Capitol Hillbillies
Contractor cops plea for bribing Cunningham
By Staff and Wire Reports, Feb 25, 2006, 00:18


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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."

© Copyright 2005 Capitol Hill Blue


Contractor pressured employees to contribute to Cunningham, three say


By Marcus Stern
COPLEY NEWS SERVICE

10:02 p.m. June 21, 2005

WASHINGTON  Mitchell Wade, founder of the defense contracting firm MZM Inc., pressured employees to donate to a political fund that benefited Rep. Randy "Duke" Cunningham and other members of Congress, according to three former employees of the company.
Wade, who took a $700,000 loss on the purchase of Cunningham's Del Mar home and allows the congressman to stay on his yacht while in Washington, demanded employees tomake donations to the company's political action committee, MZM PAC, they said.

"By the spring of '02, Mitch was twisting employees' arms to donate to his MZM PAC," said one former employee. "We were called in and told basically either donate to the MZM PAC or we would be fired."

Many companies have PACs, but campaign finance laws prohibit employers from pressuring workers to contribute to the PAC. They may encourage contributions, but not compel them.

"It is illegal to solicit campaign contributions for the company's political action committee by the use of threats, force or threat of job reprisal," said Larry Noble, former general counsel of the Federal Election Commission and currently director of the Center for Responsive Politics, a nonpartisan organization that tracks the flow of money in politics.

"If they say to somebody, `You either give or you are going to be fired,' they have violated the law," Noble said.

MZM officials did not respond to requests for comment. In the past week, Wade resigned the posts of president and chief executive officer of the company, turning over those duties to Chief Operating Officer Frank Bragg, company sources said. Wade remains the primary shareholder of the privately held, Nevada-licensed company, sources added.

The resignations came after the Union-Tribune reported that Wade had purchased and then sold Cunningham's Del Mar house at a loss of $700,000 and has allowed the Rancho Santa Fe Republican to stay aboard his yacht, called the Duke-Stir, while in the nation's capital. The FBI and a federal grand jury are investigating the matter.

Since the initial disclosure of the 2003 home sale, Cunningham has released only two brief statements on his ties to Wade, saying that the home sale was "aboveboard" and that he has paid an undisclosed amount for use of the yacht.

Wade has made no public comment since his ties to Cunningham were first reported.

Wade operates out of the company headquarters, a four-story townhouse in the Dupont Circle area of Washington. About 20 to 25 employees work in the building, according to the former employees. They say the company has grown to more than 400 employees, with much of the expansion coming in the past two years.

Little public information exists on what MZM ... a name based on the first names of Wade's children Matthew, Zachary and Morgan ... does for the government. Former employees, however, say much of its work is with three defense intelligence operations:

Counter Intelligence Field Activity, a highly secretive program created in 2002 by a Pentagon directive that focuses on gathering intelligence to avert attacks like the ones on Sept. 11, 2001.

The Army National Ground Intelligence Center in Charlottesville, Va., whose mission is to provide soldiers with battlefield intelligence.

The U.S. Army Intelligence and Security Command at Ft. Belvoir, Va., just outside Washington, which also provides battlefield intelligence.

MZM has been seeking to increase its contracts with the Central Command, which oversees military operations in Iraq and Afghanistan, and the Special Operations Command, both based at MacDill Air Force Base in Tampa, Fla., according to former employees.

The three former MZM employees who said Wade pressured them and others to donate money to the company PAC declined to be identified, saying they feared for their careers if their names were disclosed. All continue to work in the military and intelligence fields.

They and other former MZM employees questioned the way Wade solicited contracts from Defense Department intelligence agencies during the time they worked for the company.

They also expressed concerns about Wade's dealings with three House members who received a large portion of the money disbursed by MZM's PAC. The three ... all Republicans ... are Cunningham and Reps. Virgil Goode of Virginia and Katherine Harris of Florida.

MZM's PAC donated $17,000 to Cunningham from 2000 to 2004. Donations included $12,000 to "Friends of Duke Cunningham" and $5,000 to his leadership PAC, the American Prosperity PAC. During the same period, MZM PAC gave Goode $11,000 and Harris $10,000.

Neither Goode's nor Harris' offices returned calls seeking comment.

Many companies form PACs to raise and spend money to help elect or defeat political candidates. Individuals also may contribute separately. PACs are not allowed to give more than $5,000 to any one candidate per election. When a primary and general election are involved, PACs may give $5,000 per candidate in each, for a total of $10,000 per election cycle. Individuals may give up to $4,000 per election cycle.

In addition to the MZM PAC, MZM officials also made contributions to the House members' campaigns. Wade gave Cunningham $6,000 between 2000 and 2004.

MZM officials and their family members gave Harris, who ran for Congress in 2002, a total of $44,000 during 2003 and 2004. Goode received a total of $27,851 between 2000 and 2004.

MZM senior employees and family members gave Goode an additional $44,625 in March, according to information compiled by the Center for Responsive Politics.

MZM has a facility in Goode's rural Virginia district, not far from the Army National Ground Intelligence Center, which is one of MZM's key customers.

MZM is also planning to buy a facility in Harris' district, where it can be close to two of its other customers, the U.S. Central Command and the Special Operations Command, which are in a neighboring congressional district.

Cunningham is on the Permanent Select Committee on Intelligence and the defense appropriations subcommittee, which puts him in position to influence the awarding of defense intelligence contracts.

MZM had 56 such contracts totaling $68,645,909 in fiscal year 2004, according to Keith Ashdown, an analyst with Taxpayers for Common Sense. One of those contracts is to provide interpreters in Iraq. For the most part, the contracts were awarded to MZM without competition through a process known as "blanket purchase agreements."

Ashdown echoed the comments of former MZM employees in saying Wade strategically targeted MZM's donations.

"A lot of people will throw a lot of money at a lot of different people," Ashdown said. Wade's "strategy was, `I need to make friends with a few very influential lawmakers and really, really schmooze and coddle them and that's how I'm going to make my money.' And that's what he did.

"The first person is Cunningham, a senior guy on the (defense appropriations) committee, and he helps them get business. Then they go to another guy on the (defense appropriations) committee, Goode, who's more junior but has the benefit of getting a facility in his district. And then they go to Katherine Harris, who isn't on the committee but needs lots of money for her Senate race and would be bringing business and new jobs to her area," Ashdown said.

Harris plans to run for Senate next year.

One of the former MZM employees quoted Wade as describing his congressional strategy this way: "The only people I want to work with are people I give checks to. I own them."

Another former employee said Wade used letters to remind employees before their employment anniversaries to contribute a designated amount to the company PAC. The specific amount was based on their level of seniority in the company, with more senior officials expected to give $1,000 each and less senior employees expected to give $500, the former official said.

A third former employee described being rounded up along with other employees one afternoon in the company's Washington headquarters and told to write a check, with the political recipient standing by. The former employee wouldn't give the name of the politician receiving the donations.

"When (employers) solicit contributions to the political action committee, they are supposed to say that the contribution is voluntary," said Noble, the former general counsel of the Federal Elections Commission. "They are allowed to suggest an amount to give, but they have to say you can give more or less, or nothing at all.

"And they have to say that there will be no job reprisals for not giving. So even being silent on it and soliciting contributions is, actually, technically a violation of the law," Noble said.."

Citizens for Responsibility and Ethics in Washington, a group with ties to the Democratic Party, lodged a complaint Tuesday with the Federal Election Commission after a Copley News Service story posted on the Union-Tribune's Web site  SignOnSanDiego.com  disclosed the allegations that Wade had pressured employees to contribute to MZM PAC.

Copley News Service correspondent Jerry Kammer contributed to this report.

Cunningscam Continues

If there was ever a time to get the House Ethics Committee up and running again, now is that time. In addition to the multiple ethically questionable trip-ups of House Majority Leader Tom DeLay, there's a new story unfolding involving a "Duke," a defense contractor and a highly unusual million-dollar real estate transaction. While the FBI has already "opened an inquiry" into the conduct of Rep. Randy "Duke" Cunningham (R-CA), Rep. Doc Hastings (R-WA) and his stagnant House Ethics Committee can do nothing.

THE STORY: In late 2003, when Cunningham decided to sell his Del Mar, CA, home, he didn't rely on the market. Instead, "Cunningham -- who sits on the defense appropriations subcommittee -- turned to a defense contractor." After purchasing the house, contractor Mitchell Wade of MZM Inc. flipped it back on the market "where it languished for 261 days before selling for $700,000 less than the original price." During this period, Cunningham used his influential position to "[support] the contractor's efforts to get tens of millions of dollars in contracts from the Pentagon." Just how successful were Cunningham's efforts? By the next year, Wade's little-known MZM had tripled its revenue, nearly quadrupled its staff, and suddenly landed itself on a list of the top 100 federal contractors for 2005. Neither Wade nor his company was ever listed as the buyer of Cunningham's house. "Instead, the [property] records state that Cunningham sold the house to 1523 New Hampshire Avenue LLC. Nevada state business records show that Wade owns that company, too. It is the address of his Washington, D.C., office

American Progress Report

The Republican-Lobbyist-Military-Industrial-Complex

First, Randy Cunningham, and Now the CIA?

Two Defense Contractors at the Center of Ex-Rep. Randy "Duke" Cunningham's Bribery Case "Helped" Other Lawmakers

Michael Kinsley on Harmless Favors v Corrupt Bribery in Washington