Agents Search Homes, Yacht Of Contractor, Congressman

MZM owner Mitchell J. Wade's yacht, the Duke-Stir, foreground, is part of a probe of Wade's relationship with Rep. Randy
MZM owner Mitchell J. Wade's yacht, the Duke-Stir, foreground, is part of a probe of Wade's relationship with Rep. Randy "Duke" Cunningham (R-Calif.). (By Sarah L. Voisin -- The Washington Post)
By Renae Merle and R. Jeffrey Smith
Washington Post Staff Writers
Saturday, July 2, 2005

Federal agents armed with search warrants descended on the California house of Rep. Randy "Duke" Cunningham yesterday, the latest step in a criminal investigation into his relationship with the owner of a District-based government contracting firm.

Agents from the FBI, Internal Revenue Service and Defense Criminal Investigative Service of the Pentagon inspector general's office participated in the search of Cunningham's house near San Diego, as well as the Washington home, office and boat of Mitchell J. Wade. Wade was until recently the chief executive of MZM Inc., which does intelligence work for the Pentagon.

Cunningham, a California Republican who was a fighter pilot in Vietnam and an instructor at the Navy's Top Gun school, is a member of the House Intelligence Committee and defense appropriations subcommittee.

The investigation began three weeks ago after news reports that Wade had purchased Cunningham's home in late 2003 for $1.675 million and then sold it months later at a $700,000 loss. Cunningham also was living rent-free on Wade's 42-foot yacht at the Capital Yacht Club on the Potomac River. But he has not stayed on the yacht for about two weeks, according to a source close to the congressman.

Cunningham acknowledged last week that he showed "poor judgment" in selling his house to Wade but denied he had improperly helped MZM obtain government contracts to work on intelligence programs.

Cunningham's lawyers, K. Lee Blalack II and Mark Holscher, issued a statement calling the search of Cunningham's home in Rancho Santa Fe "an appalling abuse of government power" because the congressman agreed Monday to cooperate with a federal grand jury subpoena seeking essentially the same documents.

"They will apparently not take yes for an answer and have instead opted to use strong arm tactics that were designed to generate headlines," the lawyers said.

In Washington, around 10 a.m., more than a dozen federal agents entered the headquarters of MZM, a secure white brick building on New Hampshire Avenue NW, and ushered employees into the reception area, according to one person who was there but spoke on the condition of anonymity. The agents took the names and phone numbers of the 15 to 20 employees before allowing them to leave, then did not allow anyone to reenter, the source said.

Agents also searched Wade's Kalorama home and the yacht the contracting executive bought in late 2002 and soon renamed Duke-Stir, apparently after the congressman.

In an unsigned statement, MZM said that it was cooperating with the investigation and that its legal counsel, Steptoe & Johnson LLP, had been in contact with authorities.

"The search warrant process will not impede the ability of MZM's more than four hundred employees to continue to carry out critical national security support missions for our government," the statement said.

Attorneys at Wilmer Cutler Pickering Hale and Dorr LLP who represent Wade declined to comment.

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