June 30, 2005
Rep. Cunningham Receives Document Subpoena in Grand Jury Investigation Into House Sale
The federal investigation of San Diego-area Congressman Randy (Duke) Cunningham's sale of his home in 2003 to Mitchell Wade, a friend, campaign contributor, and founder of MZM Inc., a Washington D.C. defense contractor, now includes a grand jury subpoena to Rep. Cunningham for his documents related to the sale. As discussed in an earlier post (here), Cunningham sold his home to Wade for approximately $1.7 million in November 2003, and a year later Wade sold the home for $700,000 less, even though it is in one of the hottest housing markets in the country. Rep. Cunningham described the transaction recently as showing "poor judgment" but that there was nothing criminal involved. Wade's company, MZM Inc., is a defense contractor that has seen its revenue grow by 285% over the past two years by providing intelligence services to the Pentagon, much of it related to the war on terrorism and the Iraq conflict. On the company's website (here) is the following statement: "Our values: Integrity, loyalty, reliability and the highest moral conduct in business."
Cunningham is a member of the Defense Appropriations Subcommittee of the House Appropriations Committee, which approved the contracts for the company. The Defense Department's Inspector General suspended a five-year, $163 million contract with MZM because the agreement did not meet the competitiveness requirements for government contracts. An AP story (here) notes that another California Congressman, Jerry Lewis, who was chairman of the Defense Appropriations Subcommittee last year, said that all contracts approved by his subcommittee "passed the smell test." That sure is a high standard for contracting with the government. MZM also announced recently that James King, a retired Army general, has taken over for Wade as president of MZM. (ph)
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