Lawmaker-Contractor Deals Questioned
Congressman's Relationship With Defense Firm Chief Sparks Call for Ethics Probe

By Jeffrey H. Birnbaum and Renae Merle
Washington Post Staff Writers
Friday, June 17, 2005

Rep. Randy "Duke" Cunningham, a Vietnam War hero and "top gun" fighter pilot, serves on the House subcommittee that appropriates money for the nation's defense. The California Republican also lives on a yacht berthed on the Potomac that is owned by the president of a local defense firm whose contracts Cunningham has supported.

The relationship between Cunningham and the defense executive, Mitchell J. Wade, does not stop there. Two years ago, Wade bought Cunningham's house in California at a price that turned out to be much higher than it fetched at resale. Wade, who put the property up for sale soon after he bought it, had to swallow a $700,000 loss.

Cunningham said that he supported government contracts for Wade's firm, District-based MZM Inc., according to the San Diego Union-Tribune, which first reported the real estate transaction Sunday. But the congressman said in written statements that he has done nothing wrong, did not sell his house at an inflated price and would disclose additional details about paying for his stay on the yacht as soon as he compiled them.

Cunningham declined to be interviewed yesterday. Officials at MZM did not return phone calls or respond to a visit.

Cunningham's relationship with Wade has created a furor among Democrats and interest groups, which demanded an investigation. Naomi Seligman, deputy director of Citizens for Responsibility and Ethics in Washington, said Cunningham's "sweetheart" deals should be investigated because they might violate House rules. Asked about the Cunningham disclosures, House Minority Leader Nancy Pelosi (D-Calif.), said: "I think the ethics committee has to do its job."

Wade bought Cunningham's house in Del Mar, Calif., for $1.675 million in late 2003 through a Nevada corporation. The congressman used the proceeds to buy a larger house for $2.55 million in Rancho Santa Fe, Calif., the Union-Tribune reported.

An MZM spokesman told the newspaper that the firm viewed the Cunningham house as a potential West Coast outpost. Instead, the firm decided the property did not fit the bill and quickly put it on the market. The house did not attract a buyer for months and finally was sold in October 2004 for $975,000.

Wade is also involved in Cunningham's housing situation in Washington. The North County Times of Escondido, Calif., reported yesterday that Cunningham is living at least temporarily on a 42-foot yacht owned by Wade and kept at the Capital Yacht Club. The boat's name: Duke Stir. It could not be determined yesterday whether the name is a reference to the congressman's nickname.

The North County Times quotes the club's dock master as saying that Duke Stir replaced Cunningham's own boat, the Kelly C, in the slip on the Potomac. The Kelly C was presumably away for refurbishment, the newspaper said. Robert McKeon, the club's commodore, declined to comment yesterday.

MZM and Wade also donated money to Cunningham's reelection effort. The company and its affiliates, for instance, contributed $20,000 in "soft money" to Cunningham's American Prosperity PAC State Fund between 2000 and 2002, according to

Cunningham's ties with MZM go further. The congressman was the keynote speaker at MZM's Christmas party for 385 people at the Four Seasons Hotel in Georgetown last Dec. 8, where he helped dispense silver dollars to recovering Iraq war veterans whom the company invited to the festivities, according to an attendee who spoke on the condition of anonymity.

Cunningham also is listed on the Web site of the Sure Foundation, a charitable group with ties to MZM and Wade, as a member of an "honorary committee" for the Foxfield Races. The twice-yearly Charlottesville horse race raises money for the foundation.

Nancy and April Cunningham are among four people listed on the foundation's Web site as members of the "advisory council." Nancy is the name of the lawmaker's wife, and he has a daughter named April.

The foundation, which tax forms said was created with a loan from Wade, lists its address as MZM's headquarters in the District. Wade is listed on the foundation's Web site as the foundation's treasurer and his wife, Christiane, is named as its "president emeritus."

MZM also has ties to Rep. Virgil H. Goode Jr. (R-Va.).

In the 2004 election cycle, Goode's largest contributor was MZM; its political action committee and its employees, including Wade, gave a total of $48,551, according to the Center for Responsive Politics.

Goode was the principal sponsor of a provision in 2003 defense legislation that called for the creation of a military center in his district, known as the Foreign Supplier Assessment Center, which MZM was hired to run, said a senior defense official, who spoke on the condition of anonymity because of the sensitivity of the matter.

The official added that the center, which is meant to check on the ownership of foreign companies that contract with the Defense Department, will do useful work, but was not a Pentagon priority and was not requested by the Defense Department. It was mandated by Goode on MZM's behalf, the official said.

A November 2003 press release by Virginia Gov. Mark R. Warner (D) said Goode was "instrumental in securing this project for Virginia." Goode himself, in the release, said, "I believe that MZM will add a new dimension to the economy of Martinsville," where the center is located.

In March, April and May of 2003 -- the year that Goode sponsored the legislation, Wade, his wife, MZM officer James C. King, and King's wife gave Goode's election campaign a total of $12,000, according to MZM's political action committee also donated $10,000 to Goode's campaign in 2003.

Goode's office did not respond to requests for comment.

Wade founded MZM 1993. Last fiscal year, the firm had about $65 million in Pentagon contracts, ranking it among the 100 largest federal information technology contractors, according to Washington Technology magazine.

Researcher Richard S. Drezen contributed to this report.

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