Pentagon To Scrap Site Connected To Scandal

By Walter Pincus
Washington Post Staff Writer
Tuesday, August 1, 2006

The Pentagon has decided not to renew a contract with a company caught up in the scandal involving former House member Randy "Duke" Cunningham (R-Calif.), forcing the closure of an intelligence center in Virginia that grew out of a 2003 "earmark" in legislation by Rep. Virgil H. Goode Jr. (R-Va.).

The Defense Department decided in early June to terminate the Foreign Supplier Assessment Center (FSAC) in Martinsville, Va., according to a statement from the Pentagon yesterday. The reason, according to the statement, was that "the U.S. government has other entities that provide similar services."

Earmarks are special projects that lawmakers insert in spending bills to benefit their home districts. An earmark in the fiscal 2003 Defense spending bill, written by Goode, led to the creation of the FSAC.

When it opened in 2004, the center had the task of checking on the ownership of foreign companies that had contracts with Pentagon agencies. Yesterday's Pentagon statement listed four other government entities that provide those services, including the Intelligence Community Acquisition Risk Center and the National Security Agency.

When asked about the original contract, a Pentagon official who requested anonymity said FSAC did useful work, but it was not a Pentagon priority and was not requested by the Defense Department.

The end of the contract could result in the loss of at least 30 jobs.

The termination of the FSAC contract was first reported last week in the Martinsville Bulletin. Goode told the Roanoke Times last week, "I cannot help but believe that the recent negative publicity surrounding the president of the former owner of the property contributed to DoD's decision" not to renew the contract. Goode did not respond to requests for comment yesterday.

The original contract went to MZM Corp., whose former president, Mitchell Wade, has pleaded guilty to conspiring to commit bribery and election contribution fraud. In his plea agreement, Wade acknowledged being told by congressional staff members that Goode had put an earmark for several million dollars in the defense bill for the FSAC facility. MZM was subsequently sold, and the contract went to Athena Innovative Solutions Inc. Athena did not respond yesterday to a request for comment.

Court papers associated with Wade's guilty plea said that "Representative A," identified as Goode, received $46,000 in contributions from Wade that were disguised to appear as if they had come from MZM employees in 2003 and 2005. That was part of about $90,000 Wade and his workers contributed to Goode overall.

At the opening of the Martinsville facility, Goode said, "This expansion of MZM Inc. will be a significant boost to the local economy."

On July 21, 2006, Richard Berglund, once an MZM official and recently the director of Athena's Martinsville office, pleaded guilty to illegally funneling Wade campaign donations to Goode. He said he had helped Wade donate funds in others' names, a single misdemeanor that could mean a year in jail. Berglund, who will be sentenced on Jan. 18, has agreed to cooperate in the continuing investigation.

According to his plea agreement, Wade targeted Goode because Wade wanted to open an office in Goode's district and believed that Goode "had the ability to request appropriations funding for this facility and would be an advocate for funding for MZM." According to the plea, Wade did not inform Goode or his staff that the donations were illegal.

Goode's staff said last month that the congressman is not the target of any investigation.


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