FBI Searches Home of California Congressman at Center of Federal Probe

By Seth Hettena Associated Press Writer

Published: Jul 1, 2005 SAN DIEGO (AP) - Federal agents on Friday searched the California home of U.S. Rep. Randy "Duke" Cunningham, along with the yacht in Washington, D.C., where he has been living, the FBI said.

Agents from the FBI, Internal Revenue Service and the Defense Department's criminal investigative service also searched the Washington offices of a defense firm whose founder bought the congressman's previous home, leading to a federal investigation, said Debra Weierman, a Washington FBI spokeswoman.

Cunningham, 63, has said that he showed poor judgment in selling the house, but he acted honestly and predicted that an investigation would prove that.

On Friday, a Cunningham spokesman said he did not know anything about the raids and referred all inquiries to the congressman's attorney, K. Lee Blalack, who did not immediately return a call for comment.

The former Navy "Top Gun" fighter pilot and eight-term Republican congressman sold his home in November 2003 to Mitchell Wade, a campaign contributor and close friend.

Wade paid $1.7 million for the 3,826-square-foot house in wealthy, seaside Del Mar, just north of San Diego. He put it back on the market soon after and eventually took a $700,000 loss when he resold it in October 2004. During that span, home prices in San Diego County rose an average of nearly 25 percent.

Meanwhile, Wade's little-known company, Washington, D.C.-based MZM Inc., was increasing its federal contracting business. In 2004, MZM tripled its revenue and nearly quadrupled its staff, according to the company's Web site.

Cunningham is a member of the House Appropriations Defense Subcommittee and the Permanent Select Committee on Intelligence, both of which oversee the kind of classified intelligence work MZM does for the military.

The U.S. Attorney's Office in San Diego is investigating the house sale with help from the FBI. Earlier this week, Cunningham's office disclosed that a federal grand jury has subpoenaed documents from him, though they declined to elaborate further.

Cunningham has also lived part-time on Wade's boat, docked on the Potomac River. He has said he agreed to pay dock fees and service and maintenance costs to Wade in lieu of rent to stay there. Living on Wade's boat without paying would violate congressional ethics rules.

The Defense Department halted orders this month on a five-year contract that provided MZM with $163 million of revenue over its first three years after the department's inspector general found that it did not satisfy rules on competitiveness.

This week, MZM announced that James King, a retired three-star Army general, was taking over as president and chief executive - a role held for years by Wade, who founded the company in 1993.

Associated Press Writers Erica Werner and Mark Sherman in Washington contributed to this report.

"I have seen no evidence" refers to the appraisal. Unless you have seen the comps, are familiar with the area, and are familiar with the principles of appraisal, you have seen no evidence either. The items cited are, at most, leads for investigation. Regarding the $ 13000 for rental of living space in a boat: what was the square footage? what are the comps? etc. This was not renting a yacht and crew to go sailing. This is apparently living in possibly cramped quarters. Maybe it was advantageous for the yacht owner to have someone he trusted living in the yacht to watch over it, and pay for and supervise the maintenance. You really don't know without waiting for the results of the investigation.

By the way, if you had many friends in various businesses, wouldn't you as likely as not, hire a friend rather than a stranger?

You can't give someone the power over hundreds of millions of dollars worth of contracts and pay them less than an orthodonist and then be shocked when stuff like this happens.

You can't? I'm sorry, but I must completely disagree. There is a little thing called character which can't be bought.

Representatives were elected by their countrymen to represent them, a high honor. Any one of them could have declined that office. Instead, most representatives actively seek the office. The honor of serving should be remuneration enough, but if you must, pay them no more than the median wage and expenses.

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