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Rep. Cunningham pleads guilty to conspiracy :
By ELLIOT SPAGAT
11/28/05 "Associated
Press" -- -- Rep. Randy "Duke" Cunningham
admitted taking $2.4 million in bribes as part of guilty pleas
Monday in a case that grew from an investigation into the sale of
his home to a wide-ranging conspiracy involving payments in cash,
vacations and antiques.
Cunningham, 63, entered pleas in U.S. District Court to charges of
conspiracy to commit bribery, mail fraud and wire fraud, and tax
evasion for underreporting his income in 2004.
Cunningham answered "yes, your honor" when asked by U.S. District
Judge Larry Burns if he had accepted bribes from someone in exchange
for his performance of official duties.
After the hearing, Cunningham was taken away for fingerprinting. He
will be released on his own recognizance until a Feb. 27 sentencing
hearing. He could receive a maximum sentence of 10 years in prison.
He also agreed to forfeit to the government his Rancho Santa Fe
home, more than $1.8 million in cash and antiques and rugs.
In a prepared statement, prosecutors said Cunningham admitted to
receiving at least $2.4 million in bribes paid to him by several
unnamed conspirators through a variety of methods, including checks
totaling over $1 million, cash, rugs, antiques, furniture, yacht
club fees and vacations.
"He did the worst thing an elected official can do — he enriched
himself through his position and violated the trust of those who put
him there," U.S. Attorney Carol Lam said in the statement.
The case began when authorities started investigating whether
Cunningham and his wife, Nancy, used the proceeds from the
$1,675,000 sale to defense contractor Mitchell Wade to buy a $2.55
million mansion in ritzy Rancho Santa Fe. Wade put the Del Mar house
back on the market and sold it after nearly a year for $975,000 — a
loss of $700,000.
Cunningham is an eight-term congressman and former Vietnam War
flying ace known on Capitol Hill for his interest in defense issues
and his occasional temperamental outbursts
Cunningham has been under investigation since his sale of the home
attracted the attention of federal authorities.
He drew little notice outside his San Diego-area district before the
San Diego Union-Tribune reported last June that he'd sold the home
to Wade.
The house sale was just one in a series of too-friendly deals for
Cunningham. Though he denied wrongdoing when he announced in July
that he wouldn't seek re-election, Cunningham himself acknowledged
it didn't look good.
Cunningham's pleas came amid a series of Republican scandals. Rep.
Tom DeLay, R-Texas, had to step down as majority leader after a
Texas prosecutor indicted him in a campaign finance case; a stock
sale by Senate Majority Leader Bill Frist, R-Tenn., is being looked
at by regulators; and Vice President Dick Cheney's chief of staff
was indicted in the CIA leak case.
In addition to buying Cunningham's home at an inflated price, Wade
let him live rent-free on his yacht, the Duke Stir, at the Capital
Yacht Club. His firm, MZM Inc., donated generously to Cunningham's
campaigns.
Around the same time, MZM was winning valuable defense contracts,
and Cunningham sits on the House Appropriations subcommittee that
controls defense dollars. In 2004 the little-known company based in
Washington, D.C., tripled its revenue and nearly quadrupled its
staff, according to information posted on the company Web site
before Wade stepped down as president and the company was sold to a
private equity firm.
An associate of Wade, Brent Wilkes, president of a Poway company
called ADCS Inc., also gave Cunningham campaign cash and favors.
Wilkes reportedly flew Cunningham in a corporate jet to go hunting
in Idaho and golfing in Hawaii, and a charitable foundation Wilkes
started spent $36,000 hosting a black tie "Tribute to Heroes" gala
in 2002 that feted Cunningham with a trophy naming him a hero.
ADCS, which specializes into turning paper records into digital
files, has received tens of millions in Defense Department contracts
since the late 1990s. In some years, lawmakers on Cunningham's
spending panel added the money themselves, even scolding the
Pentagon for not requesting it in the first place.
Unlike Wade and Wilkes, the third man federal investigators focused
on, Thomas Kontogiannis, apparently wasn't in the defense business.
Like them he had a mutually beneficial relationship with Cunningham.
Cunningham wrote to prosecutors in 2000 on behalf of Kontogiannis, a
New York developer then under investigation in a bribery and
kickback scheme involving school computer contracts. Two years
later, Cunningham made $400,000 selling his 65-foot flat-bottom
riverboat to Kontogiannis.
Also, a company run by Kontogiannis' nephew and daughter helped
Cunningham finance a condominium in Alexandria, Va., and his house
in Rancho Santa Fe.
Kontogiannis ultimately pleaded guilty to fraud charges. He told the
San Diego Union-Tribune that Cunningham gave him advice on attorneys
to contact to explore getting a presidential pardon.
Associated Press Writer Erica Werner in Washington contributed to
this story
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