FBI searches home of California congressman at center of federal probe
Saturday, July 2, 2005
By SETH HETTENA
Associated Press Writer
SAN DIEGO -- Federal agents on Friday searched the California home of U.S. Rep. Randy "Duke" Cunningham, along with the yacht in Washington, D.C., where he has been living, the FBI said.
Agents from the FBI, Internal Revenue Service and the Defense Department's criminal investigative service also searched the Washington offices of a defense firm whose founder bought the congressman's previous home, leading to a federal investigation, said Debra Weierman, a Washington FBI spokeswoman.
Cunningham could not be reached for comment Friday, but his attorney, K. Lee Blalack, released a statement calling the raids "an appalling abuse of government power. He said he told the government Thursday the congressman is going to cooperate fully with the investigation.
"They will apparently not take 'yes' for an answer and have instead opted to use strong-arm tactics that were designed to generate headlines," Blalack said.
Cunningham, 63, has said that he showed poor judgment in selling the house, but he acted honestly and predicted that an investigation would prove that.
The former Navy "Top Gun" fighter pilot and eight-term Republican congressman sold his home in November 2003 to Mitchell Wade, a campaign contributor and close friend.
Wade paid $1.7 million for the 3,826-square-foot house in wealthy, seaside Del Mar, just north of San Diego. He put it back on the market soon after and eventually took a $700,000 loss when he resold it in October 2004. During that span, home prices in San Diego County rose an average of nearly 25 percent.
Meanwhile, Wade's little-known company, Washington, D.C.-based MZM Inc., was increasing its federal contracting business. In 2004, MZM tripled its revenue and nearly quadrupled its staff, according to the company's Web site.
Cunningham is a member of the House Appropriations Defense Subcommittee and the Permanent Select Committee on Intelligence, both of which oversee the kind of classified intelligence work MZM does for the military.
The U.S. Attorney's Office in San Diego is investigating the house sale with help from the FBI. Earlier this week, Cunningham's office disclosed that a federal grand jury has subpoenaed documents from him, though they declined to elaborate further.
Cunningham has also lived part-time on Wade's boat, docked on the Potomac River. He has said he agreed to pay dock fees and service and maintenance costs to Wade in lieu of rent to stay there. Living on Wade's boat without paying would violate congressional ethics rules.
The Defense Department halted orders this month on a five-year contract that provided MZM with $163 million of revenue over its first three years after the department's inspector general found that it did not satisfy rules on competitiveness.
This week, MZM announced that James King, a retired three-star Army general, was taking over as president and chief executive -- a role held for years by Wade, who founded the company in 1993.
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