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Developer Helped Congressman By Buying Boat, Arranging Loan
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Kontogiannis, who said he served in the Greek navy before coming to the United States in 1970, said he met Cunningham at a Washington function about 15 years ago. They talk a couple of times a year, he said. Cunningham was a Navy fighter pilot and an instructor at its Top Gun flight school.
Kontogiannis said he went to a party on the Kelly C around 1995, when it was owned by another congressman, and liked the steel-hull craft. After Cunningham bought it 1997, for a reported $200,000, Kontogiannis said he told the congressman: "If you ever decide to sell it, I'd love to buy it."
Cunningham "called and asked if I was still interested" in buying the boat, Kontogiannis said. He did so, he said, after getting the boat appraised at $1.2 million. The developer said he financed the transaction by giving the congressman about $30,000, assuming the payments on an existing $140,000 bank loan and financing the remaining $425,000 as a personal note that accumulated interest at the prime rate. He said a family company, Axxion LLC, made the payments on the bank loan.
The congressman approached him again in 2003 when Cunningham planned to buy the Rancho Santa Fe home, Kontogiannis said. The congressman asked if Coastal Capital, the company the developer said is owned by his nephew and daughter, could finance the mortgage at its wholesale price, which had a slightly lower interest rate than retail mortgage lenders. The decision was "a slam dunk," Kontogiannis said, because the house had been appraised at $2.55 million.
Kontogiannis said Cunningham asked him last year to pay back the Kelly C loan, which was accruing interest at about 3 1/2 percent, by paying off the second mortgage on the house. Interest on the congressman's loan was accruing at 10 percent, though Cunningham wasn't making payments, he said.
The developer paid off the mortgage, he said, after Cunningham wrote him a check for $70,000 to make up the difference between what he owed on the boat and what Cunningham owed on the second mortgage.
As of late June, land records in California did not show the congressman had paid off the second mortgage. "I sent him a letter of satisfaction" in March, Kontogiannis said. "It's up to him to get it recorded."
Staff researchers Alice Crites, Madonna Lebling and Meg Smith contributed to this report.
