Mitchell J. Wade
Posted on 02/24/2006 1:33:20 PM PST by NormsRevenge
WASHINGTON – Defense contractor Mitchell J. Wade pleaded guilty in federal court Friday to conspiring to funnel more than $1 million in bribes to former Rep. Randy “Duke” Cunningham.
Wade, 46, admitted to his part in a payoff scheme intended to win federal contracts for his firm, MZM Inc., that included an attempt to bribe a Pentagon official.
Wade's sweetheart purchase of Cunningham's Del Mar-area house figured prominently in the ex-congressman's own guilty plea last fall. Wade bought Cunningham's house for $1.67 million in November 2003 and then sold it eight months later at a $700,000 loss.
The businessman began providing information to the government shortly after the sham home sale was disclosed in a Copley News Service article published June 12, 2005 in The San Diego Union-Tribune.
Dressed in a gray suit, Wade choked up briefly as he read the court a prepared statement in which he expressed remorse and acknowledged his cooperation with federal investigators.
“I feel deep sorrow for the harm I've caused to my family, friends and former colleagues,” Wade told U.S. District Court Judge Richardo Urbina.
Wade pleaded guilty to two counts of conspiracy and single counts of using interstate facilities to promote bribery and of election fraud. He faces a possible 11-year prison sentence, and the judge also outlined a formula for what would appear to be a huge fine. No sentencing date has been set.
One of the conspiracy counts involved a sweeping bribery plot with Cunningham during which they violated federal tax evasion, mail fraud and wire fraud laws.
Not named in Friday's proceedings was Brent Wilkes, president of Poway-based ADCS, Inc. Wilkes was identified along with Wade as a conspirator in the Cunningham case.
Wade's plea deal enabled prosecutors to bypass the more normal route of an investigation by a federal grand jury.
Bribes and contributions
As outlined by prosecutors in court documents, Wade curried favor with the congressman by buying his residence at an inflated price, paying Cunningham $13,500 for the purchase of a Rolls Royce, and making a $140,000 payment that made a yacht available to the congressman “for his use and enjoyment.” Cunningham lived on the yacht rent-free, using it as his home in the capital.
Wade also bought Cunningham a treasure trove of antiques, rare furnishings and Persian rugs, including two 19th century cabinets that cost $7,200,
In a summary of the prosecution's case, Assistant U.S. Attorney Howard R. Sklamberg also disclosed that Wade made about $80,000 in illegal campaign contributions in 2004 and 2005 to two members of Congress he did not name. The lawmakers were targeted because they had the potential to steer federal contracts to MZM.
The court documents indicate neither of the lawmakers was told that the contributions were illegal.
A campaign finance watchdog group, Citizens for Responsibility and Ethics in Washington, and political rivals have asked Rep. Virgil Goode, R-Va., to return contributions made by MZM employees. Another recipient of MZM-linked campaign funds was Rep. Katherine Harris, R-Fla.
Goode has given away more than $90,000 in campaign contributions linked to MZM.
Neither Goode nor Harris was named in Friday's proceedings
Prosecutors said Wade circumvented federal campaign law that bans corporation contributions and restricts an individual to gifts of $2,000 per election. He did so by handing employees $2,000 in cash and then asking them to make contributions to candidates designated by Wade, prosecutors said.
Sklamberg also said that Wade had discussions with a Defense Department official – whom Sklamberg did not identify – about projects that would benefit Wade's firm.
Links to Pentagon
In order to ease his path to individual contracts, Wade hired the son of a key Pentagon official. Wade also offered a job to a Defense Department official who was responsible for overseeing much of MZM's work. The person, who was not identified in prosecution documents, was ultimately hired by MZM.
One instance cited in a court document describes how Wade asked a congressman for funding for a MZM facility. He ended up with a $9 million appropriation earmarked for that purpose.
Wade's schemes resulted in MZM's dramatic growth as the company won more than $150 million in Defense Department contracts beginning in 2002. He did so in part by exploiting a Defense Department blanket purchase agreement program, which allows the Pentagon to obtain supplies and services on an as-needed basis, much as though it was a charge account.
The arrangement enabled MZM to receive up to $225 million in Pentagon funding, while being shielded from competitive bidding.
Wade severed his ties to MZM after stories in the Union-Tribune and, subsequently, in other newspapers, disclosed his financial dealings with Cunningham.
The proceedings occurred a few blocks from the Capital Grille restaurant, where federal prosecutors said that Wade and other defense contractors routinely and lavishly entertained the Republican lawmaker, an ace fighter pilot during the Vietnam War.
Cunningham, who was first elected to Congress in 1990, most recently represented an area that extended from Carlsbad to Escondido and included portions of northern San Diego.
He resigned his office on Nov. 28, the same day he admitted his guilt in a San Diego federal courtroom, pleading guilty to tax evasion, conspiracy to commit bribery and honest services fraud.
Cunningham is scheduled to be sentenced next Friday. Prosecutors – who have called Cunningham's acceptance of $2.4 million in bribes “unparalleled corruption” – are recommending the maximum 10-year sentence.
He has been living on a friend's ranch in Lakeside.
Federal prosecutors are believed to also be investigating the relationship between Cunningham and Wilkes. Another target is believed to be Thomas Kontogiannis, a 56-year-old businessman, who has been convicted of bribing a visa officer at the U.S. Embassy in Athens.
The charges (20 pages PDF)
Wade plea document (PDF)
Wade press release (PDF)
i assume there are folks who think this sort of thing is the exception, not the rule.
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