Lawmaker's Ties to N.Y. Developer Investigated

By Charles R. Babcock
Washington Post Staff Writer
Tuesday, July 26, 2005

Rep. Randy "Duke" Cunningham wrote to a prosecutor in Queens in 2000 on behalf of a New York developer who was then under investigation for bribing a school superintendent to get a computer contract. The businessman, Thomas T. Kontogiannis, later bought the California Republican's boat and helped finance his new home.

Nicole Navas, a spokeswoman for Queens District Attorney Richard A. Brown, said that the Oct. 19 letter on Cunningham's congressional stationery was faxed to prosecutors handling the bribery probe but that Brown's office did not act on it further because it concerned an active grand jury investigation.

Kontogiannis was indicted along with the school superintendent a few weeks later. He pleaded guilty to a scheme to defraud in the second degree, a misdemeanor, and agreed to pay nearly $5 million to settle the bid-rigging case. Navas declined to provide a copy of the letter.

According to sources who read the letter to a reporter, Cunningham wrote that it had come to his attention that the prosecutor had filed a case against Kontogiannis. The congressman wrote that there may be a political agenda against the school official by a disgruntled contractor and that Kontogiannis may have been victimized as a result. He asked Brown to contact him with any information he could provide on the case, and he thanked the prosecutor for considering his concern.

Cunningham noted in the letter, the sources added, that he had filed a congressional inquiry with Rep. Henry J. Hyde (R-Ill.), who was then chairman of the House Judiciary Committee, and attached a note in which a committee lawyer acknowledged receiving the inquiry and said he was looking into it.

Sam Stratman, a spokesman for Hyde, said the note "was merely a matter of courtesy to acknowledge that the committee had received [Cunningham's] request." When the committee lawyer "learned that the New York case was a potential criminal matter," Stratman said, "any inquiry would have been inappropriate. No inquires were ever made of New York officials by the chairman or his staff."

K. Lee Blalack II, Cunningham's attorney, said: "Duke's letter to the district attorney did not urge any outcome or action of any kind in the investigation of Mr. Kontogiannis. It merely related Mr. Kontogiannis's concerns about a political agenda behind the investigation and asked the prosecutor for a response. There is nothing improper or unethical about such a request."

Kontogiannis did not return calls to his home and office seeking comment.

A federal grand jury in San Diego is investigating Cunningham's relationship with Kontogiannis, according to a source who received a subpoena for records from the grand jury. It is also examining the congressman's dealings with Mitchell Wade, a Washington defense contractor who bought the congressman's home near San Diego in late 2003 and then sold it at a $700,000 loss. Wade also allowed Cunningham to stay rent-free on his yacht, the Duke-Stir, while in Washington.

Kontogiannis has said he bought Cunningham's boat, the Kelly C, for $600,000 in 2002 and then spent $100,000 on improvements. He never changed the title, and the boat is still registered in Cunningham's name. Kontogiannis said he used more than $400,000 he owed the congressman on the purchase of the Kelly C to pay off the second mortgage of the home Cunningham bought after his home sale to Wade.

Cunningham, an eight-term veteran, has announced that he will not seek reelection.

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