS.

Most of the proposals would require earmarks to be publicly disclosed a day or two before a spending bill is voted on, link them to a particular member and make it easier to excise those that draw objections.

“There are good earmarks and bad earmarks,” said Feinstein, who is co-sponsoring one of the proposals and had just met with San Diego-area officials about projects they would like to see funded. “What (Cunningham) did was a bad earmark. He essentially received money or goods for putting an earmark in the budget.”

Other proposed reforms include a ban on travel funded by special-interest groups, stricter limits on meals and other gifts, and a longer “cooling off” period before former lawmakers and congressional staffers can cash in on their political connections by becoming lobbyists.

But some of the reform proposals have run into strong resistance from lawmakers. Republican leaders delayed unveiling a reform package after Rep. John Boehner, R-Ohio, was elected House majority leader and signaled that he preferred more public disclosure to bans and other limits.

“Sunlight is always the greatest disinfectant with regards to the nexus of what lobbyists are petitioning Congress for and what Congress is legislating on,” Boehner spokesman Kevin Madden said.

Former legislators and longtime congressional observers say that in the past, Congress has tightened its ethics and campaign finance rules only after sustained public pressure.

“There's a very strong reluctance on the part of Congress to reform itself,” said former Vice President Walter Mondale, a member of the Senate Finance Committee in the 1970s. “This cozy thing of going on golf trips or going to fancy events . . . is very seductive. If people think the issue is dying they say, 'Well, let's just leave it this way.' ”

NBCSandiego.com - News - Court Papers: Cunningham 'Terrified' Of Prison

2006-02-22T11:58:00.000-05:00

Corrupt Congressman Faces Up To 10 Years

POSTED: 6:27 pm PST February 21, 2006
UPDATED: 7:38 pm PST February 21, 2006

SAN DIEGO -- Former Rep. Randy "Duke" Cunningham is terrified of going to prison, according to recently released court documents.

Cunningham admitted to prosecutors that he took bribes from defense contractors and made a plea agreement. He faces up to 10 years in prison.

NBC 7/39 obtained letters on Tuesday that were sent to the judge in advance of Cunningham's sentencing.

In one of the letters, which was penned by Cunningham, he tells the judge that it has been hard to endure public ridicule.

"I know that I must be punished, and I will accept your sentence without complaint," wrote Cunningham.

A psychiatrist who evaluated the corrupt congressman wrote in another letter that Cunningham is "extremely anxious and is terrified of incarceration." The letter goes on to say that Cunningham suffers from severe depression and has had suicidal thoughts.

Cunningham is scheduled to be sentenced on Monday.

Prosecutors Urge 10-Year Sentence for Cunningham

2006-02-18T11:02:00.000-05:00

By Charles R. Babcock
Washington Post Staff Writer
Saturday, February 18, 2006; A02

Convicted former representative Randy "Duke" Cunningham (R-Calif.) should be sentenced to the maximum 10 years in prison because of "unparalleled corruption" that included a "bribe menu" on congressional letterhead telling a defense contractor what payments were required for different levels of federal funding, federal prosecutors said in court papers yesterday.

Cunningham pleaded guilty in November to bribery-related and tax-evasion charges of accepting $2.4 million from two contractors and two other men in return for steering defense work to them. The pre-sentencing memo filed by prosecutors in San Diego yesterday offered new details on the extent of his crimes and efforts he made to cover them up.

For instance, it said that Cunningham offered one of the contractors, identifiable in the court papers as Mitchell Wade, head of a Washington company called MZM Inc., $16 million in government contracts in return for the title to a boat Wade had just bought for $140,000. A copy of the notes is included in the filing, showing, the government said, that Cunningham charged an additional $50,000 for every $1 million more.

When the payments reached $340,000, the rate for each $1 million of federal funding dropped to $25,000, the document said.

The 35-page memo detailed several other incidents, including several in which the government said Cunningham attempted to tamper with witnesses when he feared that his actions would be discovered.

Cunningham's attorney, K. Lee Blalack II, said in a statement last night that the government's recommendation is "not surprising, but it is sad." He said he will recommend a six-year sentence.

Wade's lawyer, Reginald Brown, declined to comment last night.

Cunningham's downfall began last June when the San Diego Union-Tribune reported that Wade had bought Cunningham's house there for $700,000 more than it was worth in 2003. The congressman used the proceeds to buy a more expensive home in Rancho Santa Fe.

The prosecutor's filing said that in 2004, Cunningham set out to erase the mortgages on his new home. First he demanded that the other contractor, identifiable as Brent Wilkes, head of ADCS Inc., give him $525,000 to pay off a second mortgage. The contractor did so on the condition that he received an additional $6 million in government funding, prosecutors said.

Cunningham demanded that Wade pay him $500,000 to pay off the rest of the mortgage, which prosecutors said Wade did by writing checks for $171,000 and $329,000 to Top Gun Enterprises, a memorabilia company Cunningham used to sell books and mementos of his days as a Navy fighter pilot in Vietnam.

Cunningham attempted to fabricate evidence and tamper with witnesses to his corruption, the government said, including persuading a real estate agent to write a letter justifying the lower price Wade resold his home for, and a phony letter in which Cunningham expressed his surprise at the low price and promised to pay Wade the difference.

He did not pay, the filing said.

City Considers Requiring Lobbyists to Register - Los Angeles Times

2006-02-07T10:23:00.000-05:00

From Times Staff and Wire Reports

Paid lobbyists would be required to register with the city and identify their clients under a proposed ordinance before the City Council.

The measure was prompted by recent lobbying scandals in Congress.

Former area Rep. Randy "Duke" Cunningham resigned his seat last year after pleading guilty to accepting $2.4 million in bribes from defense contractors and others.

Proposed fees for registering would be $80 each year and an additional $15 per year for every client the lobbyist represents. Fines of $10 per day for delinquent fees would be instituted.

The council will vote Wednesday on the proposed ordinance.

SignOnSanDiego.com > News > Politics -- Cunningham's new sentencing date

2006-02-04T12:52:00.000-05:00

UNION-TRIBUNE
February 4, 2006

The sentencing of former Congressman Randy “Duke” Cunningham for conspiracy and tax evasion convictions has been reset to accommodate scheduling conflicts.

Cunningham is now scheduled to be sentenced at 1 p.m. March 3, before U.S. District Judge Larry Burns. His sentence had been scheduled for Feb. 27 in San Diego federal court.

Cunningham, 64, resigned from Congress after admitting he took more than $2.4 million in bribes from businessmen, including Pentagon contractors who helped him buy and furnish a Rancho Santa Fe home.

When he pleaded guilty Nov. 28, he admitted he used his position in Congress to help the contractors. The former Vietnam War naval flying ace faces a prison term of up to 10 years. He has agreed to pay back $1.8 million and give up his interest in his Rancho Santa Fe home.

While the businessmen are identified as co-conspirators in court documents, nobody else has been charged in a case that prosecutors said still is under investigation.

–Onell R. Soto

North County Times / The Californian - Perspective - Ex-con: Cunningham faces rough road in prison

2006-01-22T09:45:00.000-05:00

By: WILLIAM FINN BENNETT - Staff Writer

They are jokingly referred to by names like "Camp Cupcake," "Club Fed" and "Camp Cream Puff." But according to white-collar felon and ex-convict Mark Morze ---- who served 3 1/2 years in a federal minimum-security prison at Lompoc ---- these institutions are anything but a day at the beach.

As Randy "Duke" Cunningham puts his affairs in order for his scheduled Feb. 27 sentencing hearing and what could be a 10-year prison stint ---- possibly at the same Central California minimum security camp where Morze served his time ---- the disgraced former congressman had best get ready for the rocky road that lies ahead, Morze said on a recent afternoon.

Before his fall from grace, Cunningham lived a life of luxury in an 8,000-square-foot Rancho Santa Fe mansion and enjoyed private jet travel, the finest restaurants and five-star hotels, while earning a $162,100 a year salary ---- plus perks. He was recently convicted of bribery charges for taking additional money, a Rolls-Royce, antiques and other illicit gifts from contractors who wanted congressional favors.

Now, he faces the distinct possibility of a very different lifestyle: sleeping in a barracks with other inmates, tasting prison food and earning pennies an hour for what could well be a job painting walls, mopping floors or cleaning bathrooms.

Myth versus reality
The public information officer for Lompoc's minimum-security camp ---- which lies between Santa Barbara and San Luis Obispo and houses mostly drug offenders and white-collar criminals ---- agreed with Morze that the "Club Fed" image is a myth. True, the minimum security camps may have no fences or armed guard towers, and inmates may have access to libraries, newspapers and magazines, organized sports and television. But offenders are still incarcerated, the official said, and every phase of each inmate's life is controlled.

"They are told where to be 24 hours a day, they have to work and live in a barracks-style (building) with little privacy," prison spokesman Erwin Meinberg said in a Wednesday phone interview. "It's still a prison, not a free ride, not a vacation."

Inmates work at a variety of jobs, many involving manual labor, 7 1/2 hours a day, five days a week, Meinberg said. For their toil, prisoners are paid 12 cents to 45 cents an hour, he added.

One of the federal prosecutors in the Cunningham case said last week that it is not yet known how much time Cunningham will receive nor what type of prison may be his destination.

However, corrections expert Alvin W. Cohn said he believes Cunningham would likely serve any prison time at a minimum security facility.

"In all probability, the federal prison system would classify him for minimum security, since he is not violent," said Cohn, a Maryland-based consultant on corrections issues and a retired professor of criminal justice.

A spokesman for the federal Bureau of Prisons said last week that prison officials try to place convicts in a facility within 500 miles of where their families live. The closest minimum-security camp to San Diego is the one at Lompoc.

Snitch factor
Regardless of where Cunningham serves his time, the biggest problem he could face may come from his plea agreement to fully cooperate with federal prosecutors ---- an agreement that could mean he'll be perceived as a snitch, said former inmate Morze.

On Nov. 28, 2005, Cunningham pleaded guilty to tax evasion and having received more than $2.4 million in bribes from co-conspirators in exchange for steering tens of millions in government contracts to two defense contractors. As part of the terms of his plea agreement, the decorated Vietnam war ace agreed to fully cooperate with prosecutors.

"Defendant has expressed a desire to provide substantial assistance to the Government in the investigation and prosecution of others; Defendant agrees ... to tell everything the defendant knows about every person involved," court documents read.

Earlier this month, Time magazine's online edition reported that Cunningham began cooperating with prosecutors before his guilty pleas. The story said that Cunningham wore a wire in a conversation with at least one defense contractor.

Cunningham's Washington attorney K. Lee Blalack later issued a written statement saying that Cunningham had not worn a wire while meeting with any government officials. But he declined to comment on the record whether Cunningham had worn a wire during meetings with people outside of government, such as the four unnamed co-conspirators identified in his plea agreement. Federal officials refused to comment on the article, which was later picked up by several other publications.

Morze said those reports and the court records showing that Cunningham agreed to help the government build a case against others means that he will be tagged as a snitch when he enters the federal penal system. And that stands to make his prison life less pleasant, Morze added.

"I feel badly for Cunningham because he is in for a real rough time with fellow inmates," Morze said. "I don't mean physically harmed, but he will be shunned. You eat alone, play alone, do everything alone, because everybody hates you."

Morze was convicted in the late 1980s as one of the principal cohorts of Barry Minkow, the owner of Z-Best Carpets. In one of the biggest white-collar cases of that decade, the company vastly inflated its earnings to attract investors and then proceeded to bilk them out of hundreds of millions of dollars.

True story may be irrelevant
Morze added that for the typical inmate, it will make little difference that Cunningham's attorney denied the 64-year-old man had worn a wire.

"You can't put the toothpaste back in the tube; maybe the story is wrong, but it doesn't matter," Morze said. "The average inmate just knows that you are a rat and that is all there is to it."

Corrections consultant Cohn agreed with Morze that those who are perceived as so-called stool pigeons can have a tough time in prison.

"Nobody likes a snitch," Cohn said.

To a large extent, however, Cunningham's experience in the penal system will depend on his attitude, Cohn noted.

"Somebody who is abrasive or arrogant is likely to get some form of come-uppance," Cohn said.

Judging by some of Cunningham's actions over the 15 years he spent in Congress ----- making a crude comment about an openly gay congressman, challenging another member to a fist fight, saying that Democratic congressional leaders should be "lined up and shot" ----- showing his kinder, gentler side may prove a challenge.

Prison life can be especially traumatic for white-collar criminals, even in minimum security environments, Cohn said.

"They have to come to grips with the fact that they are no longer in power, that someone else is in charge," he said. "Some people have an exceedingly difficult time adjusting." But, he said, "It depends on the personality of the person."

Ex-con's advice to Cunningham
Morze suggested that if Cunningham wants to avoid doing hard time, the first thing he should do is accept his fate, fully admit to himself his guilt and start making the best of prison life.

He said that for most white-collar inmates, the days are like weeks, as they refuse to accept their destiny and fool themselves into thinking they will win an appeal or be able to control events outside of prison.

"There are two kinds of time: easy time and hard time," Morze said. "Eventually you have to realize that while you are in here, you are dead, and that is so hard for men who have had power."

DeLay's prosecutors dig deeper into California

2006-01-20T16:42:00.000-05:00

Subpoenas seek records from defense contractor
By Laylan Copelin
AMERICAN-STATESMAN STAFF
Thursday, January 19, 2006

It was the fall of 2002, and Texans for a Republican Majority was scouring for corporate money when it found an unlikely donor — a California defense technology firm willing to send part of its $40,000 startup money to help U.S. Rep. Tom DeLay's political committee.

PerfectWave Technologies, a San Diego-area firm, gave DeLay's committee $15,000 to help elect Republicans to the Texas Legislature. It sent the rest of the $40,000 to a gala tribute to Randy "Duke" Cunningham, the San Diego-area congressman who resigned after pleading guilty last year to taking bribes from military contractors.

On Thursday, Travis County prosecutors dug deeper into the Southern California connections to DeLay and Texans for a Republican Majority political action committee, subpoenaing a second round of records of any "negotiations or agreements" that prompted the donation. They also asked for any communications about pending federal legislation that would have affected the firm.

DeLay and his co-defendants, John Colyandro of Austin and Jim Ellis of DeLay's Washington staff, have been indicted on a charge of conspiring to launder corporate money given to Texans for a Republican Majority into political donations. State law generally prohibits corporate money being spent in connection with campaigns.

The indictments charge the men with making a $190,000 donation to the Republican National Committee which, in turn, gave the same amount to Texas legislative candidates. DeLay's lawyers, who defend the $190,000 exchange as two separate, legal transactions, dismissed Thursday' subpoenas as a fishing expedition.

The $15,000 from PerfectWave came at about the same time $190,000 was given to the national Republicans.

Last month, prosecutors subpoenaed bank records of PerfectWave Technologies, a company that builds technology for battlefield communications, plus documents from San Diego military contractor Brent Wilkes, a big donor to Republicans. Wilkes owns PerfectWave and several other defense-related companies,as well as a Washington-based lobbying firm, Group W.

DeLay, a Sugar Land Republican who resigned as House majority leader after he was indicted last year, flew on Wilkes' jet, played golf with him and came to depend on his political support. Wilkes has not been charged with a crime, but his lawyer has identified him as an unnamedco-conspirator mentioned in Cunningham's court documents.

On Thursday, prosecutors sought records from William Bain Adams, an investor in PerfectWave Technologies, who gave the company its initial $40,000, according to the subpoena. They also subpoenaed records of the company president Max Gelwix and Paul Smithers, a corporate lawyer for Wilkes.

None responded to phone calls for comment.

According to the subpoena, on Sept. 18, 2002, Adams deposited $40,000 to the account of Perfect- Wave Technologies. Two days later, the company gave $15,000 to Texans for a Republican Majority.

PerfectWave Technologies sent the remaining $25,000 from Adams to a "Tribute to Heroes" gala, organized by Wilkes, that feted Cunningham with a trophy naming him a hero.

Travis County prosecutors are apparently trying to determine why PerfectWave Technologies would donate the initial depositfrom Adams to two political causes: DeLay and Cunningham.

DeLay's lawyer, Dick DeGue- rin, said there is nothing shock- ing about donors from all over the country wanting to give money to the Republican majority leader in Congress.

"Is it entirely altruistic that donors give? Of course not," DeGuerin said. "It's stupid to think a political donor doesn't try to increase their clout."

There's a big difference, he said, between bribery and a donor trying to "get their phone calls returned."

Austin lawyer Cris Feldman, who won a lawsuit filed by Democrats against Texans for a Republican Majority on related matters, said he was suspicious of so many out-of-state companies pouring corporate money into Texas during the 2002 campaigns.

Feldman noted that Wilkes, through his companies, hired Alexander Strategies, a now defunct lobbying firm where DeLay's wife and many of his former staffers worked.

"It looks like this is leading back to the door of DeLay Inc.," said Feldman, using the nickname for DeLay's close association with the capital lobbying firms.

DeGuerin questioned prosecutors issuing subpoenas in a case that is temporarily on hold, pending appeals on pretrial matters.

"We're not going to try to get these people not to respond," DeGuerin said. "But any lawyer worth his salt will see the subpoenas are not worth so much toilet paper."

KESQ NewsChannel 3 Palm Springs, CA: Defense attorneys: Randy "Duke" Cunningham didn't wear a wire

2006-01-10T10:17:00.000-05:00

SAN DIEGO Attorneys for Randy "Duke" Cunningham are denying reports that the disgraced ex-congressman wore a wire to surreptiously gather evidence for the U-S government.

Cunningham's defense attorneys issued a statement today denying a report that appeared in Time magazine and prompted fierce speculation in Washington. Time reported Friday that Cunningham wore the wire before he entered his plea on November 28th.

Cunningham, a 64-year-old Republican, resigned from Congress after admitting that he pocketed two-point-four (m) million dollars from defense contractors and others in exchange for government business and other favors.

Attorneys Lee Blalack and Mark Holscher say Cunningham has never worn a body wire during conversations with his former congressional colleagues or any other public official.

They also say he has not surreptitiously gathered evidence against any public officials.

North County Times / The Californian - Top Stories - Alleged Cunningham co-conspirator has checkered past

2006-01-08T10:10:00.000-05:00

By: WILLIAM FINN BENNETT - Staff Writer

A look at one of the alleged, unindicted co-conspirators in the Randy "Duke" Cunningham scandal shows a man with a checkered past, replete with a conviction for bribery and another for phony visas ---- a man whose sentences did not include a single day behind bars.

Sources close to the investigation have confirmed that New York businessman Thomas Kontogiannis is being investigated as one of four men from whom Cunningham received bribes. Court documents do not name the men, but refer to them as "co-conspirators."

Cunningham, the former congressman for most of North County, pleaded guilty Nov. 28 to taking more than $2.4 million in bribes in exchange for steering tens of millions of dollars in government contracts to two defense contractors.

From a distance and to colleagues, the Long Island resident seemed an old friend, a successful businessman, a man who enjoyed the good life on the water.

But a closer look shows that the Greek-born real estate developer eluded jail for a number of crimes, including his participation in a massive bribery scheme with a New York school official in exchange for contracts.

Then came the Cunningham scandal, in which Kontogiannis is suspected of giving the then-congressman hundreds of thousands in bribes.

Those bribes allegedly included overpaying for a 65-foot party boat that belonged to Cunningham and financing real estate deals that were described as bribes in Cunningham's plea agreement.

Lender link
A common thread in the Cunningham case is a mortgage company, Coastal Capital Corp.

Virginia's Bureau of Financial Institutions lists John T. Michael as the chief executive officer for the Greenville, N.Y.-based company. According to news reports, Michael is the nephew of Kontogiannis' wife. In an earlier interview, Kontogiannis told the North County Times that his daughter is also a principal in the company. A source close to the investigation has confirmed that Michael is alleged to be co-conspirator No. 4.

San Diego County property records show that company held more than $1 million in mortgages on Cunningham's Rancho Santa Fe estate. The loans were then alleged to have been paid off by two other co-conspirators.

Virginia property records show that Coastal Capital also was the lender for Cunningham's mortgage in his $350,000 purchase of an Arlington, Va., condominium in 2002. Court records show that alleged co-conspirator No.3 ---- who sources close to the investigation have identified as Kontogiannis ---- gave Cunningham $200,000 toward its purchase. Coastal then loaned the $150,000 difference to Cunningham to complete the deal.

Reached by phone last week, Kontogiannis' New York attorney, Gregory J. O'Connell, would not talk about any alleged involvement in the bribery of Cunningham.

"Mr. Kontogiannis has not been accused (of) or charged (with) any wrongdoing in connection with this Cunningham affair, and I have no comment beyond that," he said.

Agents with the FBI, the Internal Revenue Service and other federal departments raided Kontogiannis' New York home and offices in September in connection with the Cunningham case.

In addition to the allegedly fraudulent real estate transactions, court documents also allege that co-conspirator No.3, as Kontogiannis is referred to in court documents, funneled more than $300,000 in payments to a company owned by Cunningham.

The investigation involving Cunningham is not Kontogiannis' first brush with federal investigators.

The Long Island resident pleaded guilty to fraud and conspiracy in federal court in 1994 in an overseas visa scam, and again in 2002 on New York state charges relating to a multimillion-dollar bribery scheme.

Criminal convictions
Kontogiannis' criminal past appears to date to at least 1994. After he and a U.S. Embassy official were arrested by the FBI in Athens, Greece, both men later pleaded guilty to charges of taking bribes to supply fraudulent U.S. visas, and Kontogiannis later was sentenced to five years' probation, according to an article in the New York Post in 2000.

Then, in 2000, Kontogiannis, along with the superintendent of a Queens County, N.Y., school district and three other co-defendants and five corporations ---- three of them owned by Kontogiannis ---- were charged with 123 counts of having rigged bids, paid bribes and received kickbacks to fix more than $6 million in school computer contracts, court records show.

The indictments accused Kontogiannis and one of the other co-conspirators of having received more than $2 million of the contract money in kickbacks.

Court records show that in 2002, Kontogiannis pleaded guilty to reduced charges, and he and his co-conspirators agreed to pay nearly $5 million in restitution to the school district. He paid part of the settlement with money from a mortgage on a commercial building owned by his wife.

"The defendants' fraudulent scheme victimized the children of Southeast Queens who lost critically needed classroom resources as a result of the defendants' greed and corruption," District Attorney Richard A. Brown stated at the time of the guilty pleas.

Once again, Kontogiannis escaped any jail time, instead receiving five years on probation.

A parallel civil suit charging the defendants with racketeering was settled as part of the plea arrangement. In a Friday phone interview, an attorney in that civil suit said he wasn't surprised that Kontogiannis' sentence didn't include time behind bars.

"The fact that there was $5 million in restitution was what made everybody happy," New York City Assistant Corporation Counsel Eric Proshansky said. "We were more happy to get the money back than to see him get any jail time."

In a Thursday telephone interview, a Queens County prosecutor in the bribery case said that at the time of the plea agreement, her office was aware that Kontogiannis had been convicted in the federal visa case, as reported in the New York Post.

However, she said, despite the prior conviction and his involvement in the bid-rigging case, she believes that his sentence in the bribery case was appropriate.

"There is always going to be somebody who will comment in favor of or against a certain (sentence)," said prosecutor Carmencita N. Gutierrez. "Based on the investigation and the nature of the case and information available to us, we believe the disposition was appropriate."

Building relationships
The relationship between Cunningham and Kontogiannis began in the early 1990s, according to The Washington Post. Kontogiannis said he had served in the Greek navy before coming to the United Sates. He told reporters that he and Cunningham met at a Washington function 15 years ago, and have gotten together a couple of times a year.

In 2000, during the investigation of the school district case, Cunningham wrote a letter to the Queens County district attorney, Brown, suggesting that Kontogiannis might be the victim of a political vendetta against school district Superintendent Celestine Miller.

"It has come to my attention that a case has been filed against Tom Kontogiannis in New York's 29th school district. It has been alleged that there may be a political agenda being waged against former Superintendent Celestine Miller by a company allegedly not capable of completing a contract, and therefore Mr. Kontogiannis is being allegedly victimized," Cunningham wrote.

The day after that letter was received, charges were filed against Kontogiannis and Miller.

It wasn't the only time Kontogiannis sought help from the eight-term congressman and Vietnam War Navy ace.

After his conviction, Kontogiannis then sought Cunningham's advice on seeking a pardon from President George W. Bush, Kontogiannis told reporters in July. He said Cunningham steered him to a Washington law firm.

But in the most recent case, the first indication of a link between Kontogiannis and Cunningham surfaced when Kontogiannis told the North County Times he had bought a 65-foot flat-bottomed boat in 2002 from Cunningham for $627,000. Cunningham had bought the boat from another member of Congress five years earlier for $200,000.

After reports surfaced of the boat deal between Cunningham and Kontogiannis, a San Diego yacht broker said that, based on the age, type and features of the boat, he would estimate its maximum value at $200,000, "unless it has a Picasso onboard."

In another sign of their flourishing relationship, the following year, Kontogiannis accompanied Cunningham by private jet on a fact-finding mission to Saudi Arabia, Rep. Ken Calvert, R-Riverside, said Thursday.

In 2003, Cunningham made two trips to Saudi Arabia that were paid for by San Diego businessman and naturalized U.S. citizen Ziyad Abduljawad, according to congressional travel reports. Calvert said he accompanied Cunningham on one of those trips.

On their way to Saudi Arabia, they stopped in Athens and picked up Kontogiannis, Calvert said.

Calvert added that he hadn't known beforehand they would be picking up Kontogiannis, whom he had not before met. He hasn't seen Kontogiannis since, Calvert said, adding that Cunningham described the Greek native as a friend and a successful New York businessman.

And while Kontogiannis did participate in some of the meetings that he and Cunningham had with Saudi ministers, Calvert said that Kontogiannis "wasn't involved in any classified or high-level information as far as I can recall."

"If I had known his background, I wouldn't have felt very comfortable, but I didn't know," he said.

Officials with the U.S. attorney's office in San Diego have said that the investigation is continuing, but have declined to say if indictments will be issued against the co-conspirators.

San Diego FBI spokeswoman April Langwell said Thursday that investigators "are getting their ducks in a row."

Based on descriptions in the court records, also confirmed by sources close to the investigation, two of the other alleged co-conspirators appear to be Mitchell Wade, the founder of Washington defense contractor MZM Inc., and Brent Wilkes, founder of Poway defense contractor ADCS Inc.

Staff writer Teri Figueroa contributed to this report. Contact staff writer William Finn Bennett at (760) 740-5426 or wbennett@nctimes.com. To comment, go to www.nctimes.com.

North County Times / The Californian - Top Stories - Report says Cunningham wore wire

2006-01-07T11:46:00.000-05:00

By: MARK WALKER - Staff Writer

Authorities on Friday refused comment on a report that former 50th District Congressman Randy "Duke" Cunningham wore a wire to record conversations with unidentified associates before pleading guilty to tax and bribery charges in November.

The report published on TIME magazine's online edition quoted unnamed sources as saying Cunningham wore the wire to help federal authorities collect evidence against others involved in the case.

Debra Hartman, a spokeswoman for the U.S. attorney's office in San Diego, said there would be no comment on the story from the federal prosecutors in charge of the Cunningham investigation.

K. Lee Blalack, Cunningham's chief attorney, said in an interview from his office in Washington that he would not discuss any specifics of the report.

"I am not going to discuss the particulars of any cooperation that Duke may have been involved in," Blalack said.

FBI spokeswoman Jan Caldwell in San Diego said her agency will "neither confirm nor deny" the story on TIME's Web site, www.time.com.

Cunningham, 64, remains free on his own recognizance pending sentencing after pleading guilty on Nov. 28 to one count of bribery and one count of tax evasion. He admitted taking more than $2.4 million in bribes in the form of cash and goods and cheating on his taxes between 2001 and 2004.

In the plea agreement, Cunningham admitted steering contracts to two defense firms in exchange for the cash and gifts, which included a Rolls-Royce, a variety of antiques and Persian rugs.

The former congressman's undoing came after it was reported that defense contractor Mitchell Wade had paid $1.675 million for Cunningham's home in Del Mar Heights in late 2003. Wade, founder of MZM Inc. of Washington, then sold the home for $700,000 less than he paid.

Federal authorities last summer raided MZM and searched Wade's offices and home. A similar raid was conducted at the offices of defense contractor ADCS of Poway and at the home of that firm's founder and owner, Brent Wilkes.

Neither Wilkes nor Wade has been named in any federal documents, but widespread reports say they are two of four unindicted co-conspirators referred to in the Cunningham plea agreement.

A third unindicted co-conspirator has widely been reported to be Thomas Kontogiannis, a New York developer who provided money to Cunningham to purchase a Washington condominium and was involved in a boat transaction with him.

All three have been described by Cunningham as personal friends and each were regular campaign contributors.

According to other published reports, the fourth unindicted co-conspirator is John T. Michael, chief executive officer of Coastal Capital Corp., a New York mortgage lender. Michael is a nephew of Kontogiannis' wife.

Cunningham, a former Navy flying ace, faces up to 10 years in federal prison and a $350,000 fine when he is sentenced. The sentencing is scheduled to take place before U.S. District Judge Larry Alan Burns in San Diego on Feb. 27.

The story in TIME said Cunningham wore the wire during a "short interval between the moment he began cooperating with the feds and the announcement of his guilty plea."

After consistently denying any wrongdoing following the initial reports of the home transaction, sources have told the North County Times that it was Cunningham who asked his attorneys to enter into discussions with federal prosecutors leading to his guilty pleas.

In other news related to the Cunningham case, a civil suit filed by federal prosecutors to block Cunningham and his wife, Nancy, from receiving the proceeds of a sale of a gated estate they purchased in Rancho Santa Fe following the sale of their Del Mar Heights home has once again been put on hold.

In court papers filed Thursday, U.S. District Judge Dana Sabraw in San Diego agreed to delay any action in the case for at least 60 days.

In his plea agreement, Randy Cunningham gave up any rights to the sale proceeds. Nancy Cunningham, however, continues to assert she did nothing wrong and is entitled to an unspecified portion of the $2.6 million for which the home sold in December.

"The government asked us to stay that case for now and of course we agreed," Blalack said.

Cunningham's plea agreement requires he cooperate with federal investigators, who say their probe of the unindicted co-conspirators continues. The agreement also requires he undergo a polygraph examination if asked, and that he file amended tax returns for 2001 through 2004.

Cunningham lost his congressional salary when he resigned, and a legal defense fund he established last year to help pay his attorneys fees has been shut down after collecting about $70,000.

That money along with about $560,000 in his campaign account has all been paid to the attorneys, Cunningham's longtime campaign treasurer Kenneth Batson said Friday.

The Federal Election Commission last year ruled that Cunningham could use the money in his campaign account, which is separate from the legal defense fund he later established, to pay the legal bills.

"I've dispersed most of it to the defense attorneys," Batson said. "I'm holding a little in there to take care of some remaining administrative matters."

TIME.com: Disgraced Congressman 'Wore a Wire' -- Page 1

2006-01-06T16:00:00.000-05:00

Sources tell TIME that Duke Cunningham wore a wire after agreeing to cooperate with a graft probe
By TIMOTHY J. BURGER
Washington's power players have always bragged about being well-wired, but for disgraced former congressman Duke Cunningham, "wired" wasn't just a figure of speech. In a week when legislators are focused on the question of who else might be brought down by ex-lobbyist Jack Abramoff’s cooperation with prosecutors as he seeks lenient sentencing over his two federal guilty pleas this week, sources tell TIME that ex-Rep. Cunningham wore a wire to help investigators gather evidence against others just before copping his own plea.

Sources familiar with the situation say Cunningham, a California Republican who pleaded guilty Nov. 28 to taking $2.4 million in bribes — including a yacht, a Rolls Royce and a 19th Century Louis-Philippe commode — from a defense contractor, wore a wire at some point during the short interval between the moment he began cooperating with the feds and the announcement of his guilty plea on Nov. 28.

The identity of those with whom the San Diego congressman met while wearing the wire remains unclear, and is the source of furious — and nervous — speculation by congressional Republicans. A Cunningham lawyer, K. Lee Blalack, refused to confirm or deny the story, and wouldn't say whether Cunningham will implicate any other members of Congress. The FBI is believed to be continuing its probe of defense contractors involved in the Cunningham case. An FBI spokesman declined comment. Asked whether Cunningham, an ace Navy fighter pilot decorated for his service in Vietnam, had worn a wire, the spokesman said the response from a higher-up was, "Like I'd tell you."

KBCI 2 Boise, Idaho | Idaho Senator Accepted Contributions From Defense Contractor Accused of Bribery

2006-01-05T09:00:00.000-05:00

January 4, 2006

By Sarah Dallof

BOISE -
An Idaho senator may now have to defend campaign contributions he accepted from defense contractor Brent Wilkes.

Wilkes allegedly bribed California Congressman Randy "Duke" Cunningham with money and gifts in exchange for government work contracts.

Wilkes made contributions to hundreds of lawmakers including Idaho Senator Larry Craig.

During his 2000 campaign, Craig received $1,000 dollars from Wilkes and $5,000 from the military contracting company ADCS, which Wilkes founded. In addition, Craig accepted a $1,000 donation from Wilkes' business partner, who also allegedly bribed Cunningham, as well as another $1,000 from an ADCS employee.

Wilkes and ADCS each donated $5,000 to Alliance for the West, a political action committee associated with Senator Craig.

All in all, $18,000 was given.

However the issue isn't if the senator accepted the contributions, it's whether expectations came along with the cash.

A spokesperson for Senator Craig tells Local 2 News no one is prepared to comment on any contributions from Wilkes or any company or person associated with him.

Senator Craig also accepted money from Jack Abramoff who pleaded guilty Tuesday to providing campaign contributions, trips and other items to politicians in exchange for "certain official acts."

The spokesman says Senator Craig's office is still trying to verify if the senator received contributions from Jack Abramoff. If he did, the spokesman says, they they'll strongly consider donating that money to Idaho charities.

© 2005 Fisher Communications, Inc.

North County Times / The Californian - Top Stories - Lessons from the Cunningham case

2006-01-01T11:22:00.000-05:00

By: MARK WALKER - Staff Writer

Randy Cunningham, the man known to most by his sobriquet "Duke," was used to receiving standing ovations.

In a testament to his popularity, or to voters' willingness to grant the benefit of the doubt, he was still basking in adoration even after he became the focus of a San Diego federal grand jury investigation into his dealings with a defense contractor, a contractor who paid an inflated price for Cunningham's Del Mar Heights home.

Investigation or not, Escondido Rotarians in June gave their 50th District congressman not one but two standing ovations, and they also sang him a song of praise set to the tune of "Anchors Aweigh."

And all through that ceremony, just as each time Cunningham accepted similar plaudits over the last four years, he was living a double life ---- one as a seemingly committed politician, the other as a seemingly unabashed crook.

His decade-and-a-half-long public life was that of a flag-waving, Reagan-like conservative who wielded influence and brought home millions in government contracts through his positions on powerful appropriations and intelligence committees.

But since 2001, from what is now known, his private life was all about arranging and taking bribes, laundering the money and then cheating on his taxes to cover up the ill-gotten gains.

Once revered because of his status as a U.S. Navy ace pilot for shooting down five North Vietnamese MiG fighters during the Vietnam War, Cunningham is now reviled for a series of crimes that he and a handful of cronies, now called co-conspirators, committed.

'Extraordinary audacity'

Cunningham, in the words of San Diego U.S. Attorney Carol Lam, exercised "extraordinary audacity" in taking $2.4 million in three dozen acts of bribery and cheating on his taxes between 2001 and 2005.

Overnight, Cunningham fell from major American hero to major American criminal.

For his crimes, Cunningham, 64, now has the ignominious distinction of holding the No. 1 ranking on the list of Congress members who have received ill-gotten gains.

He made it there by accepting checks and cash, antiques, furniture, yacht club fees, boat repairs, moving costs, vacation expenses and a Rolls-Royce, all in violation of bribery statutes and all in exchange for steering defense contracts to friends, according to the plea deal he signed.

"The citizens who elected Mr. Cunningham assumed that he would do his best for them," Lam said shortly after getting his guilty pleas on Nov. 28. "Instead, he did the worst thing an elected official can do ---- he enriched himself through his position and violated the trust of those who put him there."

Cunningham is required by his plea agreement to give prosecutors information about his co-conspirators. He may be subjected to a polygraph examination if there is any doubt about the truth of what he tells.

On Feb. 27, he is scheduled to face sentencing that could land him 10 years in prison and a massive fine.

The prison time will give him plenty of opportunity to file the amended tax returns for the years 2001 through 2004 that the IRS has demanded and will likely render him broke, despite congressional and military pensions that should garner him somewhere around $75,000 a year.

Shortly after his guilty pleas were entered before U.S. District Judge Larry Alan Burns, Cunningham appeared before reporters outside the federal courthouse.

It was clear the man so often associated with the Navy flight school and Hollywood film "Top Gun" was now simply done.

The ashen-appearing former fighter pilot didn't explain why he did it, didn't say what motivated him to trade his honor and reputation for cash and goods. The only memorable line was a glimpse into the state of his soul.

"In my life I have known great joy and great sorrow," Cunningham said during his statement. "And now I know great shame."

Shame for all?

As his co-conspirators remain the subject of a federal probe, Cunningham's fall has left lots of flotsam in its wake, including an April 11 special election to fill out the eight remaining months on his unexpired term.

Among those ripples are questions for voters, some soul-searching for the news media, and perhaps a move for real reform in Congress.

For voters left without congressional representation until a replacement is elected, is there a collective shame for not watching their congressman more closely?

For the media, including the North County Times, that failed to notice or paid scant attention while the congressman was upgrading his ride to a Rolls-Royce, moving into a gated mansion and seemingly living high on the hog, what questions should there be, and have been, in newsrooms?

And where was Congress and its own watchdogs when Cunningham was seemingly raiding the national treasury to help two buddy defense contractors win Pentagon work? In taking their money in exchange for steering them work, Cunningham "received payments and benefits, and not because using Co-conspirators Nos. 1 and 2 was in the best interest of the country," according to his plea agreement.

Lessons for voters

Leon Panetta, a former California congressman and chief of staff to President Bill Clinton, said voters have the power to effect real change.

"Voters have got to stop taking members of Congress who seem to somehow get the notion that they are entitled to their seats for granted," Panetta said in an interview last week from his office at the Panetta Institute for Public Policy at Cal State Monterey Bay. "Redistricting has created safe seats to the point the public is almost apathetic about who represents them, and when the public isn't vigilant and doesn't pay attention, this is what can happen."

Change will happen if voters want it to, Panetta said.

"It really does rest with the electorate. Change happens within the institution itself only in times of crisis. If the voters get angry and disgusted enough, they can take it out on the entire institution.

"If I were an incumbent in Congress right now, I would not be resting easy."

On a personal note, Panetta said he was "astounded" at Cunningham's crimes.

"I just could not believe that somebody like him who had been around a while could assume he could do what he did and get away with it," he said. "It paints everybody as being in the same kind of bag, and it further damages trust in the institution."

San Diego political consultant Tom Shepherd of Shepherd and Associates said the 50th District may become ground zero for ethical reform.

"This is going to be a national debate in 2006, and North County voters are going to be on the cutting edge as a result of the special election," he said. "If voters want significant change, they are going to have to focus on these issues, and the whole Cunningham experience suggests there probably is a need for voters to do that."

Cunningham's crimes were in part a result of a congressional committee process that allows individual members to steer work to their friends, he said.

"The way the process works is clearly subject to tremendous abuse, and I think voters need to take a careful look at that and look for candidates willing to address those kinds of problems."

The Republican and Democratic parties would be wise to start that review before next year's elections, Shepherd added, citing the ongoing case against former House Republican majority leader Tom DeLay, accused of illegally steering money to Texas state legislators as well as violating House ethics rules in his dealings with lobbyist Jack Abramoff.

"The DeLay controversy gets far more publicity nationally, but it gets down to the same basic problem that Cunningham represents ---- the lack of accountability and the tremendous temptation for elected officials to succumb to financial interests."

The media

It was a Copley News Service report in June that started the unraveling of Randy Cunningham's web of deceit.

Marcus Stern, in the news service's Washington office, detailed how Mitchell Wade, founder of the defense firm MZM Inc., paid $700,000 more for Cunningham's Del Mar Heights home that he would sell it for less than a year later. That purchase provided the cash for Cunningham to buy the gated mansion in exclusive Rancho Santa Fe.

Until then, rarely was there a negative word about Cunningham, who had won regular endorsement for re-election from this newspaper.

At the Poynter Institute, a Florida-based journalism think tank and center for continuing education, vice president and senior scholar Dr. Roy Peter Clark suggested that until Stern's report, the media may have lost sight of its role as a government watchdog.

Newsroom budget cuts over the years that have reporters covering multiple beats and lack of money to fund bureaus in Washington are one part of the problem, Clark said.

"Communities should hold their news organizations accountable," he said last week. "Not necessarily for some sort of ideological bias, but in terms of performance and level of public service."

But the greater failing may have been in forgetting the watchdog role.

"Every news organization has to walk the line between skepticism and cynicism, and it appears there may not have been enough skepticism directed at this individual ---- anyone who looks at politics through rose-colored glasses is just a fool."

The adage "follow the money" wasn't done until Stern's report, something Roberta Baskin at the Center for Public Integrity said may have been the media's biggest sin.

"It's always about following the money," said Baskin, executive director of the nonprofit and nonpartisan center in Washington, which conducts investigative research and reports on public policy issues.

"You always need to look beyond what people say and what they do to see where the money is coming from and where it's going," she said.

Stern's story did just that. Until then, no media outlet in San Diego or in Washington had really taken a hard look at Cunningham and where he was getting his money and where it was being spent.

North County Times editor Kent Davy said that when Cunningham was running for re-election in 2004, the newspaper failed to look below the surface.

"If we had been much more aggressive about trying to understand his finances and his lifestyle, we might have stumbled onto the key to the story," Davy said. "The recommendations about following the money are dead-on, and that implies that we need to be doing routine record checks of people in the news so that things like the house transaction don't surprise us."

While not first with the initial story about the home sale, Davy said the newspaper "responded in a very credible manner which has significantly pushed the story along."

Congress

With its reputation tarnished even further by Cunningham and other ongoing scandals and ethics cases, political observers say the time for meaningful reform has arrived.

One seemingly simple step has been taken through a handful of bills that seek to accomplish the same thing ---- barring pension benefits for federal employees, including congressional representatives, convicted of major felonies. To lose the pensions now, members of Congress must be convicted of treason-related crimes.

The methods by which members of the appropriations or intelligence committees can steer contract awards through one or two telephone calls to Defense Department officials also may come under scrutiny.

And the House ethics committee, formally known as the Committee on Standards of Official Conduct, is supposed to start functioning in 2006 after more than a year of inaction because of partisan bickering.

A bipartisan probe of Cunningham's access to national secrets is under way, a probe ordered to make sure he wasn't brokering classified intelligence.

Calls for meaningful reform from public interest and watchdog groups seem to be getting more play, but whether those will bear any fruit is far from certain.

Keith Ashdown at the Washington watchdog group Taxpayers for Common Sense says he, too, was fooled by Cunningham.

"I professionally watch Congress all the time, and the lesson I've learned is don't assume anything, because it can be much worse than it actually appears. The actions of one congressman have served to make millions of voters even more skeptical of Congress."

Ashdown said Cunningham is a case where one rotten apple really has spoiled the bunch.

"You can't give anyone running for Congress the benefit of the doubt any more. They're all guilty now until proven innocent. When someone like Cunningham falls from grace the way he did, you really have to question everyone who has an office at the Capitol.

"The challenge is, how do you provide that oversight and at the same time not lose faith in our elected leaders and that they really are trying to do their best?"

Cunningham's future

In his statement after his guilty plea, Cunningham asked for forgiveness, offered a brief apology and vowed to "use the remaining time that God grants me to make amends."

It was not the first time the Los Angeles-born Cunningham had invoked the name of God.

At the start of each Congress, Cunningham stood up with more than 400 other members of the U.S. House of Representatives and took the following oath:

"I do solemnly swear that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion, and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God."

The day he's scheduled to face sentencing is also the last day to file for the special election to fill out his unexpired term. Cunningham faces five years in federal prison for the one count of bribery and an additional five years for the one count of tax evasion he has admitted. He also faces a $350,000 fine.

The federal prison in Lompoc, 175 miles northwest of Los Angeles, is a potential destination. From there, Cunningham would be able to hear and probably see jet fighters taking off and landing at the adjacent Vandenberg Air Force Base. It will be a long way from his own days as a fighter jock.

This spring, the IRS plans to auction off many of the antiques, rugs and furniture seized from Cunningham's home.

In court, Cunningham's wife, Nancy, continues to battle the government for a portion of the recent sale of their Rancho Santa Fe home for $2.6 million.

As her husband prepares to spend what those close to the case believe will be years behind bars, he leaves public life as a disgraced lawbreaker with no more standing ovations and only one certain new title ---- federal inmate.

Contact staff writer Mark Walker at (760) 740-3529 or mlwalker@nctimes.com.

Former Congressman Randy "Duke" Cunningham wipes tears from his eyes in this file photo, taken after he announced his resignation Nov. 28. Cunningham left office after pleading guilty to taking $2.4 million in bribes, leaving much of North County without a representation in Congress and opening the gates for a race for his spot in Washington. /NCT file photo.

North County Times / The Californian - Top Stories - Wilkes' company tax bill mushrooms

2005-12-29T09:49:00.000-05:00

By: WILLIAM FINN BENNETT - Staff Writer

The delinquent property tax bill continues to grow for the multimillion-dollar Poway property controlled by Brent Wilkes, one of the alleged co-conspirators alluded to in court documents in the Randy "Duke" Cunningham bribery scandal, San Diego County Treasurer-Tax Collector Dan McAllister said Wednesday.

Wilkes and two others are being investigated by federal authorities for their connections to Cunningham, who pleaded guilty in late November to tax evasion and taking bribes from the co-conspirators.

As of Dec. 1, a real estate company controlled by Wilkes was in arrears to the tune of $40,000 on the ADCS property tax bill.

McAllister said the tax bill plus penalties has now mushroomed to more than $170,000, after Wilkes failed to pay his latest nearly $120,000 tax bill, which came due Dec. 12.

The penalties will continue to grow at the rate of 1.5 percent per month until the back taxes are paid, McAllister added.

"We cannot foreclose on the property to redeem taxes until five years have passed, (but) interest and penalties will continue to grow in addition to the annual taxes not paid," he said in a Wednesday phone interview.

But it's not as if Wilkes can escape payment on the tax bill, McAllister said.

"We have a very strong collection rate, close to 99 percent," he said.

County property records show that Wilkes is one of the partners in Al Dust Properties, LLC, which owns the headquarters for ADCS Inc., a defense company located in the Parkway Business Center at 13970 Stowe Drive in Poway.

Michael Lipman, an attorney representing Wilkes, did not return phone calls Wednesday seeking comment.

Both ADCS and Al Dust Properties are subsidiaries of Wilkes Corp., founded by Wilkes. His Poway home and ADCS headquarters were raided Aug. 16 as part of a federal investigation of Cunningham, R-Escondido.

The California secretary of state's Web site lists Wilkes as the contact person for Al Dust Properties as of Dec. 18, 2000.

The headquarters building reportedly cost $11 million to build. It was put up for sale in the fall, John Gross of Colliers International, a real estate firm that represents the owner, told the North County Times in late November.

Gross could not be reached Wednesday for comment on this story.

Tax Collector McAllister said that his office had not been contacted by either Wilkes or anyone connected to Al Dust Properties LLC to discuss the company's failure to pay what it owes.

"It's unusual for someone to owe so much and to flounder not paying and not telling us what is going on," McAllister said.

Sources close to the investigation have confirmed that Wilkes is one of three unnamed co-conspirators in the Cunningham plea agreement.

Court documents appear to indicate and sources close to the investigation confirm that the other two co-conspirators are Washington defense contractor Mitchell Wade, whose company received more than $163 million in defense contracts in recent years with Cunningham's help, and New York businessman Thomas Kontogiannis.

In court papers, Cunningham admitted receiving bribes in exchange for steering tens of millions in government business to defense contractors.

ADCS received more than $76 million in government contracts from 2000-04, during Cunningham's service on the powerful House Appropriations Committee, including its defense subcommittee.

Wilkes is a longtime friend and campaign contributor to Cunningham. Wilkes, his wife and an ADCS political action committee donated more than $20,000 in campaign contributions to Cunningham in recent years. Another company controlled by Wilkes also provided a number of trips to Cunningham on a corporate jet the company partially owned.

Those favors were legal under current rules, though the amounts Cunningham reimbursed the company for the trips was significantly less than what he would have paid to fly the same routes on regularly scheduled commercial flights.

Definitely not legal, however, were the $2.4 million in bribes which court records show that Cunningham received from the three co-conspirators. That amount places Cunningham first on the list of sitting members of Congress who have ever taken bribes.

U.S. Attorney's office officials in San Diego have said that their investigation into the co-conspirator's ties to Cunningham continues.

Lipman, Wilkes' attorney, was quoted in USA Today and the Washington Post just after Cunningham's guilty pleas as saying Wilkes was the unidentified "Co-conspirator No. 1" described in the court documents. Lipman has previously been quoted in various news articles as saying that ADCS and Wilkes acted legally and properly.

Sketchy Contracts And Bidding Busts

2005-12-25T11:30:00.000-05:00

Sunday, December 25, 2005; Page F05

The world of government contracting had more than its share of missteps. Rep. Randy "Duke" Cunningham (R-Calif.) resigned from the House after pleading guilty to taking bribes from two defense contractors. The Department of Homeland Security, meanwhile, was buffeted by reports of wasteful spending as it threw billions of dollars at security problems after the Sept. 11, 2001, terror attacks. Its disaster relief arm was berated for inept handling of contracts after Hurricane Katrina.

And sticky fingers, it was alleged, carried off some of the $20 billion designated for rebuilding Iraq. A contractor, two Army reserve lieutenant colonels and a civilian employee of the Coalition Provisional Authority were nabbed on charges they rigged bids on reconstruction work so they could siphon off millions in cash for themselves. And the civilian, who had charge of $82 million in funds, already happened to be a convicted felon. His criminal record had been overlooked by the contractor hired to provide the CPA with workers.

-- Charles R. Babcock

Cunningham's mansion proceeds still under debate | North County Times

2005-12-21T10:05:00.000-05:00

By: MARK WALKER - Staff Writer

Federal prosecutors and attorneys for Randy "Duke" Cunningham have resumed skirmishing over how to divide the proceeds from the sale of the Rancho Santa Fe mansion that became the focal point of a scandal that led to the former 50th District congressman's resignation after he admitted taking bribes and cheating on his taxes.

Randy and Nancy Cunningham sold the gated mansion for $2.6 million earlier this month, and a hold has now been lifted on the government's civil suit over who gets that money. The suit had been on hold while the criminal probe was under way.

The more than 7,000-square-foot mansion was the catalyst for a San Diego federal grand jury investigation that resulted in Randy Cunningham's Nov. 28 guilty plea and Dec. 1 resignation.

His portion of the proceeds were forfeited to the government in his guilty plea. But Nancy Cunningham, who argues she is an innocent party, is fighting for what she contends through her attorneys is a portion of the money she is entitled to under state community property laws.

Shortly after Cunningham announced in July he would not seek re-election and that he and his wife were planning to sell the home, government attorneys filed suit, contending the gated estate was purchased through bribes that Randy Cunningham had demanded and to which he admitted in his guilty plea.

During a conference Friday, prosecutors and attorneys for the Cunninghams told U.S. District Court Magistrate Anthony J. Battaglia that they were "close to completing a resolution" with regard to Randy Cunningham's interests in the more than 7,000-square-foot home, according to a two-page report filed by the magistrate.

Battaglia's report indicates Nancy Cunningham's claim to an unspecified portion of the money is far from being resolved. The magistrate wrote the attorneys reported being close to "completing a resolution with regard to the interest of Mr. Cunningham and are discussing a resolution with regard to the interest of Mrs. Cunningham."

Nancy Cunningham's attorney, Michael Attanasio, said she continues to assert a claim to money from the sale. He would not say how much she is seeking.

"Mrs. Cunningham will continue to protect her community property rights and will seek to reach a fair agreement with the government regarding those rights," Attanasio said.

In October, Attanasio filed an argument in the case contending that Nancy Cunningham was what is known in the law as "an innocent owner." He declared that she had no knowledge of any ill-gotten gains used by the couple when they purchased the home in late 2003 for $2.55 million.

In a declaration filed in the fall by Nancy Cunningham, she said she was "unaware" of any acts of bribery committed by Randy Cunningham.

She also has argued that any money the government is seeking stemmed from actions by others and that the liability should "be apportioned according to the relative degrees of fault."

In the plea agreement and an accompanying outline of its criminal case against her husband, government attorneys never mention Nancy Cunningham.

Last week, the three assistant U.S. attorneys handling the case, Jason Forge, Phillip Halpern and Sanjay Bhandari appeared on San Diego's KPBS "Full Focus" television show. When asked during the program whether Nancy Cunningham was under any scrutiny, Forge declined to comment beyond saying the plea agreement was specific to Randy Cunningham only.

The Rancho Santa Fe home was bought by the Cunninghams after they sold their home in Del Mar Heights to defense contractor Mitchell Wade for $1.675 million. Eleven months after he made the purchase, Wade sold the Del Mar Heights home at a $700,000 loss.

Wade, who sources have alleged is one of the co-conspirators in the Cunningham plea agreement, is the founder of MZM Inc., a Washington defense firm that relied on Cunningham and his position in Congress to help secure Defense Department contracts.

Wade and Brent Wilkes, owner of Poway defense firm ADCS, remain subjects of the ongoing criminal investigation.

The next action in the civil suit involving the Rancho Santa Fe property is set for Jan. 18, at which time "further dates and deadlines for settlement or litigation will be set," the magistrate wrote in his report following Friday's case conference.

Randy Cunningham is scheduled to be sentenced Feb. 27. He faces up to 10 years in federal prison and a $350,000 fine.

Democrat criticizes Cunningham Intelligence Committee probe

2005-12-16T09:46:00.000-05:00

Plans for an investigation of whether ex-Rep. Randy "Duke" Cunningham compromised intelligence are inadequate, the top Democrat on the House Intelligence Committee said Thursday.

California Rep. Jane Harman, D-Venice, said Intelligence Committee Chairman Pete Hoekstra, R-Mich., should use outside, nonpartisan or bipartisan staff for the probe of Cunningham's work on the committee.

"The chairman's decision to use existing committee staff to review this issue threatens to compromise our ability to conduct a thorough, expeditious and bipartisan investigation of the Cunningham matter," Harman said in a statement. "Dedicated temporary staff with extensive investigative experience and appropriate security clearances must be hired ... Existing staff cannot be expected to investigate their bosses."

Cunningham, a California Republican who resigned from Congress last month after admitting taking $2.4 million in bribes from defense contractors and others, had served since 2001 on the Intelligence Committee, and since this year as chairman of the panel's subcommittee on terrorism and human intelligence.

Hoekstra announced shortly after Cunningham's resignation that he had asked committee attorneys to review Cunningham's work on the panel to ensure he didn't improperly influence committee actions or decisions.

"The form that this inquiry is going to take is something that is still being discussed by the chairman and ranking member," Hoekstra spokesman Jamal Ware said Thursday. "The chairman is not willing to play this inquiry out in the press."

Meanwhile, Gov. Arnold Schwarzenegger on Thursday set an April 11 special election to replace Cunningham. If no candidate wins a majority in the primary, the top vote-getters in each party will face off June 6, the date of a statewide primary.

County officials had asked Schwarzenegger set the April 11 special election to consolidate the possible run-off election and save the county $1.3 million.

Several candidates have announced their candidacy for the seat in the heavily Republican district, including former San Diego-area Rep. Brian Bilbray; former state Sen. Bill Morrow and former California Assemblyman Howard Kaloogian. Democrat Francine Busby, who lost to Cunningham in 2004 by 22 percentage points, is also running again.

Cunningham Plea Sparks Pension Questions - Yahoo! News

2005-12-15T09:38:00.000-05:00

By ERICA WERNER, Associated Press Writer

Republican House members disturbed that their former GOP colleague Randy "Duke" Cunningham will get to keep his pension despite pleading guilty to bribery want to pass a law to strip federal pensions from white-collar criminals.

Under federal law, only a conviction for a crime against the United States, such as treason or espionage, can cause a member of Congress or other federal employee to lose his or her government pension.

That means Cunningham, a California Republican, will keep his pension despite admitting taking $2.4 million in bribes from defense contractors and others in exchange for government contracts.

Cunningham's congressional pension would be around $40,000 per year, according to an Office of Personnel Management formula. He resigned last month and faces 10 years in prison when he's sentenced in February.

"It's time to reassure the American people that we are serious about upholding ethical standards," Rep. Lee Terry (news, bio, voting record), R-Neb., said Wednesday.

"There's no doubt that Duke Cunningham is the present impetus for our efforts," he added.

Terry and five other Republicans spoke at a Capitol Hill press conference Wednesday to introduce the "Public Trust and Accountability Act." The bill would add a list of white collar crimes including bribery, solicitation of gifts, perjury, making false claims and lying to a grand jury to the offenses that would result in loss of federal pensions. The legislation would apply to all federal employees.

Similar legislation by Rep. Mark Kirk (news, bio, voting record), R-Ill., would apply only to members of Congress. The House passed a bill like that in 1996 but it didn't make it through the Senate.

Various members of Congress, mostly Republicans, are under scrutiny for possible ethics violations, and lawmakers said there was a critical mass in support of denying pensions to white-collar criminals.

"I think it's something we need to do in light of everything that's gone on," said Rep. John Sullivan (news, bio, voting record), R-Okla.

Austin DA Investigates Cunningham's Alleged Co-Conspirator - Yahoo! News

2005-12-15T09:36:00.000-05:00

Defense contractor Brent Wilkes, an alleged co-conspirator in the federal bribery case against former Congressman Randy "Duke" Cunningham, is already in trouble with the U.S. District Attorney's Office in San Diego. But now, the state of Texas is investigating him.

The U.S. Attorney's Office said Wilkes gave or arranged hundreds of thousands of dollars worth of gifts, cash and favors for Cunningham.

Now, the district attorney in Austin, Texas, is asking for records relating to contributions made by Wilkes, his vice president Max Gelwix and related companies.

Those donations allegedly went to two political action committees founded by former U.S. House Majority Leader Tom Delay, who is also under investigation, 10News reported.

Meanwhile, Republicans on Capitol Hill are taking a hard look at Cunningham's situation and want to make changes.

Lee Retty, a Republican representative from Nebraska, and fellow Republicans are proposing the Public Trust and Accountability Act, which would strip any federal employee of their pension if they commit a white-collar crime.

As it stands, Cunningham is allowed to keep his pension, despite the bribery plea.

No one associated with the subpoenas returned 10News' calls for comment.

CNN.com - Prosecutor in DeLay case subpoenas records from defense contractors - Dec 13, 2005

2005-12-13T21:18:00.000-05:00

California companies tied to Cunningham bribery case

WASHINGTON (AP) -- A Texas prosecutor has issued subpoenas for bank records and other information of a defense contractor involved in the bribery case of a California congressman as part of the investigation of former House Majority Leader Tom DeLay.

District Attorney Ronnie Earle issued subpoenas late Monday afternoon for California businessmen Brent Wilkes and Max Gelwix, records of Perfect Wave Technologies LLC, Wilkes Corp. and ADCS Inc. in connection with a contribution to a fundraising committee at the center of the investigation that led to DeLay's indictment on money laundering charges.

Perfect Wave contributed $15,000 in September 20, 2002 to Texans for a Republican Majority, a fundraising committee founded by DeLay, R-Texas.

Former Rep. Randy "Duke" Cunningham resigned in late November after pleading guilty to taking $2.4 million in bribes to steer defense contracts to companies.(Full Story)

Lawyer: 'We're not concerned about it'
"He can subpoena all he wants, there's nothing there," said DeLay attorney Dick DeGuerin. "I think he's trying to dig himself out of a hole. We're not concerned about it."

The subpoenas also seek correspondence and internal accounting records.

Wilkes, head of Wilkes Corp., is one of four unnamed coconspirators listed in Cunningham's plea agreement, Wilkes' attorney, Michael Lipman of San Diego, has said. Lipman did not immediately return calls for comment.

Defense contractor ADCS and Perfect Wave Technologies are subsidiaries of Wilkes Corp.

Gelwix was listed in federal campaign records last year as president and CEO of Perfect Wave Technologies. A message left at his office was not immediately returned.

Wilkes' company also hired Alexander Strategies, a consulting firm that employed DeLay's wife Christine. His private jet company, Group W Transportation, provided flights to DeLay three times. DeLay reimbursed Group W as required, records show.

DeLay was forced to step aside as majority leader in late November after he was indicted on state charges of conspiracy to violate Texas election laws. A second grand jury indicted him on charges of conspiracy to launder money and money laundering charges.

The initial charges have been dismissed, but a judge has let stand the latter charges and DeLay faces possible trial on them.

Earle alleges that DeLay and two coconspirators funneled $190,000 in corporate contributions through the Texas political committee and an arm of the National Republican Committee to seven GOP state legislative candidates.

Earle alleges DeLay and his two associates were trying to circumvent Texas' law prohibiting spending corporate money on campaigns, except for administrative expenses.

DeLay, who denies wrongdoing, has been pressing for a quick resolution to his case so he can regain his majority leader job before his colleagues call for new leadership elections.

But Earle on Monday asked a judge to halt DeLay's trial while he appeals the dismissal of the conspiracy charge. The judge in the case has said he is unlikely to move forward with the case while the district attorney appeals, but set a pretrial hearing for December 27.

No intelligence breaches surface against 'Duke' North County Times - North San Diego and Southwest Riverside County News

2005-12-13T09:53:00.000-05:00

By: MARK WALKER and WILLIAM FINN BENNETT - Staff Writers

No allegations of trading secrets for cash have surfaced since former 50th District congressman Randy Cunningham resigned Nov. 28, a spokesman for the U.S. House of Representatives intelligence committee said Monday.

During the five-month period that Cunningham was being investigated for taking bribes from defense contractors, he continued to have full access to top-secret, classified briefings from the Central Intelligence and National Security agencies as well as numerous other U.S. intelligence groups.

Watchdog groups and some members of Congress have expressed concerns that Cunningham, who has admitted taking more than $2.4 million in bribes between 2001 and 2005, may have been susceptible to blackmail or other forms of corruption in relation to his access to national secrets.

Cunningham was a member of the Permanent Select Committee on Intelligence since 2001 and head of its subcommittee on terrorism and human intelligence. He is now being investigated to see if any improprieties occurred in his role on those congressional panels.

The committee oversees $40 billion in annual spending on spy agencies. Much of that money is directed to the Pentagon's so-called "black budget" for super-secret projects, many of which are awarded on a no-bid basis and not subject to oversight in the normal defense contracting process.

Intelligence committee spokesman Jamal Ware said there was never an attempt by any federal agency or member of Congress to restrict or end Cunningham's access. He added that there have been no accusations of impropriety regarding Cunningham and national secrets.

"There have been zero allegations of any wrongdoing, but as the chairman said, we have to be certain," Ware said from his office on Capitol Hill.

In addition to his role on the intelligence committees, Cunningham was a member of the Appropriations Subcommittee on Defense. That also gave him access to classified documents.

John Scofield, a GOP Appropriations Committee spokesman, told the North County Times last week that shortly after the federal investigation began, committee staffers examined the projects Cunningham worked on and concluded each was vital to the nation's defense and took no further action.

Investigation ongoing

Ware said intelligence committee Chairman Pete Hoekstra, R-Michigan, has met with committee members and staffers to discuss Cunningham's committee activities and the parameters of the investigation he ordered earlier this month.

"The staff will conduct the investigation, and undoubtedly there will be consultation with the Justice Department," Ware said. "There has to be a certainty that everything was done aboveboard. Members on both sides of the aisle take the security of the committee very seriously."

Hoekstra, who did not return telephone calls from the North County Times seeking comment, has not set a timetable for completing the investigation, Ware said.

Justice Department officials in Washington did not return calls seeking comment on whether federal officials took any action or expressed any concern between June and November about Cunningham's access to national secrets.

The 64-year-old Cunningham became the focus of a San Diego federal grand jury investigation led by the U.S. attorney's office in June. The investigation began after it was reported that a defense contractor had paid Cunningham $700,000 more for a home in Del Mar Heights than he would end up selling it for less than a year later.

On Nov. 28, Cunningham pleaded guilty to one count of bribery and one count of tax evasion, acknowledging he had accepted more than $2.4 million in bribes in exchange for steering Pentagon contracts to two defense contractors.

'Open game'

According to the plea agreement signed by Cunningham, if prosecutors discover any criminal acts involving someone other than his co-conspirators, the disgraced former lawmaker could face additional prosecution.

"If he was committing other offenses in other jurisdictions and hasn't told us, he's open game," assistant U.S. Attorney Phillip Halpern in San Diego said Monday.

The 33-page plea agreement, in which Cunningham admitted taking bribes on more than two dozen occasions and filing false tax returns from 2001 to 2004, states "this plea agreement is limited to the United States Attorney's Office for the Southern District of California and cannot bind any other federal, state or local prosecuting, administrative or regulatory authorities."

The known co-conspirators in the case are Mitchell Wade, founder of the defense firm MZM Inc., Brent Wilkes, owner of the Poway defense firm ADCS Inc., and New York developer Thomas Kontongiannis.

Court documents allege that Cunningham took money and goods from the co-conspirators in the form of real estate deals, antiques and other gifts, including the house deal and a rent-free stay on Wade's yacht in Washington.

Plea deals could be on the way

Former prosecutors and other sources close to the investigation say they expect plea deals involving the co-conspirators to emerge soon, largely because of Cunningham's agreement to tell federal authorities everything about the deals he reached with those individuals.

During the summer, federal authorities raided the homes and offices of the three co-conspirators, carting off boxes of evidence.

IRS spokeswoman Tami Stine in San Diego said Monday that additional plea deals "may be in the wind."

FBI spokeswoman April Langwell in San Diego confirmed that deals could be near.

"Agents are getting their ducks in a row," she said, adding she could not be more specific.

Fall of Cunningham could hurt county in Congress North County Times - North San Diego and Southwest Riverside County News

2005-12-11T10:09:00.000-05:00

By: WILLIAM FINN BENNETT - Staff Writer

While many people cheered Randy "Duke" Cunningham's exit from Congress late last month, the loss of a powerful senior congressional representative could mean that San Diego County ends up getting a smaller piece of the budget pie in the coming years, congressional watchdogs say.

Cunningham, who resigned in November after pleading guilty to taking more then $2.4 million in bribes, served eight consecutive terms and sat on two congressional committees and two subcommittees --- making him a powerful player in the fight for federal funds.

Here's how it works: Congressional committees award lucrative government contracts and funding for public-improvement projects. In the hardball world of congressional politics, each member fights to secure funding for projects in his or her district ----- projects that translate to more jobs for the local economy and a greater quality of life for residents.

A spokesman for the Washington-based Center for Responsive Politics said Friday that senior members, such as Cunningham, who sit on powerful committees play a vital role in bringing more jobs and tax revenues home to their districts.

"It hurts the district to lose a member like him with seniority and positions on committees like that, (which) can bring a lot of pork back to the district," said Larry Noble, executive director for the center. The nonprofit organization touts itself as being a nonpartisan research group that studies money in politics.

'The consummate deal-maker'
Cunningham "was very good at getting money for his region," said Keith Ashdown, a spokesman for Taxpayers for Common Sense, another Washington watchdog group that tracks the federal budget each year. "He was the consummate deal-maker who knew how to leverage his political influence to take care of (his district)."

For example, in November, Cunningham's office put out a press release that touted the tens of millions of dollars for transportation and construction projects he was able to bring to San Diego County this year through his position as a member of the House Appropriations Committee.

According to the statement, funding for those projects included: $12.2 million for the Oceanside-Escondido Sprinter Project; $1 million for increasing the number of lanes on Interstate 15; $600,000 for the Sorrento Valley Road and Genessee Avenue Interchange; $500,000 for the Solana Beach Intermodal Facility; $400,000 for the widening of northbound lanes on Highway 56 and Interstate 5; $250,000 for the city of Encinitas' San Elijo Lagoon Visitors Center and more than $230 million to build a new federal courthouse in San Diego.

Add-ons add up
Each year, the president sends his budget to Congress. Then, members of the House and Senate meet in committees, add projects for their districts to the budget, and request funding to pay for them. Those add-ons, known at the Capitol as earmarks, have increased dramatically in number and cost over the past decade.

Ashdown said Friday that the number of projects added onto the budget for individual Congress members' districts has quadrupled since 1994 ---- to 15,500 in the 2004-05 budget year. The cost of those projects, meanwhile, has tripled in the same period, to $32.6 billion.

The House Appropriations Committee on which Cunningham sat is one of the most important committees in Washington when it comes to controlling federal purse strings, Ashdown said.

San Diego County still has U.S. Rep. Duncan Hunter, R-El Cajon, who is the chairman of the House Armed Services Committee, which could help the San Diego region get more defense contracts.

However, that committee doesn't control the federal budget the way the Appropriations Committee does, so it's hard to say how much Hunter will be able to make up for the loss of Cunningham, Ashdown added.

The big question is whether U.S. Rep. Jerry Lewis, R-Redlands, who is the chairman of the House Appropriations Committee, will pick up the slack for San Diego County and continue to steer projects and funding to this region, Ashdown said.

It all comes down to "whether Jerry Lewis is going to haul San Diego water, now that Cunningham is going to the clink," Ashdown said.

Public works dollars at stake
The Center for Responsive Politics' Noble said he doesn't expect that local defense contractors will be significantly affected by the loss of Cunningham. The defense industry tends to extend their lobbying largesse beyond their local congressional representatives, he said.

"Defense contractors will obviously court their local congressman, but they will also court powerful members across the nation through campaign contributions and lobbying and providing other perks," Noble said.

He added that the loss of Cunningham will tend to have a greater effect on public infrastructure projects.

"There are some things you really have to rely on your local congressman to get you, like roads and local infrastructure building," Noble said. "Those are the areas that will lose some influence."

The loss of Cunningham is just part of the cyclical nature of power in the nation's capital, Ashdown said.

"It's inevitable ---- all regions lose senior members, but they also rebound, because new people get into positions of power," Ashdown said.

Typically, the longer Congress members are in office, the more power they gain as they are appointed to powerful committees. Cunningham was in Congress for a decade and a half.

Within the next few days, Gov. Arnold Schwarzenegger is expected to announce a special election to pick a replacement for Cunningham to serve out the remainder of his term though the end of 2006. A regularly scheduled primary election will be held in June and a general election in November, and the winner of that election will then serve in Congress for the following two years.

So far, a single Democrat and more than a half-dozen Republicans have announced they will run in the June primaries and/or the special election.

Noble said that a number of factors can lessen or lengthen the amount of time it takes for a freshman member to move up the food chain of Washington power.

"Some new members (move up) quickly ----- others take longer," Noble said. "It depends on how well that person gets along in the party, who the ruling party is, how good a fundraiser you are. Some members have very strong contacts, others are seen as outsiders."

Cunningham case casts new light on donations

2005-12-11T10:06:00.000-05:00

CONTRACTORS' MONEY WIDELY DISTRIBUTED
By Erica Werner
Associated Press

WASHINGTON - The two defense contractors who allegedly bribed ex-Rep. Randy ``Duke'' Cunningham, R-Escondido, with cash and gifts in exchange for government business spent hundreds of thousands of dollars to curry favor with other key lawmakers, records show.

One of the contractors, Brent Wilkes, provided private jet flights for Reps. Tom DeLay, R-Texas, and Roy Blunt, R-Mo., DeLay's stand-in as majority leader while DeLay fights money-laundering charges in Texas.

Wilkes also became a ``pioneer'' for President Bush by raising $100,000 for his 2004 re-election and donated more than $70,000 to California Gov. Arnold Schwarzenegger, who appointed him to two state boards. Wilkes resigned from those positions last week at the suggestion of the governor's office, said Margita Thompson, the governor's press secretary.

There is no indication the donations were improper. Prosecutors have not suggested that the investigation that snared Cunningham -- he resigned last week after pleading guilty to taking $2.4 million in bribes -- involves other lawmakers.

Wilkes and the other defense contractor, Mitchell Wade, along with their families and firms, donated generously to dozens of candidates, mostly Republicans, beginning in the 1990s.

Among the top beneficiaries, according to federal campaign records:

? DeLay, who got about $70,000 from Wilkes and his associates.

? House Appropriations Committee Chairman Jerry Lewis, R-Redlands, who got about $50,000 from Wilkes, Wade and their associates.

? Rep. John Doolittle, R-Granite Bay, a member of the Appropriations Committee, who got about $46,000 from Wilkes and his associates.

In addition, House Armed Services Committee Chairman Duncan Hunter, R-El Cajon, got about $46,000 from Wilkes, Wade and their associates, his campaign treasurer said.

Wilkes' and Wade's political activity came as they landed valuable government contracts, drawing the attention of campaign finance watchdog groups.

``There's no question that both Wilkes and Wade were expert at greasing the wheels of the legislative machine,'' said Keith Ashdown, vice president of Taxpayers for Common Sense. ``They knew who and when to give money to, and it really gave them free rein over taxpayer-funded defense contractors.''

The list of other lawmakers who took money includes Reps. Katherine Harris, R-Fla.; Virgil Goode, R-Va.; Alan Mollohan, D-Va., top Democrat on the House Ethics Committee; House Intelligence Committee Chairman Pete Hoekstra, R-Mich.; and Sen. Larry Craig, R-Wyo.

Craig, Mollohan, DeLay and Doolittle have said they'll hang on to the money. As of Thursday, Goode hadn't decided what to do, his press secretary said.

Meanwhile, more than a half-dozen of the lawmakers who took money -- including Hunter, Lewis, Hoekstra and Harris -- have announced plans to give it to charities, seeking to distance themselves from the contractors.

Hunter released two letters Thursday that he wrote to Pentagon officials in 1997 and 2000 urging them to use their own judgment on pursuing projects to convert paper documents to digital form -- the specialty of Wilkes' company ADCS, headquartered in Hunter's San Diego-area district.

Neither Wilkes nor Wade is named in Cunningham's plea agreement, in which he admits taking cash and gifts including antiques and a Rolls-Royce.

FOXNews.com - Contractors in Cunningham Probe Supported Other Lawmakers

2005-12-09T10:58:00.000-05:00

WASHINGTON ? Two defense contractors at the center of ex-Rep. Randy "Duke" Cunningham's bribery case also spent hundreds of thousands of dollars to curry favor with other influential lawmakers, records show.

One contractor, Brent Wilkes, provided private jet flights to lawmakers, including Reps. Tom DeLay, R-Texas, and Roy Blunt, R-Mo., who is serving as majority leader while DeLay fights money-laundering charges in Texas.

Wilkes also raised at least $100,000 for President Bush's 2004 re-election bid and donated more than $70,000 to California Gov. Arnold Schwarzenegger, who appointed him to two state boards.

There's no indication that these donations were improper. Prosecutors have not suggested that the investigation that snared Cunningham, R-Calif. ? who resigned last week after pleading guilty to taking $2.4 million in bribes ? involves other lawmakers.

Wilkes and defense contractor Mitchell Wade, along with their families and companies, donated generously to dozens of political campaigns ? mostly Republican ? beginning in the 1990s. Among the top beneficiaries, according to an AP analysis of records from PoliticalMoneyLine, which tracks campaign spending, were:

?DeLay, who got $70,000 from Wilkes and his associates.

?House Armed Services Committee Chairman Duncan Hunter, R-Calif., who got $46,000 from Wilkes, Wade and their associates.

?House Appropriations Committee Chairman Jerry Lewis, R-Calif., who got about $50,000 from Wilkes, Wade and their associates.

?Rep. John Doolittle, R-Calif., a member of the House Appropriations Committee, who got about $46,000 from Wilkes and his associates.

The contractors' political activity came as they landed valuable government contracts, drawing the attention of campaign finance watchdog groups.

"There's no question that both Wilkes and Wade were expert at greasing the wheels of the legislative machine," said Keith Ashdown, vice president of Taxpayers for Common Sense. "They knew who and when to give money to, and it really gave them free rein over taxpayer-funded defense contractors."

The list of lawmakers who took money also includes Rep. Katherine Harris, R-Fla.; Rep. Virgil Goode, R-Va.; Rep. Alan Mollohan, D-Va., top Democrat on the House Ethics Committee; House Intelligence Committee Chairman Pete Hoekstra, R-Mich.; and Sen. Larry Craig, R-Wyo.

Hunter, Lewis, Harris and Hoekstra have donated the money to charity, or plan to. Craig, Mollohan, DeLay and Doolittle have said they will hang on to it. As of Thursday, Goode had not decided, an aide said.

"I just think it was the appropriate thing to do," said Hunter, who is giving the money to help injured Marines. He also released two letters Thursday that he sent Pentagon officials in 1997 and 2000 urging them to use their judgment on pursuing projects to convert paper documents to digital form ? the specialty of Wilkes' company ADCS Inc., which has its headquarters in Hunter's San Diego-area district.

Published reports have said Cunningham and Hunter promoted such programs in the face of Pentagon opposition.

Neither Wilkes nor Wade is named in Cunningham's plea deal, in which he admits taking cash and gifts including antiques and a Rolls-Royce.

The plea mentions four unnamed coconspirators, who have not been charged. Details make clear that coconspirator .2 is Wade; Wilkes' lawyer, Michael Lipman, has confirmed that Wilkes is coconspirator .1.

Wade's lawyer declined comment Thursday; a message left with Lipman was not immediately returned.

Wilkes and his wife and companies donated heavily to Schwarzenegger; the governor subsequently appointed him to a state fair board and a board that oversees racetrack issues. Wilkes resigned those positions last week at the suggestion of Schwarzenegger's office.

Wilkes' donations to DeLay included $15,000 from one of his companies to Texans for a Republican Majority, the state committee whose spending is at issue in DeLay's criminal case. Wilkes' company also hired Alexander Strategies, a consulting firm that employed DeLay's wife, Christine.

Wilkes' private jet company, Group W Transportation, provided flights to DeLay three times and Blunt twice. In each case the lawmakers reimbursed Group W as required, records show.

Sometimes donations from Wade or Wilkes came around the same time their companies were getting contracts or lawmakers were passing favorable legislation.

Wade's company, MZM, got a five-year blanket purchase agreement contract from the General Services Administration that went into effect May 13, 2002. On May 15, 2002, MZM donated $1,000 to Cunningham.

Wilkes and his associates increased their political donations to the tens-of-thousands-per-year level about 1996. In 1996, 1997 and 1998 lawmakers earmarked money for document conversion programs even though none was requested in the president's budget, and ADCS got a major contract to digitize documents in the Panama Canal Zone around the time of the canal handover in 1999.

MercuryNews.com | 12/09/2005 | Cunningham case casts new light on donations

2005-12-09T09:42:00.001-05:00

Cunningham Sells Calif. Mansion for $2.6M - Yahoo! News

2005-12-09T09:42:00.000-05:00

Former U.S. Rep. Randy "Duke" Cunningham has sold his mansion to a publishing heir for $2.6 million, slightly more than he paid for it two years ago.

Cunningham, who resigned from Congress after pleading guilty to accepting $2.4 million in bribes from defense contractors and others in exchange for government business and other favors, signed over the deed to the home on Nov. 7.

Three weeks later, he entered his plea to charges of tax evasion and conspiracy to commit bribery, tax evasion and fraud. The home sale was recorded this week.

Cunningham listed the mansion for sale in August after announcing he would not seek a ninth term in office, but federal prosecutors scared away serious buyers by warning that the house could be forfeited. The sale came together when Cunningham's lawyers and prosecutors agreed to place the proceeds in an escrow account controlled by the government.

Cunningham's wife, Nancy, who jointly owned the property, will seek an agreement with the government to obtain her share of the property from the "untainted proceeds" in the escrow account, said her attorney, Mike Attanasio.

As part of his guilty plea, Cunningham, 64, agreed to forfeit the 7,628-square foot home in Rancho Santa Fe, one of America's wealthiest communities. He bought it for $2.55 million in December 2003 after a defense contractor bought his former home in suburban San Diego at an inflated price.

The buyer of the mansions was Hugh Bancroft III, according to county property records. Bancroft is a member of the family that controls Dow Jones & Co., publisher of The Wall Street Journal. He did not return a phone message seeking comment.

The sale price reflected a gain of 2 percent over two years at a time home price in Rancho Santa Fe were skyrocketing.

Earlier this week, Cunningham also turned over 40 pieces of furniture that he admitted were given to him as bribes. According to Cunningham's plea agreement, a defense contractor had spent more than $90,000 on antique armoires, washstands, silver-plated candelabras and custom oak and leaded glass doors for the former fighter pilot's home.

Cunningham Figure Gave to Gov., Got 2 Board Seats - Los Angeles Times

2005-12-08T14:46:00.000-05:00

By Dan Morain, Times Staff Writer

SACRAMENTO ? A businessman tied to the bribery scandal involving former Rep. Randy "Duke" Cunningham donated more than $70,000 to Gov. Arnold Schwarzenegger's campaign committees and received two gubernatorial appointments.

At Schwarzenegger's behest, Brent Wilkes, founder of the government contractor ADCS Inc., resigned Nov. 29 from the Del Mar Fair Board and from another panel that oversees the leasing of state land for racetracks, said Margita Thompson, the governor's press secretary.

Schwarzenegger appointed Wilkes to the Del Mar board in April 2004 and to the State Race Track Leasing Commission last April. A seat on the Del Mar board is a sought-after post given the panel's association with the Del Mar racetrack, among the most successful tracks in the nation.

Starting with the 2003 recall campaign, Wilkes, his wife and his companies have given $73,000 to Schwarzenegger's campaign committees, according to filings with Secretary of State Bruce McPherson. One of Wilkes' business associates gave $15,000 to the governor's 2003 campaign.

Ned Wigglesworth of the watchdog group TheRestofUs.org called on Schwarzenegger to return the donations.

"In light of Cunningham's plea agreement ? it is certainly incumbent upon the governor to answer whether these appointments were related to the contributions," Wigglesworth said. "At the very least it is the appearance of quid pro quo and at the very least the governor should answer questions."

When asked whether Wilkes' appointments were linked to the donations, Thompson said: "Absolutely not?. There is no connection at all."

Marty Wilson, a Schwarzenegger political aide who oversees the governor's fundraising, said that "at the present time" the money would not be returned.

One day before Wilkes quit the state posts, Cunningham, a Republican from Rancho Santa Fe, pleaded guilty to federal charges that he took $2.4 million in bribes and evaded more than $1 million in taxes. He also resigned from the House of Representatives.

According to Cunningham's plea agreement, Wilkes gave him more than $635,000 in bribes. Wilkes is not named in the Cunningham indictment or in the written plea agreement, but he is referred to as one of four unnamed co-conspirators, one of Wilkes' attorneys has said. That lawyer, Michael Lipman, did not return phone calls Wednesday.

Wilkes' company, ADCS, which is based in Poway, has received millions in federal contracts. According to the plea agreement, Cunningham pressured the Department of Defense to award contracts to ADCS, though it is not clear from the plea bargain that his intervention was pivotal.

Though ADCS appears to focus its efforts on winning federal contracts, the company also has done a small amount of business with the state. In 2001 and 2003, before Schwarzenegger took office, California selected ADCS as one of the vendors that could be hired to transform paper documents into computer images.

House speaker says Cunningham faces 'serious consequences' North County Times - North San Diego and Southwest Riverside County News

2005-12-07T09:41:00.000-05:00

By: MARK WALKER - Staff Writer

The resignation of former North County Congressman Randy "Duke" Cunningham was officially accepted by the U.S. House of Representatives on Tuesday afternoon.

Also on Tuesday, House Speaker Dennis Hastert issued a written statement that praised Cunningham's service during the Vietnam War but attacked his former colleague for his misdeeds.

Hastert called the 63-year-old Cunningham "a war hero" whose Vietnam service earned him deep respect in the halls of Congress.

But Hastert, R-Illinois, said Cunningham violated that trust when he accepted more than $2.4 million in bribes from two defense contractors and two others.

"The public trust he has built through his military and congressional career has been violated," Hastert wrote. "The behavior by U.S. Rep. Cunningham is unacceptable. No one is above the law. He will find that his actions will have serious consequences."

Cunningham faces a possible prison term of 10 years and a fine at $350,000 when he appears before U.S. District Court Judge Larry Alan Burns in San Diego. Last Monday, Cunningham pleaded guilty to one count of bribery and one count of tax evasion in a plea deal worked out with the U.S. attorney's office in San Diego.

A short time later, a subdued and shaken Cunningham, R-Escondido, appeared before reporters and read a statement apologizing for his actions and asking for forgiveness.

He also announced he would resign from Congress. That resignation occurred Thursday, when Cunningham notified Gov. Arnold Schwarzenegger of his decision.

Calls to his former congressional office are now answered with the phrase "50th Congressional District office," rather than "Office of Rep. Randy Cunningham."

Shortly after the House reconvened Tuesday following its Thanksgiving recess, Cunningham's resignation was read into the record and accepted, an action that occurred at 2:02 p.m. Washington time.

Cunningham remains free on his personal recognizance pending sentencing, which is scheduled for Feb. 27 but could be delayed if ongoing investigations into his co-conspirators ---- alleged to be Mitchell Wade of MZM Inc. of Washington, Brent Wilkes of ADCS Inc. in Poway and two other unidentified ---- are complete.

Cunningham and his wife have separated, according to a report in the Los Angeles Times on Monday. The couple are no longer living in the Rancho Santa Fe mansion that became the focal point of a federal investigation into his activities.

A legal defense fund started by Cunningham to pay his attorneys fees will be shut down soon, although the exact timing of that action is not certain.

The Democratic Party is seizing on Cunningham's downfall, issuing news releases in Washington and San Diego highlighting Republican lawmakers in California who have accepted contributions from Cunningham and from ADCS and MZM Inc.

"Even though so many of their Republican colleagues have done the right thing and returned or donated the contributions they received from Cunningham and other individuals involved in this scandal, these California members of Congress continue the culture of corruption by holding fast to the tainted campaign cash," Bill Burton, communications director for the Democratic Congressional Campaign Committee, said in a written statement.� "The California families they represent deserve better than pay-to-play representation for the special interests and against the interests of California families."

Ex-congressman Randy "Duke" Cunningham's bribes put on display

2005-12-07T09:40:00.000-05:00

- By SETH HETTENA, Associated Press Writer
Tuesday, December 6, 2005

Former U.S. Rep. Randy "Duke" Cunningham's bribes took up a small corner of a dimly-lit industrial warehouse.

For Cunningham, who formally resigned in disgrace Tuesday, bribes came as French antique dressers with burled walnut fronts and marble tops. Huge hand-woven Persian carpets covered the concrete floor, including one that stretched more than 30 feet and had a $5,500 price tag still attached. A sleigh-style bed lay in pieces.

Federal agents gave local reporters a peek Tuesday at the 40 or so pieces of furniture that were among $2.4 million in bribes that the ex-Vietnam fighter pilot ace admitted receiving from defense contractors and others in exchange for government business and other favors.

Cunningham agreed to forfeit the furnishings from his San Diego-area mansion, along with the mansion itself and $1.8 million cash when he pleaded guilty Nov. 28 to charges of conspiracy and income tax evasion under a deal with prosecutors that could land him in prison for up to 10 years.

The 63-year-old Republican's letter of resignation was read on the House floor Tuesday. Cunningham said he discredited both his office and his party and apologized to his colleagues for the shame he brought to Congress.

"Not only have I compromised the trust of my constituents, I have misled my family, friends, colleagues, staff and even myself," he wrote.

In a warehouse in the San Diego suburb of Poway, camera shutters clicked as appraiser Dave McPheeters peered into dresser drawers, jotted notes on a yellow legal pad and measured the size of Cunningham's carpets.

"Very nice hand-selected pieces," McPheeters remarked. "The condition is good."

Much of it was bought for Cunningham by defense contractor Mitchell Wade. According to Cunningham's plea agreement, Wade spent more than $90,000 to satisfy the swaggering former "Top Gun" flight instructor's taste in antique armoires, nightstands, washstands, silver-plated candelabras and custom oak and leaded glass doors.

Cunningham also sold his home in the seaside community of Del Mar to Wade in 2003 for a price 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. Copley News Service's disclosure of the home sale triggered the federal investigation that led to Cunningham's downfall.

His furnishings will be sold at an auction and the proceeds will go into the Treasury Asset Forfeiture Fund to support future law enforcement operations, said Tami L. Stine, a spokeswoman for the Internal Revenue Service. Stine said the auction will probably take place in the spring, but a date won't be set until the auction is complete.

Agents from the IRS, FBI and Defense Criminal Investigative Service who investigated the former congressman milled about the warehouse. It was their moment.

"This is a culmination of their hard work," Stine said.

Top Gun's Tailspin - Newsweek National News - MSNBC.com

2005-12-06T00:46:00.000-05:00

Randy Cunningham was a high-flying aviator whose taste for the lavish perks of politics brought him low.

By Evan Thomas and Jamie Reno
Newsweek

Dec. 12, 2005 issue - Randall (Duke) Cunningham has never been shy about his exploits. When he first ran for Congress in 1990, the former naval aviator wore his leather bomber jacket to campaign rallies and referred to his opponent as a "MiG." Cunningham told audiences that the "Maverick" character played by Tom Cruise in "Top Gun" was based on him, claiming credit for the "hit the brakes and he'll fly by" maneuver depicted in the movie and the scene in which Cruise flies upside down over a Soviet fighter. His campaign brochures showed Cruise posing with him on the set, until Cruise's agent objected.

When Cunningham arrived in Congress on the eve of the first gulf war, he found that other politicians basked in his glow. Staffers called him "Ace" and "the Dukester," and his colleagues would ask questions like "Duke, why is it so hard to knock out a concrete bunker?" He was booked on the "Today" show and profiled in the Los Angeles Times (which wrote, in 1991, "the 49-year-old Cunningham has approached his new job with an affable style that blends 'Mr. Smith Goes to Washington' with the kind of cockiness that comes from surviving 300 combat missions in Vietnam"). Former congressman Guy Vander Jagt, who was at the time the head of the National Republican Congressional Committee, recalls: "He came across as this really gruff but authentic kind of guy who just gave it to you straight. He was a valuable commodity to us."

Congressmen who had once praised Cunningham for his "integrity" weren't returning reporters' phone calls last week. Cunningham had tearfully pleaded guilty to taking more than $2 million in bribes and tax evasion. He was convicted of accepting lavish gifts, including oriental rugs, a yacht, a Rolls-Royce and, for some reason, a 19th-century Louis Philippe commode, or chamber pot. His corruption seemed to be baroque, over the top, out of keeping with most modern influence peddling, which has either been made legal or rendered arcane by clever lawyers. His lawyer, Mark Holscher, was quoted as saying that he had recommended that his client plead guilty because he had "no defense."

In the buttoned-up, fundamentally cautious capital, Cunningham stood out as a gossip columnist's dream. Two women quoted by the Copley News Service depicted Cunningham, a self-described family man, as offering them champagne after changing into pajama bottoms and a turtleneck sweater "to entertain them by the light of his favorite lava lamp." His plea agreement could spell trouble for more discreet lawbreakers. In return for a lighter sentence (perhaps 10 years in prison), Cunningham is cooperating with the Feds. Although his crimes do not appear to be connected to several other corruption scandals bubbling up on Capitol Hill, Cunningham may be in a position to point prosecutors toward hidden pockets of graft, particularly in the realm of peddling federal defense and intelligence contracts.

Cunningham's motives were a source of puzzlement. He was a patriot and deeply proud of the uniform, though he long flirted with disgracing it. He had never appeared particularly interested in money. And if he wanted to get rich, as at least one Hill observer pointed out, all he had to do was retire and become a lobbyist.

Possibly, he succumbed to a sense of entitlement. John Cheshire, a fellow top-gun pilot and Vietnam vet who served with Cunningham, noted that arrogance was a common trait among elite aviators and that Cunningham was more arrogant than most. "We didn't play by the rules; we had our own rules. We got away with everything," Cheshire told NEWSWEEK. "But when you get out, you move on, you grow up. Duke never did. He's still pompous, still childlike, still so full of himself."

He had superb gifts as a combat pilot, shooting down five North Vietnamese MiGs to qualify as an ace. But out of the cockpit, he was not the sort of naval officer destined to make admiral. Known as a rowdy skirt chaser (hardly exceptional in the pre-Tailhook-scandal days of the Navy), he routinely alienated senior officers with his unruly behavior and bluster. He was caught breaking into his commander's office at top-gun school (reportedly to find out why he was low-rated). The Navy couldn't kick out a Vietnam ace without creating a PR embarrassment. Indeed, the Navy used Cunningham as a poster boy, trotting him out to tell aviators-in-training his war stories of derring-do.

Retiring in 1986, Cunningham taught high-school swimming and tried his hand as a small businessman before running for Congress. When the incumbent got caught up in a sexual-harassment scandal, Cunningham won and was immediately tagged as a rising star, sent around the country to raise money for other Republican candidates.

But his loud mouth and macho antics soon put off his colleagues. In 1992 he declared that the Democratic leadership "ought to be lined up and shot. I would have no hesitation about lining them up and shooting them." In 1995, Capitol police had to break up a scuffle with Democratic Congressman James Moran, and Cunningham once challenged another Democrat, David Obey, to a fistfight on the House floor.

His erratic behavior may have roots at home. A fervent supporter of mandatory-minimum jail sentences for drug offenders, he begged for leniency with a federal judge when his adopted son, Todd, was arrested in 1997 for flying 400 pounds of pot across the country (he was sentenced to two and a half years). Cunningham confessed that he had spent little time with him when the boy was growing up and wondered aloud if he were responsible for his troubles.

A year later, Cunningham was diagnosed with prostate cancer and went on a strange jag while addressing some elderly cancer patients at Alvarado Hospital near San Diego. He made an obscene gesture and said "f--- you" to a World War II vet who suggested that defense budgets be lowered. He said that no man would enjoy prostate-cancer treatments, "unless maybe you're Barney Frank." (Congressman Frank said that Cunningham "does not have a high reputation for the thoughtful, analytical content of his remarks. He seems to be more interested in discussing homosexuality than most homosexuals.")

Some of Cunningham's friends wonder if he wasn't trying to work off some guilt about his second wife, Nancy, by showering her with ill-gotten gifts. Beginning in 2001, according to Cunningham's guilty plea, he began using his seat on the House intelligence committee as flypaper for attracting bribes. Before long, he was receiving gifts from high-tech companies with an interest in federal contracts. One of them bought Cunningham's house at an inflated price and provided him with a rent-free yacht to live on in Washington.

Cunningham's greed seems to have coincided with a midlife crisis. "Duke was a changed man after his prostate cancer. He mellowed," said someone who has known Cunningham for two decades but requested anonymity because he did not want to alienate a friend. "I suspect that was at least in part his way of paying back Nancy for all the bad stuff he's ever done in his life. The $1,500 gift certificate for the set of earrings, the leather sofa, the Persian rugs, the French commode, the silver candelabra, the antiques, it all sounds much more like Nancy than Duke." Nancy Cunningham, who did not attend her husband's guilty plea, is not charged with any wrongdoing and has gone to court to keep her interest in a house bought with alleged bribe money. (Neither Cunningham responded to NEWSWEEK's interview requests.)

In the tight fraternity of naval aviators, Cunningham's extreme case of delayed adolescence was always covered up. But his fellow flyboys were not fooled. Last week at the office of the chief of Naval Air Forces in San Diego, a gathering of the Navy's top aviation admirals watched as he confessed at a teary press conference. According to an officer who was there, the admirals were delighted to see Cunningham finally get shot down.

With Holly Bailey in Washington

� 2005 Newsweek, Inc.

www.GovExec.com - Contracting probe could extend to CIA (12/4/05)

2005-12-05T15:39:00.000-05:00

By Jason Vest
jvest@govexec.com

Federal investigators in San Diego have made it clear that while just-resigned Rep. Randy "Duke" Cunningham pled guilty last week to taking bribes from defense contractors, their public corruption probe will not stop at Cunningham. Numerous current and retired CIA officials say they will not be surprised if the investigation touches the CIA in general, and it's third-ranking official in particular.
"Though everyone has been talking about what Cunningham did for contractors from his position on [the House] Defense Appropriations [subcommittee], you also have to remember that he had a seat on [the Permanent Select Committee on] Intelligence too, which is also a good position to help contractors from, particularly if they want to do business with the CIA," says a veteran CIA officer. "But the real question I think is, if those contractors were doing business with the CIA, did they need Cunningham? And even if they didn't, the question is, even if he didn't do anything, did one the highest-ranking agency officials have any idea what his friends were up to?"

According to past and present CIA officials interviewed over the past month, CIA executive director Kyle "Dusty" Foggo--whose career duties have encompassed letting CIA contracts--has had a long, close personal relationship with two contractors identified (though not explicitly named) in court papers as bribing Cunningham: Brent Wilkes of the Wilkes Corp., whose subsidiaries include defense contractor ADCS; and former ADCS consultant Mitchell Wade, until recently president of defense contractor MZM, Inc. It is a relationship, the CIA officials say (with some putting a particular emphasis on Wilkes), that has increasingly been of concern.

One current and two retired senior CIA officials told Government Executive that (as noted last week by reporter Laura Rozen in The American Prospect's TAPPED blog) the relationship of Wilkes and Foggo--who the CIA's Web site declares is "under cover and cannot be named at this time," even though he is pictured and identified on a federal charity web page--has been a subject of increasing concern by some at Langley.

Another recently-retired senior agency official, while not naming Wilkes or Wade by name, also noted concerns borne out of both personal experience with and reports from colleagues about Foggo. "If you were a case officer and worked with him, you'd be saying to yourself, 'I've got to watch this guy,'" says the former official. "There is one contractor with whom he enjoys a very, very, very close relationship."

According to several of the officers interviewed for this article, Foggo and Wilkes have been friends since at least their college years at San Diego State University in the 1970s, where they were roommates. According to several regulars at Washington's Capital Grille, the two jointly lease one of the restaurant's private wine lockers.

After a brief stint in law enforcement, Foggo entered the CIA through the Presidential Management Intern program, and began work in what was then known as the Directorate of Administration (DA), the CIA organization that, among other things, handled a significant portion of the agency's contracting.

Foggo belonged to the DA's Management General Services unit, whose personnel, while not case officers who directly recruit and oversee spies, nonetheless received the same training as covert-action oriented Directorate of Operations officers.

MGS officers ran operational support programs in the field, a critical job directly below the agency's station chiefs. MGS officers had unique powers, including sole access to and oversight of a station's funds, as well as handling a station's accounting and contracting.

"The MG guy is the station's contracting authority, and is responsible for acquiring whatever a station needs to function, and to keep it running---the glue the holds it all together and gets anyone anything they need," says a veteran logistics officer.

While most federal government contracts are openly solicited, competitively bid and have their details publicly available, by virtue of its mission the CIA is not subject to the same rules. MG officers in particular have historically had great leeway.

"While the process is the same as anywhere else--in theory, you go to the place you can get the best deal--you're not going to find our stuff on the federal schedule, and the payment will come either through a company we set up or some other governmental cover," says a recently-retired MGS veteran. "Historically MG officers have been able to sole-source, and for smaller contracts, in some cases up to the half-million range, have not needed Langley's approval. A lot of smaller sole-source contracts can add up for a contractor."

Prior to becoming executive director, Foggo's postings included stations in Latin American and Europe. One of his first assignments was Honduras in the early 1980s, where one now-retired CIA officer recalls seeing him at least once with a visiting Brent Wilkes, who was there with "some kind of congressional delegation" in a "kind of vague" capacity.

Directly before coming executive director, Foggo was chief of the CIA's support base in Germany, which provides its Middle East stations, including Baghdad, with logistical support. While there, according to a recently retired CIA official, he let at least one contract to Wilkes. A veteran CIA administrative officer also noted that while Foggo has spent most of his career as an MGS officer, he also did a stint in the agency's Directorate of Science and Technology, "where a lot of really big contracts are handled."

Cunningham's Fall From Grace, Power - Los Angeles Times

2005-12-05T09:49:00.000-05:00

Running for Congress as someone 'we can be proud of,' he was greeted as a hero and celebrity. Then came the tirades and the corruption.
By Peter Pae, Tony Perry and Richard Simon
Times Staff Writers

December 5, 2005

WASHINGTON ? Bombastic and prone to speak first and think about it later, Randy "Duke" Cunningham was never known for understatement or the subtle approach in Congress. But the rampage he went on in the spring of 2000 was something else, even by his standards.

Three years earlier, using his position on a House defense subcommittee, he had bulldozed the Pentagon into buying a $20-million system it didn't want for digitizing paper documents. Predictably, the military dragged its feet on implementing the system, and Cunningham exploded.

During a subcommittee hearing, the California Republican demanded that the Pentagon official he blamed for the delays be fired.

"I want Lou Kratz removed from office," Cunningham thundered. "I think he's incompetent. And I'm calling for his removal. I've had it."

At the time, Cunningham's harsh rhetoric and extreme advocacy for a relatively minor program attracted virtually no attention.

More than five years would pass before it became clear exactly why Cunningham had gone to such extremes: The small information technology company involved with the digitization project was allegedly one of two obscure defense contractors that secretly showered Cunningham with an estimated $2.4 million in cash and expensive gifts ? including a Rolls-Royce, money to buy a posh 8,000-square-foot house, and a cornucopia of antique furniture, Oriental rugs and jewelry.

Last Monday, in a move that left many of his friends and colleagues professing shock and bewilderment, Cunningham, 63, pleaded guilty to federal corruption charges and announced he was resigning from Congress.

Washington is no stranger to congressional scandals; even now, several others are swirling around the Capitol. But the Cunningham case stands apart, both for the brashness of his actions and for the dizzying nature of his fall.

When it comes to using power in Congress and dealing with private companies and individuals, members of the House and the Senate have ways of achieving their ends while staying safely inside none-too-confining laws and ethics rules. But Cunningham seems to have been ignorant or disdainful of such niceties. As set out in the indictment and plea agreement, he operated like an old-fashioned ward boss with his hand out.

"The conduct is certainly brazen," said Kenneth Gross, a Washington lawyer and former chief of enforcement at the Federal Election Commission. "It is hard to understand what was going on in his mind."

For example, on two occasions, Cunningham took personal checks for $70,000 and $30,000 and, disdaining subterfuge, put both in his personal bank accounts, including one at the Congressional Federal Credit Union in the Rayburn House Office Building.

The collection of antique furniture that a contractor bought for Cunningham's house in Rancho Santa Fe in San Diego County using a company credit card is so precisely cataloged that it suggests the congressman had provided a shopping list.

Then there are the ironies of Cunningham's rise and fall.

Cunningham came to Washington from the San Diego area 15 years ago with the campaign slogan "A Congressman We Can Be Proud Of." He was replacing a Democrat who had been driven from office by charges of sexual harassment. Two years later, in 1992, when Cunningham was redistricted out of his first seat, he took over a seat from a Republican incumbent who had been tainted by the House banking scandal.

A Vietnam War hero who shot down five enemy planes and received the Navy Cross, two Silver Stars, 15 Air Medals and a Purple Heart as a Navy fighter pilot, Cunningham was one of the most decorated fliers from that war. In Washington, he was an instant celebrity, sought out by the news media and admired by colleagues for his heroism and his special knowledge of the armed forces.

Nor was the political market value of a good-looking, outspokenly patriotic military hero lost on Republican leaders at the time.

"I already consider him a treasure who I could send out anywhere in the country and be confident of his drawing power," former Rep. Guy Vander Jagt (R-Mich.) told The Times in 1991 when he was chairman of the National Republican Congressional Committee.

"The older members treat him more like a celebrity than a freshman," Vander Jagt said. "In the short time he's been here, Duke's captured more attention than any other freshman I've ever seen."

It was a brilliant beginning to a career that would run for 15 years. Then, seemingly in the blink of an eye, Cunningham was an admitted felon, "in the twilight of his life," as he put it, facing up to 10 years in prison. He will appear before a federal judge in February for sentencing.

A 'Top Gun' in Congress

In his glory days, Cunningham walked the halls of Congress with a bear-like swagger that reminded people of John Wayne.

Although he was not the model for Tom Cruise's character in the blockbuster movie "Top Gun," he had been the real thing in the Navy, and he liked to tell people that some of his exploits were reflected in the film, like buzzing the tower at Miramar Naval Air Station. His offices were replete with military knick-knacks, and his press secretary used to send out news releases on the anniversary of his Vietnam shoot-downs.

At the Pentagon, he was known as a congressman who was always eager to fly in the latest jets.

No one, including his staff, considered Cunningham a deep thinker. He depended on others to handle the details. But he was one of the party faithful, counted on to speak up in party meetings and rally the troops for the cause of the day.

Personally, his taste ran to country music and cowboy novels ? which made the French antiques and Oriental rugs he took from contractors seem anomalous.

In the House, he was seen as an amiable colleague, the kind of man who listened appreciatively when someone had a joke and was more comfortable working a room than discussing the fine points of policy.

"I never heard anybody say a bad word about Duke. I think he was an easy guy to like," said Patrick J. Toomey, a former GOP congressman from Pennsylvania. "He always did have a special status ? as a war hero."

Cunningham had an emotional streak too, especially if the subject was Americans in uniform. During a 1995 debate, he choked back tears recounting the experience of an American POW in Vietnam who, Cunningham said, had painstakingly sewn a flag onto the inside of his shirt.

In recent years, Cunningham was best known for advocating a constitutional amendment to protect the American flag from "physical desecration."

Sometimes he got into trouble for his blunt remarks. In 1995, criticizing Democrats for supporting defense budget cuts, he called them "the same ones who would put homos in the military." (Later, when a gay rights group held a news conference to condemn him, Cunningham showed up and declared, "If the term 'homos in the military' is offensive, then I apologize and I will not use it again.")

He Lands Key Seats

Although born in Los Angeles, Cunningham grew up in the rural community of Shelbina, Mo., where his father ran a dime store, and where father and son loved to hunt pheasant and deer. He graduated from the University of Missouri and was a swimming coach in Hinsdale, Ill., before enlisting in the Navy.

Fit and with great reflexes, he became an F-4 Phantom pilot in Vietnam before becoming an instructor at the Top Gun school in San Diego. He loved the camaraderie of Navy pilots. He left the Navy in 1987.

Local GOP leaders recognized his potential political appeal and ran him for Congress in 1990 against Democratic Rep. Jim Bates, the incumbent who had been rebuked the year before by the House Ethics Committee over sexual harassment complaints. Until then, Cunningham was so apolitical that he had never voted.

Cunningham won that first seat in a close race, the only one of his career ? in part because redistricting moved him into progressively more Republican, as well as more affluent, areas.

In Washington, his war record got him a spot on the Appropriations Committee in 1997, where he was a natural for the defense subcommittee. He was put on the Permanent Select Committee on Intelligence in 2001 and this year was named chairman of its Terrorism, Human Intelligence, Analysis and Counterintelligence Subcommittee.

Cunningham's committee assignments, as well as his increasing seniority, gave him a unique opportunity, government procurement experts say. As a member of the Intelligence Committee, he was in a position to promote particular programs, and much of the committee's work is classified and thus shielded from normal oversight.

As a member of the Appropriations subcommittee on defense, Cunningham could push for funding approval for programs such as the digitizing system that prompted him to threaten the defense official's job in 2000. That program used services provided by ADCS Inc., located in Poway, Calif., and founded by Brent Wilkes, a supporter of Cunningham and other Republicans.

In the end, the Pentagon prevailed in that battle and the official, Kratz, kept his post. The Defense Department began scaling back the program in 2001, partly by winning support from the Bush White House, which Cunningham declined to fight.

But by then, a new chapter was opening: An even more obscure company, based in Washington, had entered the picture.

The plea agreement that Cunningham signed referred to the contractors who paid him off as "co-conspirator No. 1" and "co-conspirator No. 2." A lawyer for Wilkes of ADCS confirmed Friday that his client was the first co-conspirator. The lawyer, Michael Lipman, declined to elaborate.

Real estate records and a San Diego Union-Tribune report published in June indicated that the second co-conspirator was Mitchell J. Wade, who owned MZM Inc., the Washington firm. Wade had worked for Wilkes as a consultant, Lipman said.

Neither Wilkes nor Wade could be reached for comment. In Washington and in San Diego, federal grand juries are continuing to investigate the case. Cunningham also could not be reached for comment.

Fledgling Firm Takes Off

MZM Inc. was incorporated in 1993 but had not posted any revenue as late as 2001. Still, the company began paying for Cunningham's expenses, according to court documents. In November 2001, a company check for $12,000 paid for three nightstands, a leaded-glass cabinet, an antique washstand and four armoires.

In December 2001, a $50,000 company check was sent to a mortgage banker, who in turn made out a check to Cunningham for the same amount. In January 2002, the company's American Express card was used to purchase a leather sofa and a sleigh bed for Cunningham.

In all, more than $100,000 in cash and furnishings were given to Cunningham even before MZM had posted its first revenue.

Although MZM had no experience with government contracts, the General Services Administration in May 2002 placed the company on a list of approved information technology service providers, a key step for the company to get business from federal agencies.

The first contract, worth $140,000, came from the White House ? to provide office furniture and computers for Vice President Dick Cheney.

Two weeks later, on Aug. 30, 2002, Wade purchased a yacht, later christened "Duke-Stir," for $140,000, according to court documents. Cunningham used the yacht, docked at the Capital Yacht Club, as his home in Washington ? and the scene of parties for lobbyists and others.

The money and gifts MZM gave Cunningham were a small price to pay for the ultimate prize. In September 2002, the General Services Administration signed a so-called blanket purchase agreement with MZM totaling $250 million over five years.

Under the agreement, specific computer services for the Pentagon would be contracted to MZM without competition.

Such contracts are typically used to expedite routine ordering of such things as office supplies, but in recent years they also have been used to buy sophisticated equipment and services from specialized technology companies.

"It just makes no sense," said Keith Ashdown, vice president for policy at the government watchdog group Taxpayers for Common Sense. "How does someone with little experience get a blanket contract?"

Though court documents offered few specifics, Cunningham essentially admitted that he was the answer. As his influence grew on the Appropriations Committee, he apparently bullied Pentagon officials on the MZM contract much the way he had on money for ADCS, watchdog groups said.

"Cunningham was an 800-pound gorilla who could get his way in a room with a mid-level contracting officer," Ashdown said.

As federal dollars poured in to MZM, Wade began to reward the lawmaker more lavishly, culminating with his purchase of Cunningham's home in the San Diego neighborhood of Del Mar Heights for $1.675 million ? about $700,000 more than he was able to sell it for nine months later.

The windfall enabled Cunningham to move to the home in Rancho Santa Fe, a more exclusive and prestigious area.

Reports of the house deal began to unravel Cunningham's game.

In addition to facing possible time in prison, he must disgorge most of his ill-gotten gains and could be fined as much as $350,000. He also faces potentially huge legal fees.

On that score, at least, he may find some relief in the form of his war chest of campaign contributions. According to Kenneth Batson, treasurer of the former congressman's campaign committee, donors have given their permission to shift about $500,000 of their contributions to a defense fund.

Veering Off Course

In the end, what puzzles most of those who knew Cunningham is how a man who had so much going for him could have gotten into such a mess.

Some think it began in 1998, when he underwent surgery for prostate cancer. Friends say the experience left him physically weakened and emotionally shaken. Convinced that he would not enjoy a long life, this theory goes, Cunningham decided to maximize the pleasure of whatever time he had left.

About the same time, he lost some of his veteran staffers, and their younger replacements may have been less able to protect Cunningham from himself.

Others believe that the years Cunningham spent in Washington while his wife, Nancy, worked as a school district administrator in Encinitas, north of San Diego ? as well as rumors that swirled around the boisterous parties on the Duke-Stir ? strained his marriage, and that the lavishly furnished mansion represented an effort to make things up to his wife. (The couple are now estranged.)

It was also in the late 1990s that Cunningham met Wade, who had worked in the Pentagon and was in the Navy Reserve. The two became close. Wade, Cunningham told friends, "is the younger brother I never had."

The operative theory among some of Cunningham's supporters is that the contractors played on Cunningham's years of public service, suggesting he had earned the kind of luxuries he could not afford on his own.

Rep. Jack Kingston of Georgia, vice chairman of the House Republican Conference, who served on the House defense appropriations subcommittee with Cunningham, said, "I think what happened in this situation is that you develop friendships, and those friends see you after hours, on the weekends, and they have nice play toys ? boats, access to golfing, country clubs, credit cards ? and you're becoming friends with the guy and you don't think that much of it, and before you know it you get caught up in it."

Whatever the reason, the magnitude of Cunningham's fall was suggested by an incident Kingston related. The Georgia Republican's sister, who had served in the Navy, was more impressed that her brother knew Cunningham than any other House member, including Newt Gingrich.

"The guy is truly a genuine war hero," Kingston said. "He's probably just twisting on that legacy being tarnished now."

Pae reported from Los Angeles, Perry from San Diego and Simon from Washington. Times staff writers Richard A. Serrano and Richard T. Cooper in Washington contributed to this report.

Cunningham Friends Baffled By His Blunder Into Bribery

2005-12-04T00:49:00.000-05:00

Navy Ace-Turned-Congressman Didn't Act Like Big Spender

By Lois Romano
Washington Post Staff Writer
Sunday, December 4, 2005; A06

For those who have observed Duke Cunningham's behavior in Washington for 15 years, especially those who have felt his scorn, his remorseful exit from the House last week carried no surprises. Since his early days in Congress, Cunningham's behavior has been predictable: ad hominem attacks followed by tearful apologies.

In one now-famous incident, Cunningham and Rep. James P. Moran Jr. (D-Va.) got in a shoving match over sending troops to Bosnia. Moran confronted Cunningham, triggering a partisan melee among other members -- and Cunningham fled.

Moran found him crying in the cloakroom.

"I thought he had been bullying too many people for too long, and I told him so," Moran recalled. "He said he didn't mean to be so accusatory. . . . After that, he would bring me candy from California."

Randy "Duke" Cunningham, a California Republican, can no longer smooth over his bluster and lapses in judgment with a See's Candies party assortment. The eight-term congressman and decorated Navy pilot resigned his seat Monday after tearfully confessing to accepting at least $2.4 million in bribes from defense contractors that included $100,000 in cash, a Rolls-Royce and a 42-foot yacht. He pleaded guilty in federal court and awaits sentencing Feb. 27.

The news -- the sheer magnitude of the graft -- was met with incredulity throughout Washington. How could Cunningham, a member of the Appropriations Defense subcommittee, have been so stupid, so craven, so greedy? Even President Bush weighed in, calling the crimes "outrageous."

Cunningham, who turns 64 next week, and his wife, Nancy, a school administrator, are back in California and have no plans to return to Washington, a source close to them said. He no longer has a home, having agreed to forfeit his personal property related to the bribery. He is staying with family until he knows what the future brings. He has apologized to his staff.

No one could say for sure why this Vietnam War hero went astray, when he stopped living on his $158,000 salary, how he thought he could get away with driving a Rolls-Royce and moving into a $2.5 million house in Rancho Santa Fe with the financial help of a defense contractor. The allegations make no mention of debts or financial troubles -- just high living: a contractor's credit card for a leather sofa and a sleigh bed; a $1,500 gift card for a pair of earrings; a new boat, "Duke-Stir," docked at a slip in Washington; and a graduation party for one of his two daughters. (He has a son from his first marriage.)

Those who worked for Cunningham and who have associated with him on the Hill said they saw none of the trappings of extravagance. His biggest joy, they said, was skeet shooting, for which he won an award from the Congressional Sportsmen's Caucus. The joke at his office used to be, one former aide said, that he shopped at Costco and bought three of everything to save money. A defense lobbyist who knows Cunningham well and golfed with him said that the congressman never had his hand out with him. "I'm just stunned," the lobbyist said. "He was a 'dems' and 'dose' kind of guy, a little rough around the edges -- a regular guy."

A source close to Cunningham's office pointed out that the Rolls-Royce was not in great shape, and that because Cunningham had previously lived on a boat, the new one did not draw any attention. "It's not like he was sitting around in a silk smoking jacket," the source said.

If someone suspected what was happening, few are talking. Unlike the allies of I. Lewis "Scooter" Libby who jumped to his defense last month after the former White House aide was indicted for perjury, Cunningham's friends seem to be distancing themselves. Republican Hill chums -- such as California Reps. Duncan Hunter and Jerry Lewis -- did not respond to requests for interviews. Former representative Ron Packard (R-Calif.) said he felt betrayed, having believed Cunningham's denials for months and publicly defending him. Packard said he found the charges "beyond comprehension."

Cunningham's career in politics began like those of other high-profile war heroes -- catapulted into the profession by name recognition and his district's appreciation for his patriotism. He had enlisted at age 25, after a stint as a high school swim coach, and became the Navy's first ace pilot of the Vietnam War and a legend after shooting down five enemy planes. He was shot down once, and avoided capture with great daring. He earned medals for valor, including the prestigious Navy Cross, before retiring from the military in 1987.

But according to "Fall From Glory," a book about the naval Tailhook Association's bacchanalias, Cunningham's superiors questioned his leadership abilities and resisted giving him a permanent commission. (He eventually got one.) The book, by Gregory L. Vistica, reports that Cunningham once broke into a superior's office to read his own fitness report but was spared discipline because the Navy did not want to generate bad publicity.

After briefly working in business after the military, Cunningham was courted in 1990 by the GOP to run in an affluent Republican district. His high name recognition and gung-ho conservative credentials carried him to a narrow victory over the Democratic incumbent. He has been reelected handily ever since.

From his arrival in Congress in 1991, Cunningham was branded as volatile and a flamethrower who challenged members to fistfights -- and not someone slated for leadership.

Packard, who sat with Cunningham on the Appropriations Committee, said he had a short fuse. Early on, Packard recalled, Cunningham became angry and emotional at a California delegation meeting when it became clear he did not have the support for a committee assignment he sought. "He was extremely upset and threatened to quit Congress. That was the first indication that he didn't have control of his emotions," Packard said.

Then there were the biting attacks on colleagues -- mainly partisan -- for which he usually apologized.

In 1992, Cunningham suggested that the Democratic House leadership should be "lined up and shot." A few years later, a House debate over water pollution turned ugly when Cunningham said lawmakers backing a particular amendment were the same people who support "homos in the military."

During remarks in his district in 1998 to a gathering of prostate cancer patients, Cunningham commiserated by describing a rectal procedure he had undergone as "just not natural, unless maybe you're Barney Frank."

"He was a blustery fool," said Rep. Barney Frank (D-Mass.), who is openly gay. He said Cunningham apologized to him for the remark and noted that he thought Cunningham had "calmed down" in recent years.

On his first trip back to Vietnam, Cunningham sat down with Vietnamese officials for a formal dinner, and his first words of the evening were: "You gooks shot me down."

"It's not exactly the way to start a diplomatic dinner," said Moran, who was on the trip with Cunningham. "I told him quietly that he had bombed them, too."

Those close to Cunningham say the gaffes coupled with the charges create a caricature, and not the man they know -- the kind individual who sent an aide home the minute her grandfather died and a softie who fretted over his dog's health when the animal was injured. One Navy friend, George Nesby, said that as an African American, he will forever be loyal to Cunningham for giving him support and promotions as a young pilot.

Cunningham's legal troubles were triggered when the San Diego Union-Tribune reported in June on his 2003 lucrative house deal. He sold his Del Mar, Calif., house for the inflated price of $1.675 million to "Conspirator No. 2," -- identified through other sources as defense contractor Mitchell Wade of MZM Inc. -- who then sold it at a $700,000 loss nine months later. Cunningham was charged with using his influence to award federal contracts to MZM in return for payoffs.

The housing transactions did not go unnoticed by neighbors. "We all knew it was a shady deal as soon as we saw it," next-door neighbor Kent Greene said. "The market stated very clearly it [$1.675 million] was not an appropriate price." Victoria Konopacke, who bought a house across the street three months before the Cunningham sale, said, "We bought ours for $915,000, and I hate to say it, but ours is a lot nicer than theirs."

Congressional ethics laws prohibit members from accepting any largess over $100 per year from any one source, and only $50 at one time. While the rules are sometime subtly skirted, rarely so in such a blatant fashion.

"I think the only defense he could possibly have is stupidity," said Samuel L. Popkin, a professor of political science at University of California at San Diego, who has followed Cunningham's career. "But he's smart enough to know the rules -- which he thinks don't apply to him."

A friend had another explanation: "I know what happened, and I know how it happened," Nesby said. "It's really very simple. In the political arena, what at first seems abnormal becomes normal. . . . It's very easy in this environment for one to lose their moral compass."

� 2005 The Washington Post Company

?Duke? keeps his pension

2005-12-02T10:39:00.000-05:00

By Jackie Kucinich

Rep. Randy ?Duke? Cunningham (R-Calif.) will soon relinquish many of his properties and his freedom after pleading guilty to charges of fraud and conspiracy, but he will keep his government pension and could retain the privileges enjoyed by other former members of Congress.

Cunningham has served in the House 17 years, and his right to his federal pension will not be affected by his crimes, according to a senior House aide familiar with the rules. He will also receive benefits accrued during his service in the U.S. Navy, in which he served from 1966 to 1987.

Ordinarily, upon leaving Congress, former House members, like former senators, get lifetime floor privileges, access to the gym and a parking space.

?The Speaker?s office has yet to receive his letter of resignation,? said Ron Bonjean, a spokesman for Speaker Dennis Hastert (R-Ill.), but he added that the office expects the letter soon. ?We are looking at this matter very seriously,? he said.

Cunningham?s access to the usual privileges has not been discussed, Bonjean said.

The Federal Elections Commission allowed Cunningham to use campaign funds to pay legal fees, according to a source close to the congressman. It was not clear how much was in Cunningham?s war chest before the investigation. Cunningham had $627,388 on hand as of Sept. 30, according to PoliticalMoneyLine.

Cunningham?s congressional office will continue to function under the supervision of the clerk of the House until a new member has been elected for California?s 50th District, according to Harmony Allen, Cunningham?s chief of staff, who released a statement yesterday expressing the staff members? sorrow for their former boss and his family.

?The office will not comment any further on [Monday?s] proceedings other than to say that we are praying for Duke in these exceedingly difficult times,? Allen said. ?The office is working closely with the clerk of the House to ensure that the needs of the constituents of the 50th District of California are met throughout this transition.?

A source familiar with the situation in Cunningham?s office, which will become the office of the 50th District of California once the formal resignation process has concluded, said that while most staff members are not ?rushing out the door,? they are looking for positions elsewhere in preparation for the changeover to a new member.

Gov. Arnold Schwarzenegger (R) has 14 days from Cunningham?s official resignation to set the date for the special election.

Cunningham, a member of the House Appropriations Committee?s Defense and Intelligence subcommittees, announced Monday that he will resign from Congress after he pleaded guilty in a California district court to charges of tax evasion and conspiracy. He will be sentenced Feb. 27 and could receive up to five years in prison on each of the two counts. In entering a guilty plea, he admitted taking $2.4 million in bribes.

?Some time ago, I asked my lawyers to inform the U.S. Attorney Carol Lam that I would like to plead guilty and begin serving a prison term,? Cunningham said during his emotional statement Monday. ?Today is the culmination of that process. ? I will continue to cooperate with the government?s ongoing investigation to the best of my ability.?

In 2002, former Ohio Rep. James Traficant (D) was convicted on 10 counts of racketeering, fraud and bribery. He is serving an eight-year sentence in Summit County Jail in Akron, Ohio.

In 2003, after Traficant was expelled from Congress, a handful of House Republicans introduced a bill that would prevent any lawmaker from receiving a congressional pension after being expelled. Currently, only members convicted of ?high crimes? such as treason can lose their pensions.

Republican Reps. Jeff Miller (Fla.) Ginny Brown-Waite (Fla.), Howard Coble (N.C.), Joe Pitts (Pa.) and Lee Terry (Neb.) sponsored the legislation. It stalled after being sent to the House Administration and Government Reform committees for action.

Bidding Goodbye to Tainted Money - New York Times

2005-12-01T23:58:00.000-05:00

By THE ASSOCIATED PRESS
Published: December 2, 2005
WASHINGTON, Dec. 1 (AP) - Seeking to distance themselves from former Representative Randy Cunningham, some Congressional Republicans are donating to charity political money that he gave them over the years.

Mr. Cunningham, who pleaded guilty Monday to taking $2.4 million in bribes in exchange for steering government work to military contractors, had given colleagues money from his campaign account and a political action committee he created.

Since his plea, more than a dozen Republican lawmakers and candidates have donated the money to charity or disclosed plans to do so.

Among them are Representatives Charlie Dent of Pennsylvania, Jim Nussle of Iowa, Richard W. Pombo of California and Heather A. Wilson of New Mexico and Senator John Thune of South Dakota.

Committee to Probe Cunningham's Panel Work - Yahoo! News

2005-12-01T01:27:00.000-05:00

By ERICA WERNER, Associated Press Writer

The chairman of the House Intelligence Committee has asked committee attorneys to review former Rep. Randy "Duke" Cunningham's work on the panel to ensure he didn't improperly influence committee actions or decisions.

Rep. Pete Hoekstra, R-Mich., ordered the review after learning of Cunningham's guilty plea Monday to charges of corruption and tax evasion for taking $2.4 million in bribes, mostly from two defense contractors, in exchange for steering government business their way, said committee spokesman Jamal Ware.

Hoekstra also ordered Cunningham's access to classified information terminated immediately, Ware said Wednesday.

"He believes these concerns are incredibly serious, and that there has to be certainty that everything was done aboveboard on the Intelligence Committee," Ware said. He said, however, that Hoekstra did not believe Cunningham had improperly influenced committee business.

Cunningham, R-Calif., resigned from Congress after reaching the guilty plea. He was in his eighth term and had served since 2001 on the Intelligence Committee, and since this year as chairman of the panel's subcommittee on terrorism and human intelligence.

Committee lawyers will review committee bills and programs over which the panel has oversight authority for signs of improper involvement by Cunningham, Ware said.

Also, Hoekstra is requesting a meeting with Justice Department officials to discuss their investigation of Cunningham's ties with the defense contractors, Mitchell Wade of MZM Inc. and Brent Wilkes of ADCS Inc.

The news of Hoekstra's probe came as House Minority Leader Nancy Pelosi, D-Calif., released a letter to House Speaker Dennis Hastert requesting creation of a bipartisan committee to investigate Cunningham's handling of classified information.

Lee Blalack, Cunningham's attorney, said his client would cooperate with any congressional inquiry, but only if federal prosecutors allow him.

Cunningham is free as he awaits sentencing Feb. 27. He faces up to 10 years in prison. In his guilty plea he admitted accepting cash, antiques, a Rolls Royce, mortgage payments on a mansion and boat, and other favors in return for helping the contractors gain valuable defense work.

The Raw Story | Pelosi asks for Cunningham inquiry

2005-11-30T17:27:00.000-05:00

11/30/2005 @ 4:34 pm
Filed by RAW STORY

House Minority Leader Nancy Pelosi (D-CA) has written a letter to Speaker Dennis Hastert (R-IL), requesting a congressional probe of disgraced California Representative "Duke" Cunningham, Roll Call is reporting.

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Specifically, Pelosi is asking for a bipartisan committee with experience in national security to investigate Cunningham's recent admissions of guilt in a criminal case plea bargain. Cunningham has admitted to accepting inappropriate gifts from two defense contractors while serving on the House Intelligence Committee.

Pelosi asks that the committee determine whether or not Cunningham compromised national security or misused classified information in aiding the contractors.

Excerpted from Nov. 30 issue of Roll Call:

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?[Cunningham] has admitted engaging in criminal conduct with private companies seeking contracts from the United States government for national security-related matters,? Pelosi wrote in her letter. ?We do not know the extent of the information which he provided to these companies, or how it may have compromised national security.?

Pelosi also wants Hastert to ask the Department of Defense, CIA and Office of the Director of National Intelligence to conduct their own investigations into Cunningham?s relationship with MZM, Inc., and ADCS, Inc., two defense firms. Pelosi did not name the companies in her letter to Hastert, but the firms have been linked to Cunningham in media reports, and the Justice Department is continuing its own criminal investigation into his activities.

...

Cunningham allegedly received these illicit payments from Mitchell Wade, former owner of MZM, and Brent Wilkes, president of ADCS. Neither man was formally named in the plea agreement, although media reports and corporate records indicate that Wilkes and Wade are the ?Co-conspirator #1? and ?Co-conspirator #2? referred to in Cunningham?s plea deal.

With help from Cunningham and other lawmakers, ADCS has received at least $80 million in Pentagon contracts since 1999, while MZM won $160 million from the Defense Department over a three-year period. Democrats want to explore how those contracts were handled within the Pentagon and are not content to let Cunningham?s plea deal short-circuit any Washington, D.C.-based probe of the matter. Democrats are privately threatening to use other parliamentary maneuvers to force a Cunningham probe if their request to Hastert is turned down.

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Print Story: Contractor spends big on key lawmakers on Yahoo! News

2005-11-30T13:13:00.000-05:00

By Matt Kelley and Jim Drinkard, USA TODAY

A San Diego businessman under investigation in the bribery case of former congressman Randy "Duke" Cunningham is a well-known GOP fundraiser whose generosity to key members of Congress came at the same time his company saw large increases in its government contracts, public records show.

Brent Wilkes, the founder of defense contractor ADCS Inc., gave more than $840,000 in contributions to 32 House members or candidates, campaign-finance records show. He flew Republican lawmakers on his private jet and hired lobbyists with close ties to those lawmakers.

Wilkes' charitable foundation, which aids sick children and military families, honored congressmen at black-tie banquets and donated to their favorite causes. Wilkes was also a "Pioneer" for President Bush's 2004 re-election campaign, meaning he raised at least $100,000.

With help from two committee chairmen, ADCS got more than $90 million in government contracts since its founding in 1995, helping propel Wilkes from an obscure businessman to a millionaire prominent in Republican circles.

Neither Wilkes nor any other congressmen have been charged with crimes, and the donations and contributions are legal so long as they weren't intended to influence official actions. The links illustrate the connections between lawmakers who oversee defense spending and a contractor seeking some of that money.

Cunningham resigned Monday after pleading guilty to tax evasion and conspiracy to accept bribes. He admitted accepting $2.4 million in bribes from two defense contractors and two other businessmen in exchange for helping those companies get contracts. (Related story: Bribed congressman resigns, pleads guilty to charges)

Wilkes, whose home and company headquarters were searched by federal agents this year during the Cunningham investigation, wasn't named in the plea documents. The documents say "co-conspirator No. 1" spent more than $636,000 on Cunningham. Wilkes' attorney, Michael Lipman, acknowledged that his client is "co-conspirator No. 1." He declined to comment further about the case.

Contributions to chairmen

Since 1994, Wilkes and ADCS gave $40,700 in campaign contributions to Rep. Duncan Hunter (news, bio, voting record), a San Diego Republican who now chairs the House Armed Services Committee. Hunter has acknowledged that he joined with Cunningham in 1999 to contact Pentagon officials who reversed a decision and gave ADCS one of its first big contracts, for nearly $10 million. Hunter's spokesman, Joe Kasper, said the congressman was unavailable for comment Tuesday.

Another California Republican, Appropriations Committee Chairman Jerry Lewis, led panels that ordered the Pentagon to continue programs that aided ADCS when Pentagon officials wanted to cut them. Lewis got $71,253 from Wilkes and his employees in donations since 1993. Wilkes gave Lewis donations and met him at various events, Lewis spokesman Jim Specht said, but "he never talked with him about a defense project."

Before becoming the Appropriations chairman this year, Lewis led the subcommittee that oversees defense spending. In the late 1990s, that panel directed the Pentagon to continue converting paper documents to computer records, the work that ADCS does. Pentagon officials had tried to end the program's funding.

The 1999 defense budget, for example, directed $45 million be spent on document conversion. Wilkes and his employees gave Lewis $7,000 in campaign contributions the day after his subcommittee's first hearing on the bill.

After the Pentagon declined to give ADCS a contract, it awarded the company a $9.8 million deal in mid-1999 after "inquiries from two members of Congress," a Defense investigation found. Hunter and Cunningham have said they asked Pentagon officials about the program.

The money went to ADCS instead of projects for the Army's UH-60 Black Hawk helicopter, Air Force bases, and a parts center in Oklahoma, according to the report by the Pentagon inspector general, prompted by a request from a Defense official.

Valuable in-the-air time

Wilkes' ties to Hunter and Cunningham go beyond campaign contributions. In 2003, the businessman's foundation hosted a "Salute to Heroes" gala to give Hunter an award, just as it did for Cunningham a year earlier. The Wilkes Foundation gave $1,000 in 2003 to a charity run by two of Hunter's staffers, records show.

Wilkes also provided a jet that Cunningham and other Republicans used for more than a dozen flights to campaign fundraising events since 2001, records show.

Providing flights gives donors a chance for hours of one-on-one contact with the lawmaker they want to influence, said Keith Ashdown of the watchdog group Taxpayers for Common Sense.

"Most other lobbyists would give up their second lung to get that kind of access," Ashdown said. "It's not always illegal, but it's definitely a strategy of influence that's unparalleled."

Republicans Denounce Ex-Lawmaker - New York Times

2005-11-30T10:44:00.000-05:00

By JOHN M. BRODER and CARL HULSE
LOS ANGELES, Nov. 29 - Concerned that the stain of former Representative Randy Cunningham's admission that he took bribes and evaded taxes could damage the party's prospects, President Bush and other Republican leaders issued strong denunciations of Mr. Cunningham's actions on Tuesday.

With several investigations focusing on top Republican officials and growing public unease over the war in Iraq and economic policy at home, party leaders moved to distance themselves and their party from Mr. Cunningham's felony plea.

Though some Republican officials said Democrats in Congress were equally guilty of questionable behavior, including lobbyist-paid trips and underreporting of campaign contributions, they acknowledged that Republicans, because they control the White House and Congress, are being held to a higher standard by many voters. They also expressed shock and embarrassment at the extent of Mr. Cunningham's wrongdoing, which the president described on Tuesday as "outrageous."

Mr. Bush, answering a question about Mr. Cunningham's resignation from a reporter in El Paso, said members of Congress must take their legal and ethical obligations seriously.

"The idea of a congressman taking money is outrageous," the president said. "And Congressman Cunningham is going to realize that he has broken the law and is going to pay a serious price, which he should."

Mr. Cunningham, an eight-term representative from San Diego, pleaded guilty on Monday to charges that he took at least $2.4 million in bribes to steer Pentagon contracts to two friends. He announced his resignation from Congress hours after entering his plea.

Representative David Dreier, the California Republican who heads the House Rules Committee, said Mr. Cunningham had violated the ethical standards of the House and was right to resign immediately.

"It is regretful that his great service to this country has been tarred by his actions," Mr. Dreier said in a statement.

The case intensified attention to charges of ethical and legal violations by members of Congress, including such influential leaders as Senator Bill Frist of Tennessee, the Republican leader in the Senate, and Representative Tom DeLay, the Texas Republican who was forced to step down as majority leader after he was indicted in Texas in September.

In addition, three of Mr. Cunningham's Republican colleagues in California have drawn scrutiny for possible violations of House ethics rules.

One of them, Representative John T. Doolittle, has acknowledged that his wife, Julie, who runs a marketing firm in Washington, has been subpoenaed in the federal investigation of the former lobbyist Jack Abramoff. Mr. Doolittle's former chief of staff, Kevin A. Ring, briefly worked for Mr. Abramoff after leaving Mr. Doolittle's Congressional office.

Mr. Doolittle's press secretary, Laura Blackann, said that Mr. Doolittle had not been contacted by the Justice Department in connection with the Abramoff investigation and that any dealings between the two men were proper and legal.

Another California Republican, Representative Dana Rohrabacher from Orange County, has acknowledged receiving a $23,000 option on a screenplay from a Hollywood producer who last month was charged with multiple counts of fraud in connection with an investment scheme.

Mr. Rohrabacher acknowledged introducing the producer, Joseph Medawar, to several officials in Washington, with the understanding that Mr. Medawar was working on a television series about the Department of Homeland Security.

Mr. Rohrabacher said that the House ethics committee had approved his screenplay deal with Mr. Medawar and that he was unaware of any possible fraud.

"I have not seen all the evidence," he said. "Whether he is a flamboyant incompetent or he's a con man will be determined by the jury."

A third California Republican, Representative Richard W. Pombo, has been criticized by Democrats as failing to report the value of two foreign trips paid for by a lobby group, paying family members from political accounts, and accepting campaign contributions from Mr. Abramoff and Mr. DeLay.

Mr. Pombo dismissed the accusations as partisan attacks.

Karen Hanretty, communications director for the California Republican Party, said the attacks were part of a broader assault on Republicans.

"There's always a roomful of researchers who are digging up dirt on the opposition," Ms. Hanretty said, "and that's just part of the political game, whether it's at the state level or the national level."

"The party that holds power in D.C. always comes under greater scrutiny," she said.

But accusations of ethical violations pale beside Mr. Cunningham's admitted criminal conduct.

According to his plea agreement with federal prosecutors, Mr. Cunningham, a member of the House Appropriations Committee, took hundreds of thousands of dollars in cash from two military contractors while helping them win Pentagon contracts.

Lawyers involved in the case identified the contractors as Mitchell J. Wade, founder of MZM Inc., a company he has since sold that provides intelligence services to the Pentagon and other government agencies, and Brent Wilkes, founder of a data processing company that did business with the Defense Department.

Prosecutors said the contractors also gave Mr. Cunningham hundreds of thousands of dollars' worth of gifts, including a Rolls-Royce, two 19th-century French commodes, four armoires, a wooden sideboard with turned wooden spindles, three nightstands, a necklace, a laser shooting simulator and $15,000 worth of Oriental carpets (described in court documents as "one Indo Herati, one Karaja, one Indo Keshan and two Cino Kerman rugs").

The contractors also paid for tens of thousands of dollars' worth of repairs to the Rolls-Royce and to Mr. Cunningham's boat, the Kelly C, and essentially bought the former congressman a $2.55 million home in the exclusive San Diego County community of Rancho Santa Fe.

Under the plea deal, Mr. Cunningham has to forfeit the house, $1.8 million in cash, and all the rugs and antiques.

Carol C. Lam, the United States attorney for the Southern District of California, called Mr. Cunningham's actions "a crime of unprecedented magnitude and extraordinary audacity." Ms. Lam said the investigation was continuing.

Calls to Mr. Cunningham's office were not returned. He made no public appearances on Tuesday.

John M. Broder reported from Los Angeles for this article, and Carl Hulse from Washington.

Bush says congressman taking bribes 'outrageous' - Yahoo! News

2005-11-29T15:03:00.000-05:00

U.S. President George W. Bush on Tuesday verbally slapped a congressman from his Republican party for taking bribes, calling it "outrageous."

Rep. Randy "Duke" Cunningham of California resigned on Monday after pleading guilty to taking $2.4 million in bribes in exchange for help in securing Defense Department contracts.

"Any member of Congress, Republican or Democrat, must take their office seriously and the ethics seriously," Bush said to reporters during a trip to Texas.

"The idea of a congressman taking money is outrageous. And Congressman Cunningham is going to realize that he has broken the law and is going to pay a serious price, which he should," Bush said.

Cunningham, 63, an eight-term congressman and decorated Vietnam War pilot, admitted taking cash, antiques, a yacht, vacation expenses and money for his daughter's graduation party from defense contractors between 2000 and 2005. He faces up to 10 years in prison and is to be sentenced on February 27.

It was the latest scandal to hit Republicans, who control Congress.

U.S. Rep. Tom DeLay, a Texas Republican, stepped down as House of Representatives majority leader when he was indicted in September on charges of breaking his state's campaign finance laws.

The Securities and Exchange Commission is investigating stock sales by Senate Majority Leader Bill Frist, a Tennessee Republican.

And former vice presidential aide Lewis "Scooter" Libby was charged last month with perjury in an investigation over the leaking of a CIA operative's identity.

Print Story: Gifts Rep. Cunningham Admitted Receiving on Yahoo! News

2005-11-29T12:59:00.000-05:00

By The Associated Press

Some of the payments accepted by Rep. Randy "Duke" Cunningham as detailed in his plea agreement:

? $200,000 toward the purchase of his Arlington, Va., condominium.

? $140,000 to a third party for the "Duke-Stir" yacht, which was moved to his boat slip for his use.

? $16,867.13 to a marine services company for repairs to his own yacht, the "Kelly C."

? $12,000 paid to an antique store for three night stands, a leaded glass cabinet, a washstand, a buffet and four armoires.

? $6,632 paid to a furniture store for a leather sofa and a sleigh-style bed.

? $7,200 paid to an antique store for a circa 1850 Louis Phillipe period commode and a circa 1830 Restoration period commode.

? $13,500 toward the purchase of a Rolls-Royce.

? $17,889.96 for repairs to the Rolls-Royce.

? $11,393.56 paid to a moving company to ship his belongings from his Arlington condominium to his San Diego-area home.

? $2,081.30 paid to a Washington, D.C., hotel for his daughter's graduation party.

? $9,200 paid to a manufacturer for two Laser Shot shooting simulators.

? $10,000 paid to various hotels, resorts and restaurants for his meals and entertainment expenses.

? Hundreds of thousands of dollars in cash to him and a company he controlled.

? Source: Plea agreement filed in U.S. District Court.

KESQ NewsChannel 3 Palm Springs, CA: Schwarzenegger has two weeks to set California election

2005-11-29T12:41:00.000-05:00

SAN DIEGO (AP) - California Governor Arnold Schwarzenegger's office has two weeks to set a date for an election to replace Congressman Randy Cunningham.

The Republican resigned yesterday after admitting he "broke the law" by taking nearly two and-a-half million dollars in bribes.

The election must be held within 120 days after Schwarzenegger sets the date. Cunningham's district is heavily Republican.

He pleaded guilty to graft, admitting he took money mostly from defense contractors in exchange for government business and other favors.

Cunningham could get up to ten years in prison when he's sentenced in February on charges of conspiracy, fraud and tax evasion.

Lawmaker Quits After He Pleads Guilty to Bribes - New York Times

2005-11-29T00:28:00.000-05:00

By JOHN M. BRODER
LOS ANGELES, Nov. 28 - Representative Randy Cunningham, a Republican from San Diego, resigned from Congress on Monday, hours after pleading guilty to taking at least $2.4 million in bribes to help friends and campaign contributors win military contracts.

Mr. Cunningham, a highly decorated Navy fighter pilot in Vietnam, tearfully acknowledged his guilt in a statement read outside the federal courthouse in San Diego.

"The truth is, I broke the law, concealed my conduct and disgraced my office," he said. "I know that I will forfeit my freedom, my reputation, my worldly possessions and, most importantly, the trust of my friends and family."

Mr. Cunningham, 63, pleaded guilty to one count of tax evasion and one count of conspiracy to commit bribery, tax evasion, wire fraud and mail fraud. He faces up to 10 years in prison and hundreds of thousands of dollars in fines and forfeitures.

Prosecutors said he received cash, cars, rugs, antiques, furniture, yacht club fees, moving expenses and vacations from four unnamed co-conspirators in exchange for aid in winning military contracts. None of this income was reported to the Internal Revenue Service or on the congressman's financial disclosure forms, the government said.

Mr. Cunningham, who is known as Duke, lived while in Washington on a 42-foot yacht, named the Duke-Stir, owned by one of the military contractors that received tens of millions of dollars in federal contracts that prosecutors said Mr. Cunningham helped steer its way.

Mr. Cunningham, who is known for his combative conservatism and his emotional outbursts, served on the defense subcommittee of the House Appropriations Committee and as chairman of the House Intelligence subcommittee on terrorism and human intelligence.

"He did the worst thing an elected official can do," Carol C. Lam, the United States attorney, said in a statement. "He enriched himself through his position and violated the trust of those who put him there."

Mr. Cunningham's plea adds to the ethics cloud over the Republican-controlled Congress and the Bush White House.

In the Senate, Bill Frist, Republican of Tennessee and the majority leader, is under scrutiny by the Securities and Exchange Commission for the timing of his trades in the stock of his family's health care company. In the House, Representative Tom DeLay, Republican of Texas, was forced to step down as majority leader after he was indicted on conspiracy and money laundering charges in his home state.

In a separate Justice Department investigation, Michael Scanlon, a former spokesman for Mr. DeLay, pleaded guilty last week to bribery. Prosecutors said Mr. Scanlon was part of a conspiracy to defraud Indian tribes and win legislative favors from lawmakers in return for campaign donations, meals, entertainment and other benefits. A former White House aide has also been indicted in that investigation, which is centered around Jack Abramoff, a lobbyist and ally of Mr. DeLay who worked with Mr. Scanlon. As part of his plea, Mr. Scanlon agreed to cooperate in the investigation.

In addition, I. Lewis Libby Jr., the former chief of staff to Vice President Dick Cheney, was indicted last month for perjury and false statements in the investigation of the leaking of the name of a C.I.A. operative. Other White House officials, including the senior political adviser Karl Rove, remain under investigation in that case.

Democrats in Congress hope that the legal and ethical woes afflicting Republicans will weaken the party in policy debates and at the polls next November. Representative Nancy Pelosi of California, the House Democratic leader, called Mr. Cunningham's acceptance of bribes an "egregious act" that was symptomatic of Republican values.

"This offense is just the latest example of the culture of corruption that pervades the Republican-controlled Congress, which ignores the needs of the American people to serve wealthy special interests and their cronies," Ms. Pelosi said in a statement.

The charging document said that in addition to the other gifts and services, Mr. Cunningham received from several unnamed co-conspirators a Rolls Royce, a graduation party for his daughter, a $200,000 down payment on a condominium and the payment of capital gains taxes on the sale of his home.

Federal authorities said that Mr. Cunningham was cooperating with the continuing investigation and that further charges involving the bribery conspiracy were likely.

Mr. Cunningham entered his plea before Judge Larry A. Burns of the United States District Court for the Southern District of California. He was fingerprinted and photographed and released on his own recognizance.

Judge Burns set sentencing for Feb. 27. Mr. Cunningham, in his statement, said he expected to do time in prison. "In my life, I have known great joy and great sorrow. And now I know great shame," he said. "I cannot undo what I have done. But I can atone."

Under California law, Gov. Arnold Schwarzenegger has 14 days to call a special election to fill Mr. Cunningham's seat. The election must occur within 120 days.

Mr. Cunningham's troubles began last summer when the Copley News Service and The San Diego Union-Tribune reported that Mitchell J. Wade, the founder of MZM Inc., a military contracting firm, bought Mr. Cunningham's home in Del Mar for $1,675,000 in 2003 and sold it nine months later for $975,000, a $700,000 loss.

Mr. Cunningham denied any wrongdoing in the house sale, but announced a few weeks after the reports appeared that he would not seek a ninth term in Congress in November 2006.

Mr. Cunningham used the profits from the sale to buy a luxury home in Rancho Santa Fe for $2.55 million, which he and his wife, Nancy, have since put up for sale. Under the plea agreement announced on Monday, he will forfeit the Rancho Santa Fe house and nearly $2 million in cash and home furnishings.

Carl Hulse contributed reporting from Washington for this article.

DeLay defends Cunningham's home sale

2005-11-28T20:17:00.000-05:00

House Majority Leader Tom DeLay (R-Texas) yesterday defended Rep. Duke Cunningham (R-Calif.) after calls from congressional Democrats to investigate the Republican appropriator for selling his San Diego home to a defense contractor whose firm had received $65 million in federal funds in 2004.

?Duke Cunningham is a hero,? DeLay said during a press briefing Tuesday. ?He is an honorable man of high integrity.?

Cunningham sold his home in 2003 to Mitchell Wade, president of MZM Inc., a Nevada-based defense contractor that specializes in security and intelligence-gathering technology. The company lost $700,000 after it resold the property eight months later, the San Diego Union-Tribune first reported Sunday.

At the briefing, DeLay also defended Democratic Rep. John Murtha (Pa.), who was the subject of a Los Angeles Times article questioning the lobbying activities of Murtha?s brother in connection with passage of last year?s $417 billion defense spending bill.

The article said Murtha?s brother, Robert ?Kit? Murtha, is a senior partner at a Washington lobbying firm that represented 10 companies that received a combined $20.8 million in contracts from the defense bill.

?I know that John Murtha is an honorable man,? DeLay said during the briefing, adding that he did not know any details of the article. ?He is a man of great integrity.?

DeLay would not say if the House planned to investigate either member.

?We?re always concerned when a member of Congress violates the rules of the House,? DeLay said before adding, ?Just because it appears in an article doesn?t mean a thing.?

DeLay recommended that the ethics committee resolve its staffing issue by establishing bipartisan co-staff directors. The committee has been stalled since late April, after a four-month partisan dispute over committee rules, over another partisan clash about whether Chairman Doc Hastings (R-Wash.) could name his current chief of staff, Ed Cassidy, as staff director of the committee.

If the members of the committee cannot agree on one person, DeLay said, they should ?set up a bipartisan? committee staff.

DeLay himself is widely expected to be the target of the committee?s first investigation when it does reconvene for ethical questions surrounding trips he took to Russia, Scotland and South Korea between 1997 and 2001.

Responding to an earlier question about the G-8 summit meeting of world leaders that will be held next month in Scotland, DeLay deadpanned, ?Where are they holding that?? which elicited laugher from the assembled media.

Calif. Congressman Admits Taking Bribes - Yahoo! News

2005-11-28T15:58:00.000-05:00

By ELLIOT SPAGAT, Associated Press Writer
58 minutes ago

Rep. Randy "Duke" Cunningham pleaded guilty Monday to conspiracy and tax charges and tearfully resigned from office, admitting he took $2.4 million in bribes to steer defense contracts to conspirators.

Cunningham, 63, entered pleas in U.S. District Court to charges of conspiracy to commit bribery, mail fraud and wire fraud, and tax evasion for underreporting his income in 2004.

Cunningham answered "yes, Your Honor" when asked by U.S. District Judge Larry Burns if he had accepted bribes from someone in exchange for his performance of official duties.

Later, at a news conference, he wiped away tears as he announced his resignation.

"I can't undo what I have done but I can atone," he said.

Cunningham, an eight-term Republican congressman, had already announced in July that he would not seek re-election next year.

House Ethics rules say that any lawmaker convicted of a felony no longer should vote or participate in committee work. Under Republican caucus rules, Cunningham also would have lost his chairmanship of the House Intelligence subcommittee on terrorism and human intelligence.

The former Vietnam War flying ace was known on Capitol Hill for his interest in defense issues and his occasional temperamental outbursts.

After the hearing, Cunningham was taken away for fingerprinting and released on his own recognizance until a Feb. 27 sentencing hearing. He could receive up to 10 years in prison.

He also agreed to forfeit to the government his Rancho Santa Fe home, more than $1.8 million in cash and antiques and rugs.

In a statement, prosecutors said Cunningham admitted to receiving at least $2.4 million in bribes paid to him by several conspirators through a variety of methods, including checks totaling over $1 million, cash, rugs, antiques, furniture, yacht club fees and vacations.

"He did the worst thing an elected official can do ? he enriched himself through his position and violated the trust of those who put him there," U.S. Attorney Carol Lam said. The statement did not identify the conspirators.

The case began when authorities started investigating whether Cunningham and his wife, Nancy, used the proceeds from the $1,675,000 sale to defense contractor Mitchell Wade to buy the $2.55 million mansion in Rancho Santa Fe. Wade put the Del Mar house back on the market and sold it after nearly a year for $975,000 ? a loss of $700,000.

He drew little notice outside his San Diego-area district before the San Diego Union-Tribune reported last June that he'd sold the home to Wade.

Cunningham's pleas came amid a series of GOP scandals. Rep. Tom DeLay of Texas had to step down as majority leader after he was indicted in a campaign finance case; a stock sale by Senate Majority Leader Bill Frist is being looked at by regulators; and Vice President Dick Cheney's chief of staff was indicted in the CIA leak case.

Rep. Cunningham Pleads Guilty - Yahoo! News

2005-11-28T13:03:00.000-05:00

Rep. Randy "Duke" Cunningham pleaded guilty to conspiracy and tax violations after an investigation of the California Republican's home sale.

Cunningham has been under investigation since his sale of his home to a defense contractor at an apparently inflated price in 2003 attracted the attention of federal investigators.

He made his plea known at a hearing in federal court in San Diego on Monday.

Cunningham, 63, is an eight-term congressman and Vietnam War flying ace.

In November 2003, he sold his Del Mar, Calif., home to defense contractor Mitchell Wade for $1,675,000. Wade put the house back on the market and sold it after nearly a year for $975,000 ? a loss of $700,000 in one of the nation's hottest housing markets.

Cunningham and his wife, Nancy, used the proceeds from the sale to buy a $2.55 million mansion in ritzy Rancho Santa Fe, Calif.

Wade also let Cunningham live rent-free on his yacht, the Duke Stir, at the Capital Yacht Club. His firm, MZM Inc., donated generously to Cunningham's campaigns.

Around the same time, MZM was winning valuable defense contracts at a time when Cunningham sat on the House Appropriations subcommittee that controls defense dollars. In 2004 the little-known company based in Washington, D.C., tripled its revenue and nearly quadrupled its staff, according to information posted on the company Web site.

Though he denied wrongdoing when he announced in July that he wouldn't seek re-election, Cunningham himself acknowledged that the sale didn't look good.

Rep. Cunningham to Plead Guilty - Yahoo! News

2005-11-28T12:02:00.000-05:00

By ERICA WERNER, Associated Press Writer

Rep. Randy "Duke" Cunningham will plead guilty to tax violations, a source close the investigation of the California Republican has told The Associated Press.

Cunningham has been under investigation since his sale of his home to a defense contractor at an apparently inflated price in 2003 attracted the attention of federal investigators.

A hearing in the case was scheduled in federal court in San Diego on Monday, and two sources close to the investigation said Cunningham would enter a guilty plea. One of those sources said he would plead to tax violations related to the home sale

Democratic congressional hopeful calls for finance reform North County Times - North San Diego and Southwest Riverside County News

2005-11-22T10:04:00.000-05:00

By: WILLIAM FINN BENNETT - Staff Writer

MIRA MESA ---- Democratic congressional hopeful and Cardiff School Board member Francine Busby presented a four-point ethics-reform proposal for cleaning up campaign finances in Congress, at a Monday news conference.

The proposal was part of a campaign event and was the latest in a series of Busby's criticisms of alleged ethics violations, including bribery allegations against her former opponent, Randy "Duke" Cunningham, R-Escondido.

A local Republican leader, meanwhile, accused Busby of regurgitating a "spoon-fed" proposal created by the Democratic Party in Washington.

Addressing a group of about 40 supporters at West View Park in San Diego, Busby was joined by former state Sen. Dede Alpert, in making her proposal for legislation she said she hopes to present to Congress if she wins the 50th District seat now held by Cunningham, who has dropped out of the race for his seat amidst allegations that he bribed a Washington contractor.

In the 2004 congressional election, Busby was the Democratic challenger to Cunningham.

Busby said Americans deserve better than having Congressional representatives with too-cozy-for-comfort ties to government contractors and Washington lobbyists.

"This proposal will end those 'sugar daddy' relationships once and for all," Busby said.

Reached by phone Monday, Republican Party of San Diego County Chairman Ron Nehring said it is hypocritical for a Democrat to be pointing fingers at Republicans.

"The same Democratic leadership that gave us Jim Wright and Bill Clinton are now pretending to be experts on ethics," Nehring said.

Busby said her proposal calls for the following:

- Banning all outside personal financial relationships between members of Congress and government contractors.

- Banning members from promoting specific businesses to receive government contracts or regulatory favors.

- The elimination of anonymous appropriations. Under the current system, members are able to earmark certain projects for government funding without clearly identifying the names of the companies receiving the contracts.

- Banning all privately funded congressional travel.

The 50th District covers much of North San Diego County and stretches as far south as Clairemont Mesa and portions of La Jolla. With about 159,000 registered Republicans versus roughly 106,000 registered Democrats, the district has long been considered a safe seat for the GOP.

Busby is hoping to replace Cunningham, who recently announced he would not seek re-election amid a federal grand jury investigation of his financial ties to the founder of Washington defense contractor MZM Inc. At the heart of that investigation are two deals: a 2003 real estate transaction in which Cunningham sold his Del Mar Heights home to MZM founder Mitchell Wade for a price that appeared to be hundreds of thousands of dollars over market value, and Cunningham's rent-free living arrangements aboard a 42-foot Washington yacht owned by Wade that was named the "Duke Stir."

Cunningham has vigorously denied any improprieties, and has acknowledged that he used "poor judgment" in having business dealings with Mitchell, whose company received tens of millions of dollars in defense contracts. The contracts were secured through a defense-related congressional subcommittee on which Cunningham sits.

In July, Cunningham announced that he would not seek re-election, citing the increasing stress the grand jury investigation was taking on his family.

Following that announcement, several local Republicans announced plans to run for that party's nomination to replace the former Vietnam era Navy ace pilot.

Referring to the allegations against Cunningham and the sale of his home to Wade, Busby said that her real estate desires are of a different type.

"The only house I am interested in is the one on the hill with a round dome and that has been for sale for too long," she said. "I am running for Congress to take down that for-sale sign."

Officials with Cunningham's office could not be reached for comment late Monday.

Nehring noted that a campaign finance reform bill was just approved by a Republican Party Congress and President George Bush.

"Democrats could have passed comprehensive finance reform when they had the majority in Congress, (but) they didn't," Nehring said. "It took a Republican Congress and a Republican president to pass (such) reform."

SignOnSanDiego.com > News > Mexico -- Smelling money in sewage

2005-11-13T09:15:00.000-05:00

Area firm hopes to sign no-bid deal with U.S. agency to treat Tijuana region's polluted water, then recycle it
By Mike Lee and Terry Rodgers
UNION-TRIBUNE STAFF WRITERS
November 13, 2005

Where most people smell sewage, two North County businessmen smell money.

By leveraging a U.S. government-funded wastewater treatment system pegged for Tijuana, developer Enrique Landa and consultant Jim Simmons aim to become the kingpins of recycled water in the parched state of Baja California.
The cornerstone of their project is a no-bid contract with a little-known U.S. agency. The deal to build and operate the facility is supposed to be signed by Dec. 19. It capitalizes on two trends: the U.S. government awarding more sole-source contracts, and cities looking to the private sector to handle wastewater treatment.

But even with signed papers, the Tijuana concept would be risky because it relies on the budget blessing of an increasingly cost-conscious U.S. Congress, real estate negotiations in Mexico and final approval by the Mexican government. Landa and Simmons created Bajagua Project LLC solely to pursue the deal for a treatment plant, which includes aerated ponds where pollutants are broken down by bacteria and removed from wastewater. It's taken about a decade and $20 million for them to reach this point.

The men and their suite of consultants have been so successful at marketing that their company's name is synonymous with the project they aim to build – like Kleenex is to tissues.

Bajagua has been sold to the American public as a way to keep Tijuana's raw sewage from flowing across the border and onto beaches in San Diego County. But the company's investors are angling for something potentially much more lucrative: the first high-grade water recycling operation in the Tijuana region.

"We see a bigger opportunity here," Simmons said. "We want to be the purveyors of reclaimed water in Mexico."

Bajagua officials estimate the company could serve more than half of Tijuana's current water demand. Potential customers include nearby maquiladoras – factories that make everything from consumer electronics to medical devices. Some of these businesses rely on a steady flow of water for their work.
Bajagua also may be able to inject purified water into an aquifer or use it to irrigate greenbelts.

To recycle water, the company would need to enlarge its proposed plant to include facilities that super-scrub and then deliver the water. U.S. taxpayers would not subsidize the expansion. However, such infrastructure would leave Bajagua in position to continue selling highly treated water even when the U.S.-funded portion of the plant is given to Mexico in 20 years.

It's too soon to speculate publicly about the profit potential, Simmons said, because terms haven't been negotiated with the Mexican government, which would own whatever purified water Bajagua produces.

Some people question whether Landa and Simmons know what they are doing.

Mexico's lack of infrastructure and its price controls on recycled water make Bajagua's resale concept shaky, said Oscar Romo of the Tijuana River National Estuarine Research Reserve in Imperial Beach.

"It's very easy to say they are going to recycle the water, but ... who is going to pay to deliver that water?" he said.

Doubters have hounded Bajagua for years, but they have not derailed the company's plans.

One reason: Bajagua investors have tapped into the growing popularity of public-private partnerships to run facilities that local governments traditionally operated.

"The public sector can maintain an adequate level of control over the whole project while taking advantage of the skills refined by the private sector in the competitive marketplace," said Richard Norment, executive director of the National Council for Public-Private Partnerships in Washington, D.C., which touts such deals.

The number of privately operated U.S. wastewater plants has more than doubled in the last six years – from about 2 percent to 5 percent of all facilities, Norment estimated. He attributed the rise to an increasing number of cities unable to meet federal clean-water mandates on their own.

The public-private arrangements succeed because companies usually operate more efficiently than agencies, Norment said.

The Bajagua concept appeals to some people in an additional way: The U.S. government is steering more and more contracts to specific companies without opening them up for bids.

In fiscal 2003, the Bush administration entered into 43,000 contracts worth $107 billion without "full and open competition," according to a report done by House Democrats. That was $40 billion more – or 60 percent higher – than what was spent during the final year of the Clinton administration, the research showed.

Critics of no-bid contracts fear myriad abuses when the government gets too cozy with businesses.

"Sole-source contract awards limit aggressive negotiations, prohibit innovations and result in increased costs," said Scott Amey, an attorney for the Washington, D.C., watchdog group Project on Government Oversight.
Key details of how Bajagua obtained the no-bid contract remain secret.

The San Diego Union-Tribune filed a Freedom of Information Act request for documents that Bajagua and other firms submitted in 2004 to establish their qualifications. The request was rejected by the International Boundary and Water Commission, the U.S. agency in charge of the project.

Some details have been made public.

Bajagua is offering to build the treatment plant without any upfront money from the U.S. government. The company expects to earn $4.5 million to $6 million on its investment, plus fees for managing the facility.

Bajagua aims to serve as an intermediary to obtain all necessary permits and approvals. It would leave the construction work, as well as operation of the treatment plant, to other firms.

On the brink of finalizing a contract, the U.S. government still has no firm budget for building and operating the sewage treatment system.

The boundary commission estimates the Bajagua bill at $500 million over two decades. The Congressional Budget Office puts the figure at more than $600 million.

"The best we can do is guess what the costs would be," said Diana Forti, the commission's budget officer in El Paso, Texas.

Bajagua will finance the project through a Citigroup loan, hoping the U.S. government will repay the company through annual appropriations. It also plans to buy insurance in case Washington backs out.

"We have no guarantees" the Tijuana plant will be paid for by Congress, Forti said. "We simply continue to do as we have been directed."

Rep. Bob Filner, D-San Diego, has guided Bajagua through the political process and remains sure the project will be fully funded once a contract is signed.

"It's as safe as anything," he said.

The crucial budget is for fiscal 2008. The commission probably will ask for about $1 million that year to pay for the first month of operating Bajagua. If the money comes through, it's highly unlikely that Congress would refuse subsequent funding.

Bajagua has made another unusual offer: It pledges to repay the U.S. government for all construction costs of the plant if it's able to sell enough purified water in Tijuana.

It's too soon to say how the rebate concept will be made part of the contract, the commission's Forti said.

Bajagua officials said they have spent $20 million on engineering, lobbying and other aspects of the project. They're negotiating to buy about 235 acres near the junction of the Alamar and Tijuana rivers. That land will be enough for the treatment plant, plus any additional facilities to treat wastewater at higher standards for resale.

Simmons, 61, of Escondido is trying to stay positive about the project, but still says it's one of his worst investments. "If I had known it was going to take 10 years and all this money, I would not have done it," he said.

A former San Marcos councilman, Simmons has specialized in guiding developments through the pre-construction processes of engineering and permits. He's been involved in projects throughout San Diego County, from the San Elijo Hills housing development to the Gregory Canyon Landfill.

Court records show Simmons was in Chapter 13 bankruptcy reorganization from 1997 to 2001. He attributed his financial troubles to a soft California economy and his investments in Bajagua. A recession in the early 1990s hit developers hard, though it took a few years to topple Simmons, who typically gets paid when projects are completed. Simmons said he repaid all his debts with interest.

He lists the likes of U.S. Reps. Randy "Duke" Cunningham, Duncan Hunter and Filner as references for his San Marcos development company, Consultants Collaborative.

Landa, an architect who lives in Rancho Santa Fe, is a developer whose projects include a golf course housing development in Maui, Hawaii. He did not respond to several interview requests.

In the mid-1990s, according to his colleagues, Landa was developing El Florido business park in Tijuana when he ran into a host of infrastructure shortcomings involving sewage treatment, water supply and electricity.

The colleagues said Landa began thinking about how to provide basic services in his home country and expand his business park. He and Simmons also were partners in Agua Clara LLC, which helped to build a wastewater treatment plant in Sonora.

They turned Agua Clara into Bajagua. Eventually, Landa and Simmons added another major partner, Boston business lawyer Irwin Heller, and a few small investors.

"The momentum is heading in the right direction, and it's going to happen," Simmons said.

Aide: Cunningham focusing on congressional work North County Times - North San Diego and Southwest Riverside County News

2005-11-06T12:48:00.000-05:00

By: MARK WALKER - Staff Writer

While the outcomes of criminal and civil cases involving U.S. Rep. Randy "Duke" Cunningham remain uncertain, his chief spokesman says his boss remains focused on representing the 50th Congressional District.

But the eight-term Escondido lawmaker isn't in the public limelight very often these days. His appearances in the district that represents much of North County have been few in recent months, and his office issues only the occasional news release.

On Thursday, Cunningham appeared before reporters in Washington and took part in a news conference with U.S. Rep. Duncan Hunter, R-El Cajon, on a bill that calls for construction of a 2,000-mile fence along the entire border with Mexico.

"It's been proven that a better fence means less illegal activity at the border and the bottom line is that we must put homeland security first," Cunningham said during the conference. "The numbers speak for themselves that these fences work and we need to know who is coming into our country."

Spokesman Mark Olson said that on Wednesday Cunningham participated in a hearing on the prospect of the avian flu mutating and striking the United States.

Olson also wrote in an e-mail last week that his boss remains busy in his roles on conference committees ironing out differences between the House and Senate in defense and health and human services spending bills.

Two weeks ago, Cunningham missed a vote on a resolution that would have rejected a nationwide base closure and realignment plan, one strongly endorsed by California's congressional delegation and by local leaders because of how well this county's bases fared.

Olson wrote that Cunningham was "in a meeting" and would have voted against the resolution, which had it passed would have rejected the recommendations that are favorable for this county.

The only bill authored by Cunningham and adopted by the House in this session of Congress was his measure for a constitutional amendment to ban flag burning. The bill has since been bottled up in the Senate and is not expected to move forward.

Eight other bills he has sponsored remain in various House subcommittees. One of those highlighted by Olson is legislation that would place a moratorium on any new oil and gas exploration and leasing off the California coast.

In addition, Cunningham is listed as a co-sponsor of 118 other bills.

Olson said Cunningham also has focused his efforts on safe disposal of electronic waste and promotion of energy efficiency initiatives.

He attends weekly, closed-door briefings for members of the Permanent Select Committee on Intelligence. This week, Cunningham is slated to take part in a briefing from Zalmay Khalilzad, U.S. ambassador to Iraq.

None of Cunningham's aides have moved on since news of their boss's troubles emerged.

"I speak for everyone around here when I say that we are all proud of Duke's accomplishments over the years and enjoy working for him," Olson wrote.

To date, the only aide confirmed to have been subpoenaed to testify before the San Diego federal grand jury investigating Cunningham is Nancy Lifset, the congressman's legislative director.

New scandals help lower Cunningham's damaged profile North County Times - North San Diego and Southwest Riverside County News

2005-11-06T09:04:00.000-05:00

By: MARK WALKER - Staff Writer

Time and the seemingly ceaseless litany of Washington political disgraces have arguably been kind to U.S. Rep. Randy "Duke" Cunningham. In June, the veteran North County Republican lawmaker was the key attraction in the nation's scandal spotlight over a questionable real estate transaction with a defense contractor.

Nearly five months later, and despite being the target of an ongoing San Diego federal grand jury investigation, allegations of wrongdoing that are swirling around other top Republicans and Cunningham's decision not to seek re-election have served to move him far from the unwanted glare.

House Majority Leader Tom DeLay is facing criminal charges in Texas for allegedly funneling corporate campaign contributions to state legislative candidates, a violation of Texas law.

Senate Majority Leader Tom Frist is combatting allegations of insider stock trading.

Lewis "Scooter" Libby, who until 10 days ago was Vice President Dick Cheney's chief of staff, is facing a five-count criminal indictment for his alleged role in revealing the name of former CIA operative Valerie Plame.

All of which leaves Cunningham, who is alleged to have "demanded and received" a bribe in the real estate transaction, almost an afterthought on the nation's scandal scorecard.

"He was sort of the scandal du jour a few months ago," said Keith Ashdown of the Washington watchdog group Taxpayers for Common Sense. "Now, he's not only off the front page, he's out of the news entirely.

"Part of it is the logical progression of the investigation ---- if they are doing a good job with the investigation then there isn't a lot that we should know about what is happening," Ashdown said.

The spokeswoman for another Washington watchdog group, Citizens for Ethics and Responsibility in Washington, said that while Cunningham may be out of the spotlight, her group still considers him "one of the most corrupt members of Congress."

"He certainly remains the focus of the U.S. attorney's office out there and ultimately that is what matters," said spokeswoman Naomi Seligman. "The fact that Congress refuses to police itself through its ethics committee and take its own action against him is outrageous but we fully expect he will be indicted."

Cunningham has not sought the spotlight very often since announcing in mid-July that he would not seek re-election. His public appearances have been few and very selective in the last five months, usually limited to events not open to the general public.

His spokesman said last week that Cunningham is focusing on his legislative duties while his attorneys deal with his legal troubles and supporters raise money for his defense costs.

Cunningham has won approval to use his campaign account for those costs. In addition, the House Committee on Standards of Official Conduct recently approved establishment of a separate legal defense fund that can remain open and accept contributions for up to 10 years

Coming to a head?

There are rumblings in Washington that the investigation could be coming to a head. A source close to the investigation contends that prosecutors are "ready to go."

The source, who spoke only on the condition of anonymity, has been involved in the case since it began, predicted indictments could be coming soon.

Also caught up in the Cunningham probe are Poway defense contractor Brent Wilkes and his company, ADCS, and New York developer Tommy Kontogiannis.

Like Wade, Wilkes was a longtime Cunningham friend and campaign contributor whose company may have benefitted from the congressman's role on the powerful House Appropriations Committee.

Kontogiannis is also described as a friend who purchased Cunningham's boat and whose family's mortgage company helped finance the purchase of the congressman's Rancho Santa Fe home.

"The amount of money involved will be astounding," the source said of what he anticipates the government's case to allege.

Phillip Halpern, the lead assistant U.S. attorney handling the Cunningham case, declined comment when reached Friday.

'Demanded and received a bribe'

There is little doubt that the government's case hinges largely on Cunningham's dealings with Wade, who purchased the congressman's former home in Del Mar Heights for $700,000 more than he would sell it for less than a year later.

Wade never lived in the residence nor used it for what Cunningham said he thought would serve as West Coast corporate housing for Wade's former company, MZM Inc.

Wade also provided the congressman with a boat to stay aboard rent-free while in Washington. At the time those deals were being made, Wade's company saw its Defense Department contracts soar.

In the four months since the grand jury began its criminal investigation, the only concrete allegation to emerge is that Cunningham "demanded and received" a bribe from Wade in the form of the cash that changed hands in the real estate deal.

That allegation came in a civil suit filed by the same federal prosecutors leading the grand jury's work. The suit seeks to guarantee the government a large share of the money that Cunningham would realize from the sale of his Rancho Santa Fe estate home, a home purchased following the sale of the Del Mar Heights property to Wade and paid in part with money the government contends was a bribe.

Attorneys for Wade have consistently refused to comment on the case. Attorneys for Wilkes and ADCS have said the company is cooperating in the investigation. Kontogiannis has refused comment.

Cunningham's lead attorney, Washington lawyer K. Lee Blalack of the well-connected firm O'Melveny & Myers, said last week that the congressman is looking forward to some form of resolution.

"Duke is anxious for the grand jury proceeding to conclude and he will not address the substance of that investigation until it has run its course," Blalack said Wednesday.

'Come get me'

Cunningham has denied any wrongdoing, issuing a statement in June in which he said he exercised "poor judgment" in selling his Del Mar Heights home to a friend and campaign supporter. During an interview with a San Diego television station this summer, he declared, "If I've done anything wrong, come get me."

A few weeks later, he called reporters to Cal State San Marcos to read a prepared statement announcing that he would not seek a ninth consecutive term in Congress.

He also said he would sell the Rancho Santa Fe home, a disclosure that triggered the government civil suit. Cunningham also said that he and his wife, Nancy, would donate a portion of the proceeds from the home sale to charity.

The Cunninghams listed the gated estate for $3.5 million, but their attorneys have said they are having difficulty attracting prospective buyers because of the government's civil suit.

The home was purchased in part with the proceeds from the $1.675 million that contractor Wade paid Cunningham in late 2003 for his home in Del Mar Heights.

Defense fund, Top Gun

Cunningham's attorneys and the trustee for his defense fund refused to say how much money has been raised in the six weeks since it was established. The trust is not required to file a report on its funds for a few more weeks.

The only thing that Kenneth Batson would say is that contributions are being received on an almost daily basis. Batson is Cunningham's longtime campaign treasurer and also has been appointed as the trustee of the defense fund.

A couple of months ago, the Federal Election Commission ruled Cunningham also can use $650,000 in his campaign account to pay his attorneys.

According to Cunningham's chief of staff Harmony Allen, those bills may exceed $1.5 million for the former U.S. Navy combat pilot who earned the Navy Cross and the only pilot to win designation as an "ace" during the Vietnam War.

Besides his congressional salary and military pension, Cunningham's only other major source of income was sales of Vietnam War memorabilia from a Web site he owned and operated called Top Gun Enterprises Inc.

Included among the items for sale on that site was a Buck knife marketed as having the Seal of Congress emblazoned on it.

Using the seal on commercial products is forbidden under federal law, and the site was shut down and has remained "under construction" since the day after a North County Times report about the knife.

The forfeiture case

In late October, the government got a U.S. District Court judge to rule in its favor and postpone further action on the civil forfeiture case while the criminal case remains active.

Prosecutors argued that allowing Cunningham's attorneys to question its witnesses in that part of their case against the congressman could jeopardize the integrity of the criminal case.

Judge Dana Sabraw ordered a 60-day hold in the proceedings, a hold that expires in mid-December.

After that, Sabraw said the case goes ahead unless prosecutors demonstrate why a further hold would be necessary.

If the civil case resumes or the grand jury takes action, Cunningham will once again find himself making national headlines.

United Press International - NewsTrack - Judge sides with prosecutors

2005-10-22T11:35:00.000-04:00

SAN DIEGO, Oct. 21 (UPI) -- A federal judge's ruling may help prosecutors' effort to seize a mansion bought by U.S. Rep. Randy Cunningham, R-Calif., who is facing bribery charges.

The ruling by U.S. District Judge Dana M. Sabraw in San Diego said prosecutors don't have to prove, for now, their allegations that Cunningham bought the Rancho Santa Fe mansion with bribe money from a defense contractor, reports the San Diego Union-Tribune.

Cunningham bought the 7,600-square-foot home in December 2003 with proceeds from the sale of a Del Mar home to a friend who does business with the government, the newspaper said. Prosecutors allege the transaction was a bribe.

Technically, the judge granted a "stay" in the civil lawsuit seeking the forfeiture of Cunningham's house, the report said.

The decision means the congressman cannot keep the money from the sale of the house, which is now on the market for $3.15 million. That issue will be decided later, probably pending the completion of a criminal investigation into the case, the newspaper said.

Cunningham civil suit put on hold North County Times - North San Diego and Southwest Riverside County News

2005-10-19T09:44:00.000-04:00

By: MARK WALKER - Staff Writer

NORTH COUNTY ---- A judge has ordered a temporary halt in the federal government's civil suit against U.S. Rep. Randy "Duke" Cunningham, ruling that allowing the case to continue could jeopardize an ongoing criminal investigation of the congressman.

U.S. District Court Judge Dana M. Sabraw ruled that the U.S. attorney's office has shown that allowing Cunningham's attorneys to question government witnesses could "compromise the ongoing criminal investigation."

The suit seeks to stop the congressman and his wife, Nancy, from selling their gated, five-bedroom Rancho Santa Fe estate and using the proceeds as they wish.

Cunningham, a member of the House Appropriations Committee and its Defense Subcommittee, is the target of a San Diego federal grand jury investigation over his dealings with two defense contractors and a New York developer.

The Escondido Republican faces a bribery allegation based on the government's contention that he "demanded and received" money from one of the contractors and should not be allowed to profit from the sale of his home.

The Cunninghams have been trying to have the civil suit tossed in order to sell the home and buy a new residence.

Cunningham attorney K. Lee Blalack said Tuesday that he was disappointed that the stay had been granted, but pleased the judge limited any further action in the case to 60 days. Sabraw's ruling issued in San Diego late last week leaves the door open for the government to seek a stay beyond the 60 days.

In another development, Nancy Cunningham has hired San Diego attorney Michael Attanasio to represent her interests in the Rancho Santa Fe estate, which the couple have put up for sale for more than $3 million.

"There's no dispute that some portion of the home is community property and we have been retained to make sure Mrs. Cunningham's rights as a spouse under California law are protected," Attanasio said Tuesday. "That's really a different subject from the action against the congressman."

Attanasio added that he and other members of the firm where he works are reviewing the judge's order staying the civil suit to figure out their next steps.

In an Oct. 13 filing, Attanasio argued that Nancy Cunningham is an "innocent owner" of the home and that her financial interest in the property should be protected.

In July, the U.S. attorney's office filed the forfeiture action, contending that the $2.55 million the Cunninghams paid for the property involved money obtained from a bribe.

The action was filed after Cunningham announced he would sell the home and would not seek re-election to the 50th Congressional District seat.

Cunningham has denied any wrongdoing, but federal prosecutors allege that he coerced defense contractor Mitchell Wade to pay more for the couple's former home in Del Mar Heights than it was worth.

Wade, founder of MZM Inc., paid the couple $1.675 million for the property and then sold it a few months later for $700,000 less than what he gave the Cunninghams.

That grand jury probe was launched in late June following a published report of Cunningham's real estate deal with Wade, described by the 63-year-old lawmaker as a personal friend and campaign contributor.

The FBI, IRS and the Pentagon's Defense Criminal Investigative Service are leading the fieldwork in the investigation and broadened the probe late in the summer to include Cunningham's dealings with another contractor, ADCS of Poway.

Federal authorities also have searched the home and business of New York developer Thomas Kontogiannis, who purchased a boat from Cunningham and whose family's mortgage company has loaned the congressman money.

A defense fund was launched by the congressman last month and has been receiving contributions almost daily, according to Kenneth Batson, the longtime treasurer of Cunningham's campaign committee appointed to serve as trustee of that fund. Batson refused, however, to say how much has been raised.

Last month, the Federal Election Commission ruled that Cunningham also could use more than $650,000 in what was to have been the war chest for a 2006 re-election bid in order to pay his legal bills.

At the congressman's Capitol Hill offices, spokesman Mark Olson wrote in an e-mail Tuesday that Cunningham will soon sit as co-chairman of a joint subcommittee meeting discussing homeland security and the role of the chief intelligence officer.

Cunningham also will be involved in ironing out the differences in House and Senate defense appropriations bills, and will probably participate in addressing differences between the chambers' measures on labor, health and human services and education spending, according to Olson.

Federal authorities have consistently refused comment on the grand jury's criminal investigation or when it is likely to conclude.

Last week, Assistant U.S. Attorney Phillip Halpern spoke with a reporter about the civil suit. But when asked about the grand jury's work, Halpern quipped, "What grand jury investigation?"

FOX6 San Diego - New San Diego Congressional Candidate

2005-10-18T12:23:00.000-04:00

The founder of the nonprofit San Diego Aircraft Carrier Museum has joined the race for Rep. Randy "Duke" Cunningham's 50th Congressional District seat.

Alan Uke of Del Mar, a 52-year-old Republican, is the president and founder of Underwater Kinetics, a company that makes underwater lights.

He said it was too early to make a formal announcement, but his Federal Election Commission filings show he has spent $16,000 of $25,000 of his campaign money on a a poll.

Uke will be seeking to replace the embattled Cunningham, who has represented the area for seven terms.

Cunningham announced in July he would step down amid federal investigations into his financial dealings with defense contractors.

"When I saw Duke wasn't running again I thought, `What the heck,"' Uke said.

While a host of politicians expressed interest, only four have told the FEC they are raising funds to run. Their campaign statements were due last weekend.

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

2005-10-14T11:00:00.000-04:00

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.

SignOnSanDiego.com > News > Politics -- Deal lets Cunningham sell home amid inquiry

2005-10-05T09:33:00.000-04:00

By Onell R. Soto
UNION-TRIBUNE STAFF WRITER
October 5, 2005

Prosecutors and lawyers for Rep. Randy "Duke" Cunningham have reached a deal to allow the politician to sell his Rancho Santa Fe home while a federal investigation continues into whether it was bought with proceeds from a bribe.

As part of the agreement, a federal judge ordered Thursday that proceeds from the house sale – after mortgages and fees are paid – be placed in an escrow account.

So instead of fighting over whether Cunningham and his wife, Nancy, should lose the house, lawyers and prosecutors will battle over whether he should forfeit the money from its sale to the government, and how much.

Prosecutors also agreed to remove from property records a notice that the house is subject to forfeiture.

Prosecutors said in a civil forfeiture lawsuit filed in July that the Republican congressman bought the Rancho Santa Fe house in part with a bribe they said was made in the form of an overpayment for Cunningham's previous home in Del Mar Heights.

Cunningham and his wife sold the Del Mar Heights home in November 2003 for $1.675 million to Mitchell Wade, a friend who was a government contractor getting millions of dollars in business from the Pentagon.

In court papers, prosecutors called that a bribe for which Cunningham lent Wade his influence in Congress, where Cunningham sits on a subcommittee that oversees Pentagon spending and another that deals with intelligence matters.

Wade sold the Del Mar Heights home at a $700,000 loss in October 2004 even as the local real estate market was sizzling.

Cunningham denies he broke the law. His lawyers say the house was actually worth what Wade paid for it.

But in papers they filed in federal court Friday, Cunningham's lawyers argued that, at most, Wade overpaid by $300,000 and, as a result, that's all the government should be allowed to seize in the event they prove their allegations.

In April 2004, the county assessed the home's value at $1.375 million.

That assessment, based on what other houses in the neighborhood were fetching, indicated that the Cunninghams were paid more than market value for the house, David Butler, chief deputy of valuation at the assessor's office, said in an interview.

When Wade resold the house for $975,000 a year ago, the county accepted that price as an accurate fair market value, Butler said.

Cunningham's lawyers are asking Judge Dana M. Sabraw to order that just $300,000 of the sale proceeds go into the escrow account and to allow the Cunninghams to get the rest of the money.

"The Cunninghams have raised a strong argument in their favor as to the issue of what money, if any, is subject to forfeiture in this case," said Richard Barnett, a forfeiture expert.

Separately, Nancy Cunningham is seeking to keep half the proceeds of the Rancho Santa Fe house sale because prosecutors aren't accusing her of any criminal activity.

The Cunninghams recently dropped the asking price for the home to $3.15 million. They had sought $3.5 million in August.

More legal wrangling in Cunningham case North County Times - North San Diego and Southwest Riverside County News

2005-10-04T11:24:00.000-04:00

By: WILLIAM FINN BENNETT - Staff Writer

NORTH COUNTY ---- A flurry of legal activity in recent days has created a new twist in the case to prevent U.S. Rep. Randy "Duke" Cunningham from selling his Rancho Santa Fe estate and keeping the profits.

Late last week, Cunningham's attorneys asked a federal judge to deny prosecutors' request to put off a civil suit against the congressman. They also asked the judge to allow Cunningham to sell his Rancho Santa Fe estate ---- appraised at $3.3 million ---- and keep most of the proceeds.

According to a defense motion filed with the court Friday, the prosecution wants to hold off on pursuing the civil case out of concerns that civil court proceedings might reveal information that could hurt its criminal investigation of Cunningham. The eight-term congressman is being investigated by a federal grand jury on allegations of bribery, allegations which he has vigorously denied.

Cunningham, R-Escondido, is a Republican who represents North County's 50th Congressional District which covers most of North County.

Cunningham's lawyers say that by delaying the completion of the civil case, prosecutors are preventing them from getting information that could help them get that case dismissed. They also argue the delay is keeping the Cunninghams from profiting from the sale of their Rancho Santa Fe home.

The Cunninghams' legal bills are projected to be as high as $1.5 million for both cases.

A federal grand jury is investigating the 63-year-old congressman's financial ties to two defense contractors and a New York businessman. The same U.S. Attorney's office prosecutors who are pursuing that case also recently filed a civil suit against Cunningham asking the court to give the government the title to the couple's Rancho Santa Fe property. They said because the Cunninghams bought the 7,800-square-foot home with money obtained through an alleged bribe, they should have to forfeit ownership.

The government also filed a lien on the home that would have made it difficult to find a buyer and would have reduced its sale price, Cunningham's attorneys alleged. The lien does not prevent the sale of the home.

On Thursday, the court issued a proposed order that would lift the lien, allow the sale and hold the proceeds in an escrow account pending the outcome of the civil case.

On Friday, Cunningham's attorneys asked the court to let the civil case continue. They also asked the judge to allow the Cunninghams to keep most of the money from the home sale. A hearing on the matter is scheduled for Oct. 14.

Prosecutors allege that allowing the civil case to become public during court proceedings could jeopardize their successful prosecution of the secret criminal investigation.

Assistant U.S. Attorney Phillip Halpern said Monday that he would have no comment for this story.

One of Cunningham's attorneys, Washington-based K. Lee Blalack, also said he would have no comment.

"We will let the (court pleadings) speak for themselves," Blalack said Monday.

In motions filed with the court Friday, Cunningham's attorneys asked the judge to deny the U.S. Attorney's office's request to postpone the civil case.

In filing the lawsuit against Cunningham in August, prosecutors alleged that the 63-year-old congressman bought the home in part with money that he had "demanded and received" from Mitchell J. Wade, the former owner of the defense firm MZM, Inc.

Prosecutors allege that the money from the sale of a previous Cunningham home in Del Mar Heights to Wade in late 2003 ---- for $700,000 more than Wade would sell it for 11 months later, was obtained in violation of federal bribery statutes. Because of that, prosecutors have said, the proceeds from the sale of the Del Mar Heights home should be forfeited to the government.

Cunningham sold the Del Mar Heights home to Wade for $1.675 million in late 2003, and used the proceeds from that sale to help pay the $2.55 million price of the Rancho Santa Fe around the same time.

The County Assessor's office later determined that the assessed value of the Del Mar Heights home at the time of the sale was $1.375 million.

Cunningham's attorneys say that even if the government were able to prove its allegations of bribery against Cunningham, the amount government would have a claim on is much less than the assessed $3.3 million value of the Rancho Santa Fe home. His attorneys say that the government should receive no more than the $300,000 difference between the $1.675 million sale price of the Del Mar Heights home and its $1.375 million assessed value.

Contact staff writer William Finn Bennett at (760) 740-5426, or wbennett@nctimes.com

Three North County Republicans eye 74th District Assembly seat North County Times - North San Diego and Southwest Riverside County News

2005-10-03T08:41:00.000-04:00

By: WILLIAM FINN BENNETT - Staff Writer

NORTH COUNTY ---- With the 2006 primary elections more than eight months away, three North County residents are making preparations to run for the 74th District seat held by state Assemblyman Mark Wyland, an Escondido Republican whose six-year tenure will end next year because of term limits.

In recent months, Encinitas City Councilman Jerome Stocks, Escondido City Councilwoman Marie Waldron and former Reagan campaign official Martin Garrick have all filed paperwork with the San Diego County Registrar of Voters to establish fund-raising committees for the race. All are Republicans.

The 74th District covers much of North County, including the cities of Escondido, San Marcos, Vista, Carlsbad, Solana Beach, Encinitas and Del Mar.

With 101,822 registered Republicans and 63,781 registered Democrats, the district has long been considered a safe seat for the GOP. Republicans have held the seat for more than two decades.

Thus far, no Democrats have filed paperwork with the registrar's office to set up campaign finance committees ---- a move that generally leads to formal declarations of candidacy.

Real estate manager

Solana Beach resident Garrick, 52, is married and has four children. While he has never held elective office, he said Thursday that his involvement in politics and government goes back decades.

In 1966 and 1970, he said, he walked precincts for Ronald Reagan in his successful run for the governorship. And in 1980 he worked at Reagan's national campaign headquarters in the lead up to his presidential victory, said Garrick, who is the former vice chairman for the Republican Party of San Diego County.

Then, between 1981 and 1985, he worked for the office of the Secretary of Energy. He has owned and managed Solana Beach real-estate and property-management company Admiral Property Company for 15 years, Garrick said.

He said he decided to run for the state Assembly because he wants to work for change in several areas.

"As a businessman, I haven't liked the direction the state has taken as far as taxes, immigration and (the way it) is neglecting transportation and other infrastructure," Garrick said Thursday.

The self-described fiscal and social conservative touted his years of business experience and many years of working in Reagan's campaigns and administration.

Encinitas councilman

Encinitas resident Stocks was first elected to city council in 2000. The married, 48-year-old father of three children owns an insurance brokerage business.

He said that he wants to become a North County assemblyman because "I would like to help the state of California to once again become the greatest state in the greatest nation in the world."

Stocks said the key issues facing the 74th District and the state are education, highways, transportation and energy, "and of course we have to fix the border," he said.

He said that his background in city government, as a business owner and in the insurance industry make him the ideal candidate.

"Insurance is one of the most important issues facing the state of California," Stocks said.

Escondido councilwoman

Escondido resident and City Council member Waldron was first elected to council in 1998 and than again in 2002. The 45-year-old, married mother of one child has been co-owner of a small automotive apparel business in the city for the last 11 years.

She said the same thing that made her run for council is driving her to run for state office.

"As a business owner and taxpayer, I feel as though California has a tax-and-spend addiction," she said, adding that she believes the state has been very anti-business, citing its failure to adequately address the cost of workers compensation insurance.

Waldron said that as a council member, she has helped balance the city's budget. As a member of the state Assembly, she would do the same, she added.

"What they need to do is just stop the spending; they just keep growing the bureaucracy and they need to cut it," Waldron said. "I have a proven record of standing up to fight taxes and will bring a local government perspective (to the office)."

Now that Wyland's incumbency in the state Assembly is approaching its end, he has said that he is giving serious consideration to running for the Republican nomination to fill the 50th Congressional District seat now held by eight-term Rep. Randy "Duke" Cunningham, R-Escondido.

Cunningham, 63, is facing an ongoing grand jury investigation into his financial ties to two defense contractors and a New York businessman. In June, the former Navy ace pilot announced that he would not seek re-election in 2006, citing the growing stress the investigation was having on his family.

Bradenton Herald | 09/24/2005 | Federal probe grows

2005-09-24T10:32:00.000-04:00

CHARLES R. BABCOCK

The Washington Post

WASHINGTON - Federal authorities have executed search warrants on a Long Island, N.Y., businessman who is a longtime friend of Rep. Randy "Duke" Cunningham, R-Calif. - an apparent sign that prosecutors are widening their criminal investigation of the veteran House member.

Agents from the FBI, the Internal Revenue Service and the Defense Criminal Investigative Service executed the search warrants Thursday, Special Agent Jan Caldwell of the FBI office in San Diego said in a statement. The statement did not say whose property was searched, but sources said it belonged to Thomas T. Kontogiannis of Glen Head, N.Y.

Kontogiannis said in interviews in July that he has known Cunningham for years and bought the congressman's 65-foot yacht, the Kelly C, for $600,000 in 2002 before spending an additional $100,000 fixing it up. He also helped the congressman obtain a second mortgage on a new home in Rancho Santa Fe, Calif., in 2003, he said.

A federal grand jury in San Diego has been investigating Cunningham since newspapers there reported in June that a Washington defense contractor, Mitchell J. Wade, had apparently done financial favors for the congressman. Wade allegedly bought Cunningham's house at an inflated price and allowed the congressman to live rent-free on Wade's 42-foot yacht, the Duke-Stir. In civil court papers, prosecutors have characterized the home sale as a violation of the federal bribery statute. No criminal charges have been filed.

Cunningham has denied wrongdoing. He has announced that he will not seek reelection to Congress next year.

On July 1, authorities searched Wade's Washington-based business, home and boat as well as Cunningham's home in Rancho Santa Fe.

In August, federal agents searched the home and office of Brent Wilkes of San Diego, another defense contractor. A Pentagon official recalled Wilkes and Cunningham calling him to seek release of funds appropriated for a program Wilkes's company was seeking.

The Washington Post reported later that month that Cunningham had written to a prosecutor in Queens, N.Y., inquiring about Kontogiannis in 2000, when the businessman was under investigation for allegedly bribery.

North County Times - FEC approves Cunningham request

2005-09-23T11:13:00.000-04:00

By: North County Times

The five-member Federal Election Commission voted as expected Thursday and approved U.S. Rep. Randy "Duke" Cunningham's request that he be allowed to use campaign funds to pay his lawyers.

The commission action clears the way for Cunningham, R-Escondido, to use more than $650,000 in his campaign account to pay the legal bill he is incurring as he defends himself in the face of an ongoing federal grand jury investigation.

Meeting in San Diego since June, the grand jury is probing the eight-term lawmaker's business dealings with two defense contractors.

The U.S. attorney's office has alleged in a civil suit related to the investigation that Cunningham "demanded and received" a bribe from one of the contractors, Mitchell J. Wade, in connection with a home Wade purchased from the congressman in late 2003.

Wade paid $700,000 more for the home than he would sell it for less than a year later.

Cunningham, who will not seek re-election next year, has denied breaking any laws.

Last week, the U.S. House of Representatives Committee on Standards of Official Conduct also approved Cunningham's request to establish a legal defense fund separate from the campaign account.

That fund allows contributions of up to $5,000 a year from individuals, corporations and unions. A Cunningham aide has said legal fees could reach or exceed $1.5 million.

SignOnSanDiego.com > News > North County -- Carlsbad won't bill legislator over forum

2005-09-21T11:28:00.000-04:00

CARLSBAD – The City Council decided not to send a bill to state Sen. Bill Morrow for police protection the city provided for an immigration forum he staged in the city last month.

The Carlsbad Police Department has estimated it cost the city $62,072 to patrol the event, titled "Illegal Immigration Crisis," held Aug. 11 at the Carlsbad Community Cultural Arts Center at Carlsbad High School.

Mayor Bud Lewis has criticized Morrow, a fellow Republican, for the event, calling the gathering "a political gimmick to get his (congressional) campaign going."

Morrow is running for the Republican nomination for the 50th Congressional District seat being vacated by Rep. Randy "Duke" Cunningham, a Rancho Santa Fe Republican under investigation for possibly soliciting a bribe from a defense contractor.

Councilman Mark Packard said he agreed that the event may have served as a political rally for the senator, but he was uncomfortable billing a candidate or elected official for expressing a point of view. He said he feared that groups who disagreed with the candidate or official could then assemble, creating a possible security problem.

"Does that mean a candidate for political office would have to pay $60,000 to speak?" Packard asked.

Packard was joined by council members Matt Hall and Norine Sigafoose, who said they did not feel the city could collect on such a bill if it sent one, felt there was little to gain.

Besides, Hall observed, "Mr. Morrow may be our next congressman and we may have to work together for many years."

Seeing that a council majority did not support his position, Lewis did not move to send Morrow a bill, and the issue was dropped.

Councilwoman Ann Kulchin said she supported the mayor, but was uncertain of the amount the city should bill Morrow. She said groups throughout the city routinely paid for extra security when they staged special events.

Lewis said he proposed sending a bill of about $300,000 to the senator, saying that was the amount it cost all participating public agencies to provide security. He called Morrow a "clever politician."

Lewis said he believed the issue was not about free speech, but fairness, and the city and other agencies should not be stuck with the tab.

More than 400 opponents of illegal immigration were inside the auditorium Aug. 11, and an overflow of 250 others who wanted to attend faced off about 125 protesters outside.

There was an emotional verbal exchange between the two groups but no fighting.

A police report said the city directed 68 officers and other city employees to the event and called in a dozen officers on their day off.

About 314 personnel from other agencies, including the Sheriff's Department, also were involved in the security effort, the report said.

Morrow, of Oceanside, has said the mayor was wrong in his contention that the meeting was a political rally masquerading as an immigration forum. He said the event was planned long before he considered running for Congress.

Morrow also has said that if the city plans to charge for such events, "(it) should be perfunctory in nature and should never be prohibitive."

Dateline Alabama | FEC: Cunningham may use campaign money for legal fees

2005-09-19T19:40:00.000-04:00

The Associated Press

Rep. Randy "Duke" Cunningham may use campaign money to pay his legal fees in a federal bribery investigation, Federal Election Commission staff said Monday.

FEC staff reached the conclusion in a draft advisory opinion that the commission will vote on Thursday. Cunningham, R-Rancho Santa Fe, had requested the commission's advice on whether such use of money in his campaign re-election account was permissible.

The money may be used for legal fees, the draft opinion says, "because the investigation concerns allegations that are directly related to Rep. Cunningham's campaign activities or his duties as a federal officeholder."

Cunningham had more than $650,000 in his main campaign account as of June 30, the end of the most recent reporting period. His campaign has given donors the option of having their checks sent to the National Republican Congressional Committee instead of being used for his legal defense.

A federal grand jury is investigating whether defense contractor Mitchell Wade bribed Cunningham by buying his Del Mar, Calif., home at an inflated price. At around the same time as the house sale, Wade's firm, MZM Inc., was winning valuable defense contracts. Cunningham sits on the House Appropriations subcommittee that controls defense dollars.

Cunningham has announced he won't seek re-election next year but has said he did nothing illegal.

Last week, Cunningham was separately given permission by the House Ethics Committee to set up a different legal defense fund that could accept donations directly.

SignOnSanDiego > News > North County > Logan Jenkins -- Duke's attorney tries to sell fuzzy math

2005-09-17T11:41:00.000-04:00

A brick – the Bull Market award – to Rep. Randy "Duke" Cunningham's legal team, attorneys who may possess astute legal minds but, when it comes to real estate values, they're crooning loony tunes.

In the most recent display of wishful property assessments, Mark Holscher, Cunningham's attorney, argued in federal court that the government should pay Cunningham, the Republican congressman representing the 50th District, $800,000 to make up for the difference between what Cunningham's Rancho Santa Fe house is worth and what he has been offered for it.

To back up a bit, Cunningham and his wife bought the house in early 2004 for $2.55 million after selling their Del Mar Heights home for $1.675 million to a defense contractor. Now that the congressman is being investigated for corruption, the house has been put on the market. In the meantime, prosecutors have issued a seizure warning, alerting potential buyers that the house is subject to forfeiture.

In a court hearing, Holscher insisted that Cunningham's Rancho Santa Fe house is now worth at least $3.3 million, a $750,000 spike in 20 months. That's a 35 percent appreciation (as the real-estate market has begun to cool off).

Now compare that fantasy with this one: Holscher told Judge Dana Sabraw that he could prove that the Del Mar Heights home was worth $1.67 million when Cunningham sold it to Mitchell Wade, the defense contractor who, it's alleged in the seizure order, bribed Cunningham with an inflated sale price.

When Wade sold the house almost nine months later, he took a $700,000 bath despite the then-sizzling market. Holscher credits this disparity to the fact that Wade was in a hurry to sell and that the house was unoccupied, unkempt and in bad condition, presumably because Cunningham left it that way.

It appears that the first rule of real estate is that Duke always comes out looking like a bandit.

A brick – the Public Trough award – to the Escondido City Council, which approved (in a 3-2 vote) a 30 percent salary increase.

This self-feeding wouldn't be so galling – council salaries hadn't been raised since 2000 – if it weren't for last year's unpublicized hike in the council car allowance to $750 per month, up from $450. This is a car allowance that might suit a salesman – $25 per day – but not a local politician.

Let's ask a simpleton's question: Why can't the council members be reimbursed for miles actually driven in their own cars, like any other business?

Councilman Ron Newman and Councilwoman Marie Waldron deserve bouquets for voting against the raise. Waldron, it should be noted, may have had an ulterior motive. She's running for the Assembly next year as a fiscal conservative and probably wouldn't want to see a vote in favor of a raise featured on a hit piece by a rival candidate.

A bouquet – the Long Brush Stroke award – to Oceanside muralist Clayton Parker for completing what may be the longest single-artist mural in the world.

First conceived three years ago for Vista's downtown, Parker endured two years of bureaucratic red tape and a serious skin disease before finally completing the historic scenes of local people and places.

While honoring this feat, paid for largely through donations by residents, I should throw a brick – the Snob Appeal award – to myself.

Three years ago, I sneered in this space that the project was bound to be cheesy and cartoonish if cash donations determined the subjects.

Well, I was wrong. By all accounts, the mural artfully reflects the city's spirit. Well done.

A brick – the Registering the Bogeyman award – to the Oceanside City Council for some petty lawmaking for the express purpose of bringing one lobbyist to heel.

An argument can be made for keeping track of paid operatives who try to influence city government on behalf of clients. But the reality is, the number is going to be small except in large jurisdictions such as the county and the city of San Diego, both of which register lobbyists.

In Oceanside, the catalyst for this ordinance is no mystery. The council majority – Mayor Jim Wood and Councilwomen Esther Sanchez and Shari Mackin – bear a special malice for Jack Orr, a political consultant with a long history in North County. Sanchez said she wants the ordinance to cover "anyone who looks like Jack Orr."

Before it goes ahead and enacts an ordinance, the council should keep two things in mind.

First, lobbying comes in many forms from many sources. It's not fair to limit registration to those representing developers and not include those who get paid to represent environmental groups and nonprofits.

Second, if Orr and a few others, such as former Councilwoman Colleen O'Harra, are the only registered lobbyists, the city is creating a prime vehicle for them to advertise their services. For a nominal fee and a bit of paperwork, the bogeymen may actually be listed on the city's Web site.

Cunningham gets OK for legal defense fund North County Times - North San Diego and Southwest Riverside County News

2005-09-16T08:40:00.000-04:00

By: MARK WALKER - Staff Writer

Supporters of U.S. Rep. Randy "Duke" Cunningham can now underwrite their belief in the embattled congressman by contributing to a legal defense fund.

The House of Representatives Committee on Standards of Official Conduct notified Cunningham's attorneys Thursday that it had granted his request to set up the fund to help pay mounting legal bills from an ongoing federal grand jury investigation.

The fund is separate from Cunningham's pending request before the Federal Election Commission that he be allowed to use money in a campaign account to pay a legal tab that his chief of staff, Harmony Allen, has said could easily reach $1.5 million.

Under House rules, legal defense funds are established as a trust and overseen by a trustee required to file quarterly reports with the Office of the House Clerk. Once established, corporations, labor unions and individuals can donate up to $5,000 per year.

"According to your letter, the Trust has become necessary because of legal expenses arising in connection with a grand jury investigation that concerns your official duties and bears on your reputation and fitness for office," read a letter to the 50th Congressional District representative signed by Committee Chairman Rep. Doc Hastings, R-Wash. "The Committee hereby approves the Trust."

Kenneth Batson, who has served as Cunningham's longtime campaign treasurer, will act as trustee of the fund, officially known as the Randall Cunningham Legal Expense Trust.

In addition to filing quarterly reports, any contribution of more than $305 in a 12-month period also must be reported by Cunningham in the annual financial disclosure statement required of every member of Congress.

K. Lee Blalack, the lead attorney representing Cunningham, said Thursday that Cunningham was happy with the ruling of the ethics committee.

"Duke appreciates the committee's prompt review of his request and is pleased by its decision," he said.

Cunningham joins House Majority Leader Tom DeLay, R-Texas, and a handful of other members of Congress who have defense funds. DeLay is battling ethics charges related to his dealings with a lobbyist.

Cunningham, R-Escondido, is being investigated by federal authorities over his dealings with two defense contractors, ADCS of Poway and MZM Inc. of Washington, D.C.

Both have been significant financial contributors to his past campaigns and both have benefitted from Defense Department contracts in recent years. Cunningham is a member of the House Appropriations Committee and its Defense Subcommittee.

MZM and ADCS officials have said they are cooperating with the investigation, an inquiry being led by the U.S. attorney's office in San Diego with field work being conducted by agents from the FBI, IRS and the Pentagon's Defense Criminal Investigative Service.

Last month, government prosecutors alleged in a civil suit related to the investigation that Cunningham had "demanded and received" a bribe from MZM founder Mitchell Wade.

They allege that when Wade purchased Cunningham's home in Del Mar Heights in late 2003 for $1.675 million, he paid well in excess of the true market value. Wade sold the home 11 months after purchasing it for $700,000 less than what he paid Cunningham and his wife, Nancy.

That transaction amounted to a financial gain for the 63-year-old Cunningham that violated bribery and corruption statutes, the government attorneys allege.

Wade, who also provided a boat that Cunningham lived aboard for more than a year while in Washington, has declined to comment.

Cunningham has denied any wrongdoing and said he expects to be exonerated. The probe led to the congressman's decision not to seek re-election.

The civil suit seeks to block the Cunninghams from taking the proceeds of their planned sale of an estate home they bought in Rancho Santa Fe in 2004 following the sale of the Del Mar Heights home. That property, purchased for $2.5 million, is for sale for $3.5 million.

Government attorneys and the Cunninghams are close to a deal that will allow the home sale to go forward with the money placed in an escrow account until resolution of the criminal investigation, a source close to the investigation said Thursday.

In June, Cunningham hired the Washington-based law firm O'Melveny & Myers. His legal team is headed by Blalack in Washington and by Mark Holscher, a former assistant U.S. attorney who works out of the firm's offices in Los Angeles.

Blalack, a former chief counsel to the U.S. Senate's Permanent Subcommittee on Investigations and a cable television news commentator, has refused to say what his firm is charging the congressman, whose district includes most of North County.

The granting of Cunningham's request for a legal defense fund was met with consternation in the Washington offices of the watchdog group Citizens for Responsibility and Ethics in Washington.

Melanie Sloan, the group's executive director, said that while she wasn't surprised at the development, she objects to defense funds on principle.

"But no member of the House or Senate would ever vote against them not knowing when they might need one themselves," Sloan said.

Cunningham also is seeking Federal Election Commission approval to use about $670,000 in his campaign account to pay his legal bills. The campaign stopped accepting any new contributions in mid-July when Cunningham announced he would leave Congress next year.

The commission, which is expected to rule on that request within the next three weeks, has generally allowed members of Congress facing legal troubles to use campaign funds to pay their lawyers. House members earn an annual salary of $162,500.

Sloan's group has opposed that request, arguing in a letter to the commission that because Cunningham has not 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. It seems unlikely, however that at least some of the potential charges will not involve such activity."

KESQ NewsChannel 3 Palm Springs, CA: Judge declines to lift notice on congressman's SD County home

2005-09-09T21:00:00.000-04:00

SAN DIEGO A federal judge declined today to lift a legal notice that an attorney for Representative Randy "Duke" Cunningham said was preventing the congressman's San Diego area mansion from selling at its three-point-five (m) million dollar list price.

Attorney Mark Holscher said the sale has been held up by the U.S. Attorney's office in San Diego, which is seeking to forfeit the five-bedroom, eight-bath Spanish colonial estate in exclusive Rancho Santa Fe. Criminal prosecutors investigating Cunningham contend he bought the home in 2003 with the help of a one-point-four (m) million dollar bribe he allegedly "demanded and received" from a defense contractor.

U-S District Judge Dana M. Sabraw agreed the legal notice filed by prosecutors with the San Diego County Recorder's office was hurting the property value and perhaps the chances for a sale. But the judge told attorneys for both sides to work out a settlement in the next few days.

Cunningham said in July that he intended to sell his home and donate a portion of the proceeds to charity. The San Diego-area Republican also announced that he would not seek a ninth term in office, although he insisted he was guilty only of "poor judgment."

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

LOCAL 8 :: KFMB Stations, San Diego, California | Cunningham's Lawyers Say Home Seizure Illegal

2005-09-07T17:15:00.000-04:00

Last Updated:
09-07-05 at 12:49PM

Lawyers for Rep. Randy "Duke" Cunningham are claiming that the federal government acted illegally in trying to seize a Rancho Santa Fe home that the congressman is trying to sell.

Cunningham is being investigated for the sale of a Del Mar home to a Washington, D.C. defense contractor that was well above market price. Federal prosecutors claim the dealings amount to bribery.

According to the North County Times, Cunningham used proceeds from that sale to purchase a home in Rancho Santa Fe, which is now listed at $3.5 million.

The congressman's lawyers claim U.S. attorneys in San Diego violated the law when they filed a lis pendens – a notice that the government had filed a civil suit against the property, then sealed and didn't serve Cunningham with notice of the suit, according to the paper.

Cunningham's lawyers say the government's actions have led to a number of 'low-ball' offers to buy the property.

Cunninghams contend due process violated North County Times - North San Diego and Southwest Riverside County News

2005-09-07T10:01:00.000-04:00

SAN DIEGO ---- U.S. Rep. Randy "Duke" Cunningham and his wife contend that the federal government violated their due process rights by moving to block the sale of their Rancho Santa Fe estate and are asking for monetary damages.

The couple also argue that the action to block and eventually move to seize the proceeds of a sale has resulted in "low-ball" offers far below the $3.5 million they are seeking for the property.

In July, the government attempted to block the sale by filing what was initially a secret notice of its interest in the property. U.S. attorneys contend that Cunningham, R-Escondido, bought the home in part with money obtained in violation of bribery statutes.

A federal grand jury seated in San Diego began investigating the 63-year-old lawmaker's dealings with a defense contractor, Mitchell Wade and the Washington-based company that Wade founded, MZM Inc., in June.

In pleadings filed Tuesday in the government's civil case seeking forfeiture of the home, Cunningham's attorneys argue that the government's action was a clear violation of federal law.

They contend U.S. attorneys in San Diego violated the law when they filed a lis pendens, a notice that the government had filed a civil suit against the property, and then sealed and never served the couple with notice of the suit.

As a result, the Cunninghams are asking a judge to "remedy the government's knowing violation of their due process right by awarding monetary damages as well reasonable attorneys' fees and costs," the attorneys state. The amount being sought was not specified.

The U.S. attorneys handling the case could not be reached for comment late Tuesday afternoon.

The grand jury probe and civil case they are in charge of stems from Wade's purchase in late 2003 of the Cunninghams' former residence in Del Mar Heights for $700,000 more than he would sell the property for 11 months later. MZM saw its government contracts soar around the time of the home sale.

When the U.S. attorney voluntarily unsealed the civil suit against the couple's Rancho Santa Fe home two weeks ago, the document revealed that federal prosecutors are alleging Cunningham "demanded and received" the inflated payment from Wade in violation of bribery laws.

Cunningham has denied any wrongdoing. Attorneys for Wade have consistently refused comment.

A second defense contractor, ADCS of Poway, was swept up in the criminal investigation last month when its offices were raided by federal agents. ADCS has denied any impropriety and says it is cooperating with the government.

The raid at ADCS was similar to the one that agents had conducted at Cunningham's home in July. At the same time Cunningham's home was being searched, agents in Washington, D.C., also were searching Wade's home, MZM's offices and a 42-foot boat owned by Wade, a boat that Cunningham had lived on for more than a year.

On July 14, Cunningham announced he would not seek re-election and that he and his wife would sell the Rancho Santa Fe home and donate a portion of the proceeds to three local charities.

The gated home was listed for $3.5 million last month, nearly $1 million more than the couple paid for it in 2004, a purchase made in part with the proceeds from the Del Mar Heights sale to Wade.

In their pleadings, Cunningham attorneys Mark Holscher, Kristina Hersey and K. Lee Blalack argue that because the government failed to serve the couple with notice of the intent to block the home sale, the civil case should be tossed out.

"By use of this unlawful ---- and, indeed, unprecedented ---- tactic, the government successfully restrained the sale of the Cunninghams' home" and left them with no chance to "contest those allegations on the merits," the attorneys argue.

The couple also want a judge to approve a plan that would allow them to sell the home. They ask the sale be allowed to proceed and that the net proceeds, minus an undisclosed outstanding balance on the deed of trust for the home, be held in escrow until the conclusion of the government's investigation.

Included in Tuesday's filing was a letter from an attorney for the company listing the Cunninghams' home. The letter states that the government's actions against the property have resulted in offers of about $2.5 million.

Peter Lewi, attorney for The Sterling Real Estate Co., writes: "These 'low-ball' expressions of interest are in my opinion clearly based on a perceived lower value of the property based on the existence of the lis pendens. Beyond the impact on price, the lis pendens is likely to preclude any transaction from coming together at any price."

The first court hearing in the civil forfeiture case is set for 1:30 p.m. Friday afternoon before U.S. District Court Judge Dana Sabraw in San Diego.

Contact staff writer Mark Walker at (760) 740-3529 or mlwalker@nctimes.com.

Most donors OK with Cunningham using money for defense costs North County Times - North San Diego and Southwest Riverside County News

2005-09-01T10:21:00.000-04:00

By: MARK WALKER - Staff Writer

Only 33 of more than 700 contributors to what was to have been U.S. Rep. Randy "Duke" Cunningham's re-election bid don't want him to spend their money on attorney fees, the congressman's campaign treasurer told the Federal Election Commission this week.

Cunningham, R-Escondido, is the subject of a federal grand jury investigation into his dealings with at least two defense contractors, MZM Inc. of Washington, D.C., and ADCS of Poway.

In a letter to the commission that governs campaign fund raising and spending, Friends of Duke Cunningham treasurer Kenneth Batson also said that many of the contributors have sent messages supporting the congressman's use of their money on his defense.

The campaign committee has asked the commission to allow Cunningham to spend the more than $672,000 in his campaign account on his attorney fees, which one of his top aides has said could reach $1.5 million. The commission is expected to rule on the request later this month or in early October.

Batson's letter was sent to the commission Tuesday as a follow-up to an earlier request for a ruling that would OK using the account to pay legal bills.

Last week, the government unsealed a civil forfeiture suit seeking to stop the announced sale of Cunningham's Rancho Santa Fe home, contending some of the $2.55 million he paid for it in early 2004 was obtained through a bribe Cunningham "demanded and received" from Mitchell J. Wade, founder of MZM.

Attorneys for Wade, who purchased the Del Mar Heights home that Cunningham lived in before buying the Rancho Santa Fe home, have refused to comment on that allegation. Wade paid Cunningham $700,000 more for the Del Mar Heights home than he would sell it for 11 months later.

Cunningham, 63, has denied any wrongdoing but announced in July that he would not seek re-election to another term representing the 50th Congressional District that covers most of North County.

Batson was away from the area Wednesday and could not be reached for comment.

In his letter to the FEC, he opposes a request from Citizens for Responsibility and Ethics in Washington asking the commission to postpone a ruling until the grand jury has finished its work.

Batson argues that the commission has previously allowed use of campaign funds to pay for legal costs while investigations are under way and writes that Cunningham has "already incurred substantial legal expenses in connection with both accommodating requests from the grand jury and responding to media allegations and attention surrounding the investigation."

K. Lee Blalack, Cunningham's lead attorney, declined comment Wednesday.

Attached to Batson's letter are nine hand-written messages praising Cunningham's work in Congress and wishing him well, examples that typify the response to the request to use their money to pay the lawyers, Batson wrote.

The 33 people who do not want their money spent on his legal fees will instead have their donations given to the National Republican Congressional Committee.

SignOnSanDiego.com > News > Politics -- Cunningham case a view into political pork process

2005-08-31T13:08:00.000-04:00

By Marcus Stern and Jerry Kammer
COPLEY NEWS SERVICE
August 31, 2005

WASHINGTON – When Rep. Randy "Duke" Cunningham first responded to questions about his dealings with defense contractor Mitchell Wade, he stressed that his position on the House defense appropriations subcommittee did not enable him to secure contracts for Wade's company, MZM Inc.

"I do not have the authority or ability to award a contract to Mr. Wade's company and no single member of Congress, no matter how influential, can dictate to the armed services who will be awarded contracts," the Rancho Santa Fe Republican said during a June 23 news conference.

While Cunningham's claim is technically correct under the government's doctrine of separation of powers, it doesn't reflect the reality that many members of Congress, especially members of appropriations committees, have a great deal of say over how funds are allocated.

A federal grand jury in San Diego is probing Cunningham's dealings with Wade after disclosures that Wade bought and sold Cunningham's Del Mar home at a $700,000 loss and allowed Cunningham to live aboard his yacht in Washington. Wade has since resigned as head of MZM, and the company is in the process of being sold to a New York-based equity firm.

Since receiving its first federal contract in 2002, Washington-based MZM has collected more than $163 million in government contracts.

Cunningham's dealings with another defense contractor – Brent Wilkes, president of Poway-based ADCS Inc. – have also come under scrutiny. On Aug. 16, agents from the FBI, Internal Revenue Service and Defense Department raided the company's headquarters. Agents were seeking records pertaining to government contracts secured by ADCS, particularly deals related to the House defense appropriations subcommittee, according to sources familiar with the investigation.

The raid came seven weeks after a similar raid on MZM.

Like MZM, ADCS won millions of dollars of government contracts while making significant campaign donations to Cunningham and other members of the House defense appropriations subcommittee. The subcommittee repeatedly penciled in funding for projects involving the company, even though the Pentagon had not requested the money.

Cunningham's possible abuse of his clout has opened a window on the congressional appropriations process, giving the public a rare glimpse at the growing premium that contractors place on obtaining influence on Capitol Hill.

Cunningham's seats on the defense appropriations subcommittee and the House Permanent Select Committee on Intelligence give him influence over the kinds of military-intelligence contracts MZM has been seeking, said Nathan Facey, a former aide to Rep. Marcy Kaptur, D-Ohio, a senior member of the House Appropriations Committee.

"It's one-stop shopping," Facey said of Cunningham's potential usefulness to Wade. "He can get an earmark lined up in the intelligence committee, and then he can walk it over to appropriations and say, 'It's classified, so I can't talk about it, but it's a good program.' "

Earmarks are relatively small provisions that members of Congress insert into a bill to fund specific programs that often benefit their districts or supporters. They typically write them cryptically to obscure the lawmaker and the beneficiary.

Wade poured $272,426 into the political process in the past five years, with the help of political action committees, employees and friends, according to data provided by the Center for Responsive Politics. Wilkes orchestrated $499,200 in contributions during the same period, according to the center's data.

"They know the process," Rep. Jeff Flake, R-Ariz., said of contractors. "They come in and say, 'This is what we need, so can you ask for this? Can you write a letter to the appropriators?' It's really pernicious because once you get an earmark in a bill, you're going to support the bill, or your earmark is removed. . . . Members are getting hooked on earmarks quickly. They are led to believe that that is the way you get re-elected."

News accounts contribute to the problem, said Jacques Gansler, former undersecretary of defense for acquisition, technology and logistics.

"The problem with pork is that in the local press it's always viewed as a plus. It's 'Congressman Jones just got us a $20 million project and isn't that wonderful' – even though the executive branch didn't ask for it and it's not necessarily a priority in terms of the nation's interest."

Pork-barreling has always been a feature of the federal budget process, but as the budget has expanded in recent decades, so has the pork. The mounting pressure on lawmakers to raise large sums of money for campaigns has further accelerated the trend. In the past decade, the process has become more ingrained and efficiently managed, and has spread to parts of the budget previously untouched.

In 1998, the 2,000 earmarks in all 13 appropriations bills had an overall value of $10.6 billion, said Keith Ashdown of Taxpayers for Common Sense. By 2004, the numbers had reached 15,584 earmarks worth $32.7 billion.

Rep. Virgil Goode, R-Va., a member of the House Appropriations Committee, has been another target of Wade's political contributions. MZM has given $87,476 to Goode, mostly in the form of individual contributions from employees.

Goode was instrumental in getting funding beginning this year for a new program awarded to MZM – the Foreign Supplier Assessment Center.

The program, created to monitor the participation of foreign companies in U.S. defense programs, is based in Martinsville, Va., which is in Goode's district. When MZM increased its presence there, Goode touted the jobs the move would bring to the rural community in southern Virginia.

Goode grew testy in an interview when asked why he sought the provision even though the Pentagon didn't want it.

"I've probably put in 30 or 35 requests over the last five or six years," he said, including some affecting other agencies. "And the Defense Department hasn't come by on a single one and asked me to put it in."

In March, Wade hosted a fundraiser for Goode at MZM's headquarters. Employees queued up to hand over more than $50,000 in contributions.

"It was just like any other fundraiser," Goode said. "Stuff to eat, stuff to drink. They had hors d'oeuvres. I made a talk about the importance of our military and having them supplied with good information. It was a pro-defense talk."

Asked if he thought Wade intended the contributions as a reward for Goode's support in pushing through the Foreign Supplier Assessment Center over Pentagon objections, Goode said, "I can't read his mind. But my support for MZM stems from the fact that they had a large presence in the district."

Winslow Wheeler, a former Senate staff member and frequent critic of the appropriations process, looks ruefully at the proliferation of pork.

"In the mid-'70s, a defense appropriations bill, conference report and the statement of managers would be 30 pages and the bill 30 pages, so the entire document was about 60 pages," he said. "Each pork item would get about a paragraph and there might be 100 or 150 of those items.

"Today, you're talking about a document that is 200 to 250 pages." You find so many earmarks that "if they did a paragraph on each one, we'd be talking about a real tree killer."

Cunningham's suggestion that he could not significantly influence the outcome of relatively small military-intelligence contracts worth a few million dollars, doesn't square with reality, Wheeler said.

"If he did line-items in committee reports or conference reports for MZM, he understands perfectly well that he required the Department of Defense to do exactly that or there would be hell to pay," Wheeler said.

The kind of payback a spurned lawmaker can deal the military was amply illustrated by former Rep. Charlie Wilson, D-Texas, who used his position on the defense appropriations subcommittee during the 1980s to steer billions of defense dollars covertly to help Afghan fighters dislodge Soviet forces from Afghanistan.

"We would have never won the war if it hadn't been for earmarking because the (CIA) would have never spent the money the way we wanted it to," Wilson said in a recent interview. "There are three branches of the government and you have to explain that to the executive branch every once in a while and earmarking is the best way to do that."

He recalled one such lesson from the 1980s.

Wilson had talked his girlfriend out of a trip to Paris to accompany him to Pakistan. A U.S. spy plane was supposed to fly them from one end of Pakistan to the other.

However, an Air Force colonel working for the Defense Intelligence Agency refused to transport Wilson's girlfriend on the spy plane, saying it was against the rules. Wilson got even with the Defense Intelligence Agency in the next appropriations bill.

"I just removed two planes from their inventory," he said. "The Louisiana National Guard was very glad to get them."

Cunningham now says he won't release payment records North County Times - North San Diego and Southwest Riverside County News

2005-08-31T10:12:00.000-04:00

By: MARK WALKER - Staff Writer

U.S. Rep. Randy "Duke" Cunningham no longer plans the immediate release of financial records the congressman said would prove he paid more than $13,000 to stay aboard a defense contractor's boat for more than a year.

In a June 23 statement, Cunningham wrote that his attorneys were assembling the payment information for his time on contractor Mitchell Wade's boat, the "Duke-Stir," and would release it once compiled.

The U.S. Attorney's office is leading a grand jury investigation into the relationship between the congressman and the contractor. Last week, the government unsealed a civil suit alleging that Cunningham "demanded and received" a bribe from Wade in a 2003 real estate transaction unrelated to Cunningham's liveaboard arrangement.

In his June statement, Cunningham, R-Escondido, wrote that he had paid "well over" $8,000 in dock fees and "well over" $5,000 for service and maintenance in lieu of traditional rent during the 14 months he lived on the 42-foot vessel.

The promise to make those records public in a timely manner is included in a "Personal Statement from Congressman Cunningham" that has remained posted on his congressional Web site since it was issued.

Attorney K. Lee Blalack said this week that while the 50th Congressional District lawmaker still intended to disclose the payment information, it will be kept under wraps for now.

"The congressman will release those records at the conclusion of the grand jury investigation, which we hope will be soon," Blalack said. "At the time he issued the statement, we were not, to the best of our knowledge, the subject of a grand jury investigation and that weighs heavily."

In the June statement, however, Cunningham did know he was the subject of some kind of investigation, writing he was aware "there is now a legal inquiry under way."

Last week, the U.S. attorney's office in San Diego leading the grand jury investigation unsealed a real estate forfeiture suit filed against Cunningham that contains the criminal bribery allegation.

The civil suit seeks to stop Cunningham from selling a Rancho Santa Fe estate-style home that he and his wife, Nancy Cunningham, purchased for $2.5 million following the sale of the Del Mar Heights residence. That home is now for sale for $3.5 million.

The suit contends Cunningham bought the Rancho Santa Fe property with funds obtained from Wade in violation of federal bribery statutes.

In late 2003, Wade purchased the lawmaker's Del Mar Heights home for a price that was $700,000 more than Wade sold it for less than a year later, without ever having lived in or used the home.

According to the government's civil suit, Wade paid "an amount far greater than its true fair market value," a payment allegedly made in return for Cunningham's "being influenced in the performance of his official duties."

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

Wade is the founder and former sole owner of MZM Inc., a Washington, D.C., defense firm that since 2002 has seen the value of its Pentagon contracts swell to more than $160 million. MZM was recently sold to a New York investment firm, which plans to transform the company into a new defense firm.

Cunningham has described Wade as a personal friend. In his June statement, he wrote that he started staying aboard Wade's boat April 2004, using the vessel as his residence when he was in Washington.

He wrote that he and Wade agreed that rather than paying rent, Cunningham would be responsible for monthly dock fees and boat maintenance costs.

The 63-old-lawmaker, who announced in July he would not seek re-election next year, stopped living aboard the boat following the first published report of his real estate dealings with Wade.

Cunningham has denied any wrongdoing, writing in June that he "welcomed any and all appropriate investigations" and predicted the outcome would "confirm that I have acted honestly."

A hearing on the civil suit is set for Sept. 9 before U.S. District Judge Dana Sabraw in San Diego. The original complaint seeking forfeiture of the property to the government was filed July 21. It had been kept secret under court order until U.S. attorneys voluntarily unsealed it last week.

Federal government discloses interest in congressman's home - Yahoo! News

2005-08-27T10:03:00.000-04:00

SAN DIEGO (AP) -- The federal government said for the first time in court that it is seeking to seize a California congressman's home because prosecutors believe it was purchased with ill-gotten gains.

The charge, disclosed Thursday in an amendment to a complaint that was previously filed secretly, said Rep. Randy "Duke" Cunningham, R-Calif., sold his previous home at an inflated price to a defense contractor whose company was seeking federal contracts. Cunningham then used the money from that sale to buy his current home for $2.55 million, according to the complaint.

"Cunningham demanded and received this money in return for being influenced in the performance of his official acts as a public official," according to the complaint, filed in federal court in San Diego.

Cunningham's attorneys have sought to either unseal the earlier complaint or force the government to lift a notice filed last month with the San Diego County recorder's office that indicates the government's interest in the property.

Lee Blalack, an attorney for Cunningham, called the amended complaint a "public relations exercise."

"In this country, it is illegal to take someone's property simply on the say-so of the government and we intend to show that this complaint is false," he said in a statement. "Duke Cunningham strongly denies these allegations and we will contest them in court as soon as the judge permits us to do so."

A hearing is scheduled Sept. 9.

The eight-term congressman said last month he would not seek re-election. He conceded showing "poor judgment" in the way he handled the sale of his home, but insisted he did nothing illegal.

In 2003, Cunningham sold a 3,826-square-foot house in the north San Diego suburb of Del Mar to Mitchell Wade, who took a $700,000 loss when he resold it a year later. During that span, home prices in San Diego County rose an average of nearly 25 percent.

At the same time, Wade's company, MZM Inc., was increasing its federal contracting business.

After selling the home, Cunningham bought a five-bedroom home in exclusive Rancho Santa Fe for $2.55 million. According to the complaint, he gained $1.4 million from selling the Del Mar home to Wade and drew on it for an initial payment.

Cunningham listed the Rancho Sante Fe home this month for $3.5 million.

The amended complaint repeats information that has previously been widely reported. It avoids other controversies that have dogged the congressman, including his living rent-free on Wade's 42-foot yacht in Washington.

SignOnSanDiego.com > News > Politics -- Cunningham 'demanded and received' bribe, prosecutors say

2005-08-26T00:17:00.000-04:00

By Onell R. Soto
UNION-TRIBUNE STAFF WRITER

4:40 p.m. August 25, 2005

SAN DIEGO – U.S. Rep. Randy "Duke" Cunningham "demanded and received" a bribe from a Pentagon contractor who paid "an amount far greater" than market value for the congressman's Del Mar Heights home in 2003, according to prosecutors.
The allegations contained in papers filed Thursday in San Diego federal court are the first in which the U.S. Attorney's Office has publicly accused Cunningham of committing a crime.

Cunningham's lawyers, in a statement, denied any wrongdoing by the Republican congressman.

"Duke Cunningham strongly denies these allegations and we will contest them in court as soon as the judge permits us to do so," they said.

The legal papers were filed to support a lawsuit in which prosecutors are attempting to seize Cunningham's Rancho Santa Fe house because they say it was obtained with tainted money – profits from the sale of the Del Mar house.

Thursday's filing also outlines at least some of the criminal allegations that apparently are the focus of a grand jury that has been hearing testimony from witnesses in the case for several months.

Cunningham and his wife sold their Del Mar house to a company owned by Mitchell Wade, the president and owner of Pentagon contractor MZM Inc., on Nov. 20, 2003, for $1.675 million, "an amount far greater than its true fair market value," a prosecutor said in the papers.

"Cunningham demanded and received this money in return for being influenced in the performance of his official acts as a public official," prosecutor Jason Forge said in the papers.

Government lawyers originally filed the suit seeking to seize Cunningham's house in secret, but put a notice with county property records advising potential buyers of the suit.

As a result, it's nearly impossible for Cunningham to sell the house.

Cunningham's lawyers responded by asking a federal judge to remove the notice so the house could be sold. They also asked the judge to force government officials to make the lawsuit public.

With its actions Thursday, prosecutors are saying those arguments are moot.

The judge is scheduled to hear arguments Sept. 9.

Donors back Duke's use of money for legal costs North County Times - North San Diego and Southwest Riverside County News

2005-08-23T09:14:00.000-04:00

By: MARK WALKER - Staff Writer

Campaign contributors apparently are OK with U.S. Rep. Randy "Duke" Cunningham spending their money on legal defense costs, the congressman's campaign treasurer said Monday.

Kenneth Batson, who manages the finances for the Friends of Duke Cunningham re-election committee, said the campaign sent out more than 750 letters to contributors seeking permission to use the money to pay the congressman's attorneys.

Thus far, about 30 percent of those who were sent the letters have responded and most have given permission to use the money for the legal bill rather than the campaign's other offered option of sending it to the GOP's National Republican Congressional Committee, Batson said.

"It's running about 7 to 1 in favor of using the money for the (legal) defense," Batson said.

Earlier this month, Friends of Duke Cunningham asked the Federal Election Commission for permission to use up to $672,000 in its campaign account to pay a legal bill that one his aides has said could reach as much as $1.5 million. The money was donated by individuals and political action committees.

Cunningham, R-Escondido, announced in mid-July that he would not seek re-election as he confronts a federal grand jury investigation into his dealings with defense contractors. The money was raised prior to his announcement.

The 63-year-old lawmaker, now serving his eighth consecutive term, has denied any wrongdoing.

The 50th Congressional District he has represented since 1993 includes most of North County as well as portions of northern San Diego.

Batson said that based upon past rulings by the election commission, he anticipates the government's campaign spending watchdog agency will approve the request. The agency is expected to rule sometime in October.

In addition to using his campaign account to pay his lawyers, Cunningham also has asked the House of Representatives Committee on Standards of Official Conduct for permission to set up a legal defense fund.

The House panel, commonly known as the ethics committee, can authorize establishment of a legal defense fund through a simple written authorization by its chairman, Rep. Doc Hastings, R-Washington.

If that happens, paperwork for the defense fund would be filed with the House Clerk's office. Legal defense funds allow one-time individual and corporate contributions of up to $5,000.

Attorney Charles LiMandri of Rancho Santa Fe gave $1,000 to Cunningham's campaign account before the congressman's troubles with federal prosecutors arose. He said Monday he has told Batson his contribution could be used on legal bills.

"I am disappointed with the current situation and the apparent lack of judgment, but nonetheless the guy is a great American and a war hero," LiMandri said, referring to Cunningham's career as a U.S. Navy fighter pilot. He became an ace and was awarded the Navy Cross, two Silver Stars and a Purple Heart during the Vietnam War.

LiMandri said his donation was made in recognition of Cunningham's support for transferring the cross at Mount Soledad to the National Park Service in order to keep the symbol at the memorial site.

"I hate to see him painted with a black brush that undermines all the good he has done," LiMandri said. "I won't withdraw my support totally and I will continue to pray for him and hope for the best."

Cunningham's difficulties escalated last week when it was learned the government has filed a civil suit against the $2.5 million Rancho Santa Fe home he purchased in 2004.

That acquisition came after he and his wife, Nancy, sold their Del Mar Heights home to defense contractor and personal friend Mitchell J. Wade for $700,000 more than Wade would sell the home for 11 months later.

In a filing related to that civil action, an assistant U.S. attorney wrote the home was obtained through "proceeds traceable to a violation" of the bribery statue in the U.S. Code.

His attorneys are contending the congressman and his wife's due process rights are being violated because that suit and its allegations were sealed when the government filed it on July 21, one week after Cunningham said he wasn't going to run for another term and would sell the home.

A hearing challenging the government's civil action is set for U.S. District Court in San Diego on Sept. 9.

Cunningham has kept a low profile during the August congressional recess, not scheduling any public appearances nor granting any interviews.

The names of staffers from the congressman's congressional office who have been subpoenaed to appear before the grand jury must be disclosed to the House of Representatives under its rules when Congress reconvenes in two weeks.

Last month, the House was told that the congressman's legislative director, Nancy Lifset, had been subpoenaed. Last week, Cunningham's spokesman confirmed that additional staffers have received demands that they also appear before the grand jury.