MB Civic

Records detail contractor’s sway

By Michael Kranish  |  May 19, 2006  |  The Boston Globe

WASHINGTON — On March 8, 2004, after a private, chartered flight from Washington, Congressman Randy ”Duke” Cunningham checked into a luxury oceanfront suite at the Delano Hotel, a restored Art Deco jewel on Miami Beach. Prosecutors say the San Diego lawmaker, in town to shop for a yacht, racked up more than $15,000 in bills during the trip, including $848 in meals.

Court records show that Mitchell Wade, an ambitious defense contractor with deep pockets, picked up most of the tab. Prosecutors say the Miami Beach trip was pocket change compared with the more than $1 million in bribes Wade paid to Cunningham, a former fighter pilot and powerful member of the House Appropriations Committee, to steer government defense contracts his way.

But Wade had more money to spread around.

Within days of sending Cunningham to Miami, prosecutors say, Wade gave $32,000 in laundered campaign funds to Representative Katherine Harris, the Florida Republican and Homeland Security Committee member whose help Wade was seeking to create a complex for MZM Inc., his company, in her home state. Documents say Wade also funneled $46,000 into the campaign account of Representative Virgil H. Goode Jr., a Virginia Republican who also sits on the Appropriations Committee.

Wade then discussed getting specific defense appropriations with Harris and Goode or their staffs, according to court documents. Weeks after Wade arranged for most of the contributions to Goode, Wade walked away with a pledge for a $9 million facility in Goode’s district with help from Goode’s office, the court filings say

Harris and Goode both say they didn’t know the contributions had come from straw donors and were illegal. They have not been charged.

Nevertheless, court papers indicate that the investigation that snared Cunningham — in which the California Republican, now serving a 10-year sentence in federal prison, admitted that he took millions in bribes — and led Wade to take a plea deal could go much deeper. At least three other federal investigations involving members of Congress are also underway, linked to questions about whether lawmakers traded the power and influence of their offices for hefty campaign contributions and lavish gifts.

”There is some increasing panic among members who worry that there may be e-mails in which they sort of promised to do something that is contemporaneous with campaign contributions,” said Thomas Mann of the Brookings Institution.

Previously, Mann said, members of Congress may have believed they were following the rules as long as donations they received were legal. Now, he said, members are concerned that Justice’s Office of Public Integrity is looking at possible connections between campaign contributions and official action. The investigations are warranted, Mann added, because ”things got really out of hand” with members taking action on behalf of contributors or those provided gifts.

”If the Office of Public Integrity action is a bit strong, sometimes you have got to overreact to stamp out a practice that is truly noxious,” he said.

Word about the various investigations has been trickling out in news reports for months. Authorities want to know whether Representative Alan B. Mollohan, a West Virginia Democrat and Appropriations Committee member, used his clout to hand government contracts to nonprofit groups run by his friends; whether disgraced former GOP lobbyist Jack Abramoff bribed Representative Bob Ney, Republican of Ohio; and whether the House Appropriations Committee chairman, Jerry Lewis of California, also a Republican, improperly awarded contracts sought by a lobbyist who has been linked to Cunningham.

The anxiety level in Congress increased this week after the House Ethics Committee — long criticized for its reluctance to investigate members — announced that it was looking into the behavior of Ney and Representative William J. Jefferson, a Louisiana Democrat who is suspected of receiving bribes.

All of the members under scrutiny have denied wrongdoing.

Perhaps most significant, the Ethics Committee said it will examine the Cunningham case to determine ”whether other House members or staff are implicated.” The committee said it would check out allegations that members and staff received ”hotel rooms, limousines, and other services in exchange for performing official acts”

Though Cunningham and Wade both pleaded guilty, federal officials also want to know whether a second unnamed defense contractor may also have wooed congressmen, other defense contractors, and the CIA’s third in command with poker parties, a hospitality suite, and possibly prostitutes.

The totality of these investigations marks one of the Justice Department’s most concentrated public corruption efforts in recent history.

In a speech last week in San Diego, FBI Director Robert S. Mueller III said the bureau has made those cases its top priority. ”More than ever, the FBI must be actively engaged in combating public corruption,” Mueller said.

Though Cunningham reportedly is not cooperating with investigators, prosecutors last week asked a judge to delay Wade’s sentencing because they expect his ”cooperation will continue for quite some time.”

Cunningham, a decorated Vietnam War veteran, was so aggressive in seeking bribes that he kept track of them on his House stationery, court papers said. One notation says that in exchange for a $16 million defense contract, Cunningham expected to receive $140,000. An additional $1 million on that project would cost the contractor another $50,000 bribe, according to court documents.

In all, Cunningham took in at least $2.4 million since 2000, in part through a $700,000 profit on the sale of his relatively modest California home, a transaction that tipped off investigators, according to court records. Besides cash, contractors bribed Cunningham with top-of-the-line cars, a yacht, and antique furnishings for his new $2.5 million mansion. Wade, prosecutors say, was Cunningham’s chief benefactor, even paying $115,000 toward the congressman’s capital gains tax.

”Cunningham grew to expect luxury,” prosecutors said in court documents. ”His coconspirators eagerly plied him with it.”

Having won over Cunningham, Wade set his sights on Congress members Harris and Goode, according to court documents.

Wade wanted Harris — the former Florida secretary of state who had a pivotal role in the disputed 2000 presidential election who is now running for US Senate — to request an earmarked appropriation allowing MZM to build a Florida facility, the court records say. A few days after paying for Cunningham’s Miami Beach trip, Wade gave some of his MZM employees and their spouses $2,000 each, reimbursement for checks they’d write to Harris’s 2004 House campaign.

”The employees [then] delivered the checks to Wade, who personally handed them” to Harris, the court documents say.

In early 2005, Wade met Harris for dinner at Washington’s posh Citronelle restaurant to discuss a fund-raiser for Harris and whether Harris could get federal money for an MZM facility in her district, according to the Orlando Sentinel. Wade picked up the $2,800 dinner check, a violation of House ethics rules if Harris’s portion of the meal was worth more than $50. Harris has said she didn’t eat or drink much at the dinner and that she thought her staff had paid for her share.

In a written statement to reporters, Harris acknowledged that she and Wade talked business and that she later requested but couldn’t get a $10 million appropriation for the MZM project, which she thought would create local jobs. A spokesman would not say whether Harris was present when Wade handed over the $2,000 checks for her campaign.

Wade also arranged for Goode’s reelection campaign to get big checks. Court records say that in March 2005 Wade gave money to his associates, who in turn became what the government calls ”straw donors,” contributing at least $46,000 of Wade’s money to the Virginia Republican. Wade then asked Goode and his staff for federal money to build an MZM facility in Goode’s district. In June 2005, Goode’s staff ”confirmed to Wade that an appropriations bill would include $9 million for the facility and a related program,” according to court records.

In an e-mail to the Globe, Goode said he has no problem discussing a federal contract with such a big campaign contributor. Asked what he believed Wade wanted after MZM employees contributed so much money to his campaign, Goode responded, ”I’m a strong supporter of ‘Buy American’ and a promoter of the Fifth District of Virginia in which MZM facilities were located.”

Wade’s unnamed, unindicted coconspirator, whom news reports identified as Brent Wilkes, a onetime associate of his, also allegedly paid Cunningham more than $600,000 to get defense contracts. Wilkes ran a company called ADCS Inc., which got tens of millions of dollars in contracts to transform the Pentagon’s paper documents into computer files; court documents say that Cunningham had a hand in getting ADCS hired.

Wilkes’s name surfaced again recently because he reportedly attended poker parties at the Watergate that included members of Congress, defense contractors, and Kyle ”Dusty” Foggo, the third-ranking leader at the CIA who resigned last week.