Duke Cunningham

Cunningham Briber Hit with $1 Million Fine for Fake Contribs

Paul Kiel | October 31, 2007, 3:35PM

Mitchell Wade, that other high-profile (alleged) briber of Duke Cunningham, got hit with a $1 million fine from the Federal Election Commission, what the commission calls "the second largest penalty ever paid in the 32-year history of the FEC."

Update: We neglected to mention that the settlement was a result of a complaint from watchdog Citizens for Responsibility and Ethics in Washington.

The fine is for reimbursing employees at his firm MZM for $78,000 in contributions they made to Rep. Virgil Goode (R-VA) and ex-Rep. Katharine Harris (R-FL). Another MZM exec, Richard Berglund, got hit with a $42,000 fine. Both of them have already pled guilty to criminal charges for the scheme. Berglund was sentenced earlier this year to a year of probation and $5,000 in fines. Wade continues to cooperate with the government in its ongoing investigation of his bribery activities, recently testifying against fellow contractor Brent Wilkes at his trial.

Although Jim King, formerly an aide to Michael Hayden when the CIA chief ran the National Security Agency, was also under investigation by the FEC for his contributions at MZM, the FEC did not to fine him.

The FEC makes a point of saying that it uncovered no evidence that either Goode or Harris knew about the scheme. Wade wooed both of them in order to get earmarks for MZM facilities. In both cases, he was successful -- only Harris bungled the job and failed to land the $10 million she was seeking. Goode requested a total of $9 million for the Foreign Supplier Assessment Center in his Virginia district, which MZM was hired to run. Unfortunately, the center folded after Wade pled guilty, sticking the town, Martinsville, with the bill.

Duke Cunningham

Alleged Briber: You Got Me All Wrong

Paul Kiel | October 31, 2007, 11:32AM

You really can't blame Brent Wilkes. After all, it can be such a drag getting a refund.

During his second day of cross-examination yesterday, Wilkes testified that he hadn't sought to reclaim $100,000 he'd paid Duke Cunningham -- the money was supposedly to buy Duke's yacht, but the congressman kept both the cash and the boat --, because it was, well, awkward. He needed Duke's help up there on the Hill, and he didn't want to needlessly upset his crucial friend. Best to let sleeping dogs lie. And when the prosecutor asked Wilkes if he'd ever asked any of his lawyers or accountants to get involved, Wilkes testified: "The consensus advice was that it was better not to pursue it." I bet it was.

But there was even more awkwardness ahead for Wilkes. When Cunningham asked him to wire $525,000 to a New York firm (run by Thomas Kontagiannis), Wilkes jumped at the chance. But not simply because Duke asked him to -- because he was told it was a great investment opportunity: 9% return short-term! Did he ask for an investment prospectus? Assessments? Any information at all? Nope, he received adequate assurances about the investment over the phone.

But the money disappeared (well, it actually went towards paying off Cunningham's mortgage). Did Wilkes seek to recoup the money? "Wilkes said he tried to get the money returned but was unsuccessful, and did not know where the money went." Well, you win some, you lose some.

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Brent Wilkes

Wilkes Takes The Stand

Paul Kiel | October 26, 2007, 9:45PM

Surprise, surprise! From the AP:

Defense contractor Brent Wilkes emphatically denied bribing former U.S. Rep. Randy "Duke" Cunningham Friday as he took the stand in his trial, which had been suspended while wildfires ravaged San Diego County.

Wilkes' attorney, Mark Geragos, surprised prosecutors by calling Wilkes on the first day of trial in a week. The lawyer had not warned them he would be calling his client to the stand, and had not hinted in earlier hearings that Wilkes would testify in his own defense.

"Did you ever bribe him?" Geragos asked Wilkes, who took the stand in a gray suit.

"No, I didn't," Wilkes replied.

Presumably Geragos' direct examination was a little more elaborate than that. We're eager to hear more.

Update: The updated AP story has a lot more detail. Wilkes denied ever paying for or having sex with the prostitute who testified against him earlier in the trial. Flatly denied it. And there was this precious exchange:

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Must Read

Today's Must Read

Paul Kiel | October 26, 2007, 9:46AM

If you're a corrupt pol looking for lessons in the Duke Cunningham story, you've found dozens. Don't make a bribe menu, first and foremost. But it's also probably not a good idea to shoot a video of your Hawaii vacation with your (alleged) briber.

Prosecutors entered the following 90-second video into evidence last week during the trial of Brent Wilkes. In it, you can see Wilkes, his nephew Joel Combs (who's testifying against his uncle), and Duke himself silently weaving in and out of coral reefs. And one diver, just to drive home who the trip was all about, is swimming around with a large rock with "DUKE" on it. You can see him in the image above handing it to the man himself.

Ah, the memories. Seth Hettena, the author of a book on Cunningham, Feasting on The Spoils, posted the video on his blog, where he's been covering the trial:

Duke lumbers into view at about the fifty second mark. And of course that's Wilkes at the end there, suddenly bursting out with "Bali Hai!" on the deck of the boat. This is the same guy known at his company for suddenly yelling "Boom shaka laka!" and "Yeah, baby!" when he got good news (like, say, Duke had delivered millions in earmarks). Not so hard to imagine.

This is the same 2003 trip, of course, where Wilkes treated Duke to prostitutes on two consecutive nights. At least they had the good sense not to add a "Goofing Around in A Hot Tub" section to the vacation video.

Duke Cunningham

Duke, In His Own Words

Paul Kiel | October 24, 2007, 12:24PM

The trial of Brent Wilkes is on temporary hiatus due to the wildfires, but we've got your Duke Cunningham fix anyway.

Unfortunately, it seems a sure thing now that Cunningham himself won't testify at the trial. As a kind of substitute, here's (mp3) audio of the phone conversation that ended his Congressional career. It's available through the website for The Wrong Stuff, the book on Cunningham by the Copley News team that broke the story.

In early June of 2005, Copley reporter Marcus Stern came across records for Cunningham's now-infamous way-above-market house sale to defense contractor Mitch Wade (Wade himself sold the house months later for a loss of $700,000). And during that phone call, Stern got the other half of the quid pro quo he was looking for: Cunningham's admission that he'd written letters to help Wade's company MZM score contracts (that's at about the five minute mark). Four days later, Stern's story came out; five months later, Cunningham pleaded guilty.

It's a little bit of journalistic history and a lesson (if you needed one) that just because someone keeps his cool, it doesn't mean he's not lying. Take a listen.

Duke Cunningham

I (Duke) Do As I'm Told

Paul Kiel | October 19, 2007, 5:20PM

If there's a burning question that's arisen from Brent Wilkes' trial, it's not whether Wilkes is guilty. It's: 'Just how stupid is Duke Cunningham?'

According to testimony, Cunningham's (alleged) bribers were in agreement: his stupidity made him an easy mark. Wilkes' former employee testified that Wilkes told her Duke was "not the brightest congressman up there. We can work with him.”

And Mitchell Wade told jurors that Wilkes and Wade considered him to be “of below-average intelligence.” So while the unending stream of bribes kept Cunningham willing to do whatever the defense contractors wanted, you couldn't just tell him to go harass Pentagon officials because they weren't paying the bills. Wade said that the lawmaker was so thick that they had to "spell out for Duke exactly what he had to say."

He wasn't kidding. Earlier this week, prosecutors entered into evidence a set of talking points that Wade had prepared for Cunningham in 2004 for a call to a Pentagon official. We've posted a copy here, courtesy of Seth Hettena, the author of the recent book on Cunningham, Feasting on The Spoils, who's been blogging the trial. In the talking points, Wade made sure Duke's mind wasn't upset by any ambiguity. A sample:

Certainly Wade knew what he was doing. After all, look what happens when Cunningham is left to his own devices.

Duke Cunningham

Prosecution Rests in Wilkes Trial

Paul Kiel | October 18, 2007, 4:30PM

Of course, they closed with the hookers.

Two of the prostitutes who serviced Duke Cunningham and Brent Wilkes during their 2003 trip to Hawaii wrapped up the prosecution's case, and now it's Wilkes' turn. How much of a case he'll put on is entirely unclear. His lawyer Mark Geragos has threatened to call Cunningham himself to testify, but who knows if he'll follow through? It's also unclear whether Geragos will try to get other lawmakers to testify about their relationship with Wilkes -- as part of his defense that his gifts to Cunningham were just the way Washington worked for a defense contractor.

Both of the prostitutes told the same story: Wilkes' nephew brought them into the hotel suite. And from there:

"They asked us if we wanted to get naked and get into the Jacuzzi," [Donna] Rozetta said.

"What did you do," prosecutor [Phillip] Halpern asked.

"We got naked and got in the Jacuzzi," Rozetta replied.

The Jacuzzi calls to mind another hot tub moment in the Cunningham saga.

After Cunningham fed Rozetta some grapes, there was an argument over who got which hooker. Wilkes, much to Cunningham's dismay, claimed the blond, named Tammy McFadden. Or as McFadden testified, "The one I ended up with was the one who was running the show."

And even though he wasn't paying, Cunningham apparently felt that he'd "got the short end of the straw." And indeed, Cunningham did ask for a different prostitute the next night. But Rozetta seems to have been none too impressed with Cunningham herself -- she identified him in the courtroom as the one with "heavy jowls and a puffy face."

But the real star yesterday for prosecutors was Wilkes' nephew Joel Combs, who was Wilkes' right hand man. Combs and Mitchell Wade, Wilkes' onetime colleague and then competitor, really comprise the foundation of the government's case. Earlier this week, Wade detailed about how all those gifts he gave to Cunningham really were bribes.

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Duke Cunningham

Admitted Briber Wade Takes The Stand

Paul Kiel | October 15, 2007, 10:09AM

Now we're getting somewhere. On Friday, Mitchell Wade took the stand.

He's the government's star witness in its case against Brent Wilkes, a defense contractor who says that the hundreds of thousands of dollars in gifts he gave to Cunningham weren't bribes: Wade's an admittedly dirty defense contractor who admits that all those gifts were intended as bribes.

It was a simple set-up, Wade testified. Once he found out that the secret to Wilkes' success as a contractor was Cunningham, he decided to get himself a piece. And sure enough, it worked. The downside? Keeping a congressman on the hook meant you had to spend time with the guy. From The San Diego Union-Tribune:

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Duke Cunningham

I'm with Stupid

Paul Kiel | October 11, 2007, 10:12AM

For a contractor, what's the best kind of congressman? The dumb and powerful variety.

The San Diego Union-Tribune on yesterday's proceedings in Brent Wilkes' trial for bribing Duke Cunningham:

Randal Kerley, a former Wilkes employee in the early days of ADCS, testified Wednesday morning that Wilkes was pleased when Cunningham was appointed to the appropriations committee.

“He thought it would be beneficial to us,” Kerley said about Wilkes.

When he asked why, Kerley said Wilkes responded, “He's not the brightest congressman up there. We can work with him.”

Must Read

Today's Must Read

Paul Kiel | October 10, 2007, 9:53AM

The $525,000 payment on Duke Cunningham's mortgage, the Sea-Doo Speedsters, the thousands of dollars of meals, the prostitutes, $12,000 worth of furniture... there's an "innocent explanation" for all of this, Brent Wilkes' lawyer Mark Geragos told a jury in his opening statement yesterday. Or as he put it himself: "Every single one of these transactions they're alleging is a bribe has an innocent explanation they don't want you to hear." By our count, that would be at least a couple dozen innocent explanations. And, boy, do we want to hear.

So it seems that Geragos is really going for the gold. Wilkes was just another defense contractor trying to make a living, he'll argue, and prosecutors have arbitrarily focused on him. Why? As Geragos argued: "You're going to find that everyone's got a little ax to grind here, not least the government, who seem to want to make this a referendum on how Washington works." More than $700,000 worth of gifts and payments in, $90 million in defense contracts out. That's how Washington works. And Geragos aims to prove it. Don't forget that he's already issued subpoenas to a dozen members of Congress, with special focus on five sitting lawmakers in particular.

From the opening statement, it's evident that another strategy of Geragos' will be to cast Mitchell Wade as the real bad guy here, relying, it seems, on Cunningham's semi-literate letter from prison to Marcus Stern, the reporter who broke the story. In that letter, other than complaining that Stern always focused on the bribery and not on the good things that Cunningham had achieved in his career (like "Library Man of the Year"), Cunningham announced that "truth will come out and you will find out how liablist [sic] you have & will be." It was a stirring example of denial. And the root for how it all went wrong, Cunningham argued, was that "absolute devil" Mitch Wade.

Of course, Cunningham's anger might have had a lot to do with the fact that Wade had been the first to go to the feds. And in a subsequent interview with the FBI, Cunningham gave a different story, detailing how he and Wilkes had hid various bribes in order not to arouse suspicion.

But that's Wilkes' story, and he's sticking to it. And he says that if prosecutors don't haul Cunningham out of jail to testify, then he's going to do it himself.

Let the show begin.

Brent Wilkes

"This Case Is All about Greed."

Paul Kiel | October 4, 2007, 10:03AM

Finally, Brent Wilkes' trial is under way:

"Lies, deceit, greed. Most of all greed. This case is all about greed," Assistant U.S. Attorney Phillip Halpern told jurors as he laid out the government's case in his opening statements....

"The evidence will show the politician was bought by the defendant lock, stock and barrel," Halpern said, adding that the bribes include "the truly astonishing," such as machine gun lessons and the services of prostitutes.

Among the expected witnesses are Duke Cunningham's former staffers, former Pentagon officials, and Wilkes' nephew, who's expected to give the most detail about how his uncle kept Cunningham in pocket. Cunningham is on the prosecutors' witness list, but apparently is not likely to be called.

Wilkes' lawyer Mark Geragos will make his opening statement next Tuesday -- when we'll finally hear how he plans to get his client off the hook.

Brent Wilkes

Wilkes: Leave The Hookers out of It

Paul Kiel | October 1, 2007, 1:22PM

Will Brent Wilkes beat the rap? Or has he said his last Boom Shaka Laka?

We'll soon find out. The trial for one of Duke Cunningham's favorite defense contractors is set to begin Wednesday, when Wilkes will try to convince a jury that the hundreds of thousands of dollars of gifts and payments that he gave Cunningham weren't bribes.

But Wilkes' lawyer Mark Geragos had a number of requests today before the trial gets started. Among them was a motion to preclude any evidence that Wilkes had provided Cunningham with prostitutes.

Geragos reasons that prosecutors are just out to dirty his client:

There is little probative value in presenting the testimony of professional call girls, persons admittedly in the business of regularly breaking the law and making a living through illegal vice. The real purpose of presenting that evidence is to sully Mr. Wilkes in the eyes of the jury. Mr. Wilkes was married during the alleged incident, and the government seeks to drag out a dirty story of adultery and vice, not to prove any element of the alleged offenses.

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