Skip to comments.Boat sale by 'Duke' made him $400,000 (Time to Resign)
Posted on 07/05/2005 10:10:41 AM PDT by Jimbaugh
Boat sale by 'Duke' made him $400,000
Buyer's kin were lenders of Cunningham mortgage By Jerry Kammer and Marcus Stern COPLEY NEWS SERVICE July 5, 2005
CITY ISLAND, N.Y. Rep. Randy "Duke" Cunningham made roughly a $400,000 profit by selling the boat he lived aboard in the nation's capital from 1997 to 2002 to a businessman convicted in a bid-rigging scheme. The man said he subsequently got advice from Cunningham about how to pursue a presidential pardon from the Bush administration.
The businessman further acknowledged that a mortgage company owned by his daughter and nephew provided Cunningham with two loans totaling $1.1 million so the congressman could buy his home in Rancho Santa Fe. The businessman said he eventually paid off one of those loans in partial payment for the yacht.
Cunningham bought the 65-foot flat-bottom riverboat Kelly C from then-Rep. Sonny Callahan, R-Ala., for $200,000 in 1997. Five years later, he sold the boat for $600,000 to Thomas Kontogiannis, the Long Island businessman said yesterday.
Kontogiannis defended the $600,000 price tag as "a steal," saying that he had received an appraisal for twice that amount.
The Kontogiannis family is a frequent contributor to Republican causes, including a $300 contribution to Cunningham in July 2002, the year of the sale.
Cunningham's financial dealings in recent weeks have embroiled him in a multitiered federal investigation and cast a shadow over his Washington career.
In a series of interviews with Copley News Service yesterday, Kontogiannis confirmed that he bought Cunningham's boat and that the congressman offered to help him explore the possibility of seeking a pardon from President Bush and the Justice Department. Cunningham then put him in touch with a Washington law firm and recommended "two or three" lawyers to talk to, said the businessman.
"I said I have this problem and I was wondering if I can get a pardon out of it," said the 56-year-old real estate developer, who has more than a dozen companies. "He (Cunningham) said to me, 'I know nothing about these things, but I'll find the proper law firm and I'll let you know if they can help you.' "
Kontogiannis was among four people and five corporations pleading guilty in October 2002 to kickback and bribery charges in connection with a$6.3 million bid-rigging scheme involving contracts to provide computer services to New York public schools. Kontogiannis owned three of the companies. The defendants were ordered to repay the school board $4.8 million.
Kontogiannis said he went to Washington and talked to the law firm recommended by the congressman. But he said he then dropped the idea. "It's not worth the aggravation," he said, describing the process as too complicated.
U.S. Coast Guard records do not reflect the sale of the Kelly C from Cunningham to Kontogiannis, showing Cunningham as the boat's owner since 1997.
Kontogiannis said he never registered the yacht in his name because it is not seaworthy and he knew he would not be able to take it out on the ocean in its current condition.
He confirmed that he and Cunningham had talked about the congressman buying it back from him, at a price he did not disclose. But Kontogiannis said he dropped that idea when he saw how expensive it would be to acquire an ocean-worthy yacht.
That change of mind came after Cunningham visited the shipyard here with a long list of repairs to be made, but just before Cunningham became engulfed in controversies over his sale of his Del Mar-area house to Mitchell Wade, a defense contractor, who later resold the house at a $700,000 loss.
Cunningham's dealings with Wade are the subject of FBI and federal grand jury investigations.
Wade is the founder of MZM Inc., a Washington, D.C.-based company which has received $163 million in defense contracts since 2002. Cunningham, a member of the influential House defense appropriations subcommittee and Permanent Select Committee on Intelligence, has said that he supported funding requests benefiting MZM. Cunningham also has lived aboard Wade's 42-foot yacht, the Duke-Stir, since April 2004 in the same slip once occupied by the Kelly C.
Federal agents executed search warrants Friday at Cunningham's Rancho Santa Fe home, MZM's headquarters and Wade's yacht.
The boat at the center of this latest storm to rock Cunningham today sits forlornly on blocks in the shipyard of Consolidated Yachts at the end of Pilot Street not far from the Neptune Inn and Sammy's Fish Box restaurant.
Though gussied up recently with fresh coats of white paint and what Kontogiannis said was a $100,000 refurbishing overseen by his wife, the boat is far from ready for much ocean travel, according to workers at the shipyard.
Its last sea voyage came with Cunningham at the helm. That was late in 2002 when Cunningham delivered it to the Glen Cove Marina near here, according to Joe Weiser, Glen Cove's owner.
"He brought it here himself," Weiser said of Cunningham. "He gave me a picture of himself in his flight outfit."
Cunningham was a decorated pilot in Vietnam.
Attempts to reach Cunningham attorneys K. Lee Blalack and Mark Holscher for comment last night were unsuccessful. Nor did Cunningham spokesman Mark Olson respond to calls to his cell phone.
Kontogiannis said there is no comparison between the sale of Cunningham's Del Mar-area house to Wade and the sale of the Kelly C.
"There is no reason for me to avoid something. Everything is plain and simple for me," he said, adding about Cunningham's problems with MZM, "I don't know what the problem is that they have out there, but that is their problem."
The developer confirmed that a mortgage company owned by his daughter and nephew, Coastal Capital, provided the mortgage loans to the congressman when he bought his $2.55 million home in Rancho Santa Fe.
He insisted the loans were at "normal rates." Kontogiannis said he earlier this year paid off a $500,000 second mortgage on that home, primarily using money he said he owed Cunningham for the yacht.
"We accumulated all the money and paid the second mortgage off . . . on the fifteenth of March," he said.
Cunningham never listed the mortgage debt on his congressional financial disclosure forms, though he was not required to do so. (Members of Congress are are not required to list or provide details on their personal residences or personal property.)
Kontogiannis said the rate on the $500,000 loan was about 10 percent and the rate on a $595,000 loan was "maybe around 6 or 6¼."
Weiser said the Kelly C, whose twin engines are considered too small for a 65-foot yacht, never left its slip. Kontogiannis agreed that the flat-bottomed boat could not handle the ocean, and said he used it primarily for dockside parties.
"It's basically a party barge," said marina mechanic Wes Iencierz. "It's something you'd take out into a river, drop an anchor and have a party."
Iencierz confirmed yesterday that six weeks ago Cunningham showed up at the marina with his own mechanic in tow, clearly indicating that he intended to buy it back. Cunningham's mechanic handed him a long list of needed repairs.
Shipyard employees had derided the Kelly C when it arrived at the Glen Cove Marina around August 2002 because of its poor mechanical condition. The boat was rarely used while berthed at Glen Cove, according to marina employees.
Aboard the yacht yesterday, the repair list or a similar list could still be seen on the boat, which rests on wood blocks stacked three-high and is held aloft by adjustable metal braces.
The door to the interior has a stylized "C" etched in the glass and the signs of the $100,000 refurbishing could be seen in the blue carpeting, leather coach and well-crafted wood bar.
The list of repairs included work on engine impellers, running lights, the anchor light and the filters.
The co-owner of Consolidated Yachts clearly was uncertain about the future of the boat now that Cunningham has removed himself from the picture. "I could get stuck with the damn thing," said Wesly L. Rodstrom Jr. He said he called Cunningham called only a few days ago either Thursday or Friday to find out what was going on. "He said, 'Oh, I've got nothing to do with the boat.' "
-------------------------------------------------------------------------------- Contributing to this story was Copley News Service correspondent George E. Condon Jr. in Washington.
Find this article at: http://www.signonsandiego.com/news/metro/20050705-9999-1n5duke.html
Good 'Ole Duke, up on Capitol hill, stuffing his pockets with the best of 'em.
Sometimes it seems like corruption is more the norm than the exception in government anymore.
It is amazing how the cesspool that is Congress captures nearly everyone that enters, Republican or Democrat.
I grew up reading about his exploits as a pilot, but it is time for him to go.
More than that. Cunning ham was Da Man in 'Nam. He was an ace in a war that produced only a few American aces, and there's evidence that one of the guys he shot down was a North Vietnamese ace.
Phantom Showtime by Robert Taylor. Cunningham and his backseater Willie Irish Driscoll make a 500 knot pass by USS Constellation after shooting down their first MiG. VF-96 pilots went by the "Showtime" callsign.
Here's Hasegawa's 1/48 scale model of Cunningham's bird, which I intend to build after I clear my massive backlog of kits.
Here's the box art for the kit, as Cunningham rolls into position to shoot a Sidewinder...
...and get a kill. This pic is "Showtime 100" by Phillip West.
Cunningham was an amazing pilot, and a perfect example of what one German WWI ace said: "It is the skill of the pilot, not the crate that he flies, which matters." Sorry for any F-4 fans, but as much as I love the ol' Rhino, it was a wallowing pig in a dogfight compared to the MiGs it was put up against.
That said...if Duke is as dirty as he now looks, he needs to do one thing, the only thing that would be best for himself, his constituents, his party and his country:
EJECT! EJECT! EJECT!
See post 4. Hope Hasegawa doesn't stop selling that kit! ;-)
While I agree Cunningham should go if he is guilty of anything, this one sounds more like a media smear campaign. If you look at exactly what happened, essentially Cunningham sold his boat to a Republican businessman he knew. The businessman than asked Cunningham about a pardon, and he recommended a few law firms. I can hardly even see anything that is ethically questionable here.
Yes, and Mr. Silverback put up some great paintings from his career in post 4. I read that his fifth kill was the well known Vietnamese ace, but I am not sure if that claim held up.
I'll agree that he should resign if every Democrat that has done this resigns as well.
If the boat was indeed used as housing in the DC area, I'm not at all surprised that it sold for a 200% profit in fivwe years...
There are a limited number of slips in the DC harbors, but if you buy a boat there you can keep the slip - which is worth a lot in convenience.
Thomas Kontogiannis should have hired Roger Clinton or one of Hillary's brothers if he wanted a pardon. No one would have noticed an extra in this group...
ALLEN, Verla Jean Everton, Arkansas False statements to agency of United States
ALTIERE, Nicholas M. Las Vegas, Nevada Importation of cocaine
ALTSCHUL, Bernice Ruth Sherman Village, California Conspiracy to commit money laundering
ANDERSON, Joe, Jr. Grove Hill, Alabama Income tax evasion
ANDERSON, William Sterling Spartanburg, South Carolina Conspiracy to defraud a federally insured financial institution, false statements to a federally insured financial institution, wire fraud
AZIZKHANI, Mansour T. Huntsville, Alabama Conspiracy and making false statements in bank loan applications
BABIN, Cleveland Victor, Jr. Oklahoma City, Oklahoma Conspiracy to commit offense against the United States by utilizing the U.S. mail in furtherance of a scheme to defraud
BAGLEY, Chris Harmon Harrah, Oklahoma Conspiracy to possess with intent to distribute cocaine
BANE, Scott Lynn Mahomet, Illinois Unlawful distribution of marijuana
BARBER, Thomas Cleveland Hampton, Florida Issuing worthless checks
BARGON, Peggy Ann Monticello, Illinois Violation of the Lacey Act, violation of the Bald Eagle Protection Act
BHATKA, Tansukhlal Income tax evasion
BLAMPIED, David Roscoe Ketchum, Idaho Conspiracy to distribute cocaine
BORDERS, William Arthur, Jr. Washington, D.C. Conspiracy to corruptly solicit and accept money in return for influencing the official acts of a federal district court judge (Alcee L. Hastings), and to defraud the United States in connection with the performance of lawful government functions; corruptly influencing, obstructing, impeding and endeavoring to influence, obstruct and impede the due administration of justice, and aiding and abetting therein; traveling interstate with intent to commit bribery
BOREL, Arthur David Little Rock, Arkansas Odometer rollback
BOREL, Douglas Charles Conway, Arkansas Odometer rollback
BRABHAM, George Thomas Austin, Texas Making a false statement or report to a federally insured bank
BRASWELL, Almon Glenn Doravilla, Georgia Conspiracy to defraud government with respect to claims; perjury
BROWDER, Leonard Aiken, South Carolina Illegal dispensing of controlled substance and Medicaid fraud
BROWN, David Steven New York, New York Securities fraud and mail fraud
BURLESON, Delores Caroylene, aka Delores Cox Burleson Hanna, Oklahoma Possession of marijuana
BUSTAMANTE, John H. Cleveland, Ohio Wire fraud
CAMPBELL, Mary Louise Ruleville, Mississippi Aiding and abetting the unauthorized use and transfer of food stamps
CANDELARIA, Eloida False information in registering to vote
CAPILI, Dennis Sobrevinas Glendale, California Filing false statements in alien registration
CHAMBERS, Donna Denise Memphis, Tennessee Conspiracy to possess with intent to distribute and to distribute cocaine, possession with intent to distribute cocaine, use of a telephone to facilitate cocaine conspiracy
CHAPMAN, Douglas Eugene Scott, Arkansas Bank fraud
CHAPMAN, Ronald Keith Scott, Arkansas Bank fraud
CHAVEZ, Francisco Larios Santa Ana, California Aiding and abetting illegal entry of aliens
CISNEROS, Henry G.
COHN, Stuart Harris New Haven, Connecticut 1. Illegal sale of gold options
2. Illegal sale of silver options
COOPER, David Marc Wapakoneta, Ohio Conspiracy to defraud the government
COX, Ernest Harley, Jr. Pine Bluff, Arkansas Conspiracy to defraud a federally insured savings and loan, misapplication of bank funds, false statements
CROSS, John F., Jr. Little Rock, Arkansas Embezzlement by a bank employee
CUNNINGHAM, Rickey Lee Amarillo, Texas Possession with intent to distribute marijuana
DE LABIO, Richard Anthony Baltimore, Maryland Mail fraud, aiding and abetting
DEUTCH, John Described in January 19, 2001 information
DOUGLAS, Richard False statements
DOWNE, Edward Reynolds Conspiracy to commit wire fraud and tax evasion; securities fraud
DUDLEY, Marvin Dean Omaha, Nebraska False statements
DUNCAN, Larry Lee Branson, Missouri Altering an automobile odometer
FAIN, Robert Clinton Aiding and assisting in the preparation of a false corporate tax return
FERNANDEZ, Marcos Arcenio Miami, Florida Conspiracy to possess with intent to distribute marijuana
FERROUILLET, Alvarez Interstate transport of stolen property, money laundering, false statements
FUGAZY, William Denis Harrison, New York Perjury in a bankruptcy proceeding
GEORGE, Lloyd Reid Mail fraud
GOLDSTEIN, Louis Las Vegas, Nevada Possession of goods stolen from interstate shipment
GORDON, Rubye Lee Tampa, Florida Forgery of U.S. Treasury checks
GREEN, Pincus Switzerland
HAMNER, Robert Ivey Searcy, Arkansas Conspiracy to distribute marijuana, possession of marijuana with intent to distribute
HANDLEY, Samuel Price Hodgenville, Kentucky Conspiracy to steal government property
HANDLEY, Woodie Randolph Hodgenville, Kentucky Conspiracy to steal government property
HARMON, Jay Houston Jonesboro, Arkansas 1. Conspiracy to import marijuana, conspiracy to possess marijuana with intent to distribute, importation of marijuana, possession of marijuana with intent to distribute
2. Conspiracy to import cocaine
HEMMINGSON, John Interstate transport of stolen property, money laundering
HERDLINGER, David S. St. Simons Island, Georgia Mail fraud
HUCKLEBERRY, Debi Rae Ogden, Utah Distribution of methamphetamine
JAMES, Donald Ray Fairfield Bay, Arkansas Mail fraud, wire fraud, and false statement to a bank to influence credit approval
JOBE, Stanley Pruet El Paso, Texas Conspiracy to commit bank fraud, and bank fraud
JOHNSON, Ruben H. Austin, Texas Theft and misapplication of bank funds by a bank officer or director
JONES, Linda Conspiracy to commit bank fraud and other offenses against the United States
LAKE, James Howard Illegal corporate campaign contributions, wire fraud
LEWIS, June Louise Lowellville, Ohio Embezzlement by a bank employee
LEWIS, Salim Bonnor Short Hills, New Jersey Securities fraud, record keeping violations, margin violations
LODWICK, John Leighton Excelsior Springs, Missouri Income tax evasion
LOPEZ, Hildebrando San Isidro, Texas Distribution of cocaine
LUACES, Jose Julio Ft. Lauderdale, Florida Possession of an unregistered firearm
MANESS, James Timothy Conspiracy to distribute a controlled substance
MANNING, James Lowell Little Rock, Arkansas Aiding and assisting in the preparation of a false corporate tax return
MARTIN, John Robert Gulf Breeze, Florida Income tax evasion
MARTINEZ, Frank Ayala Elgin, Texas Conspiracy to supply false documents to the Immigration and Naturalization Service
MARTINEZ, Silvia Leticia Beltran Elgin, Texas Conspiracy to supply false documents to the Immigration and Naturalization Service
McCORMICK, John Francis Dedham, Massachusetts Racketeering conspiracy, racketeering, and violation of the Hobbs act
McDOUGAL, Susan H.
MECHANIC, Howard Lawrence 1. Violating the Civil Disobedience Act of 1968
2. Failure to appear
3. Making false statement in acquiring a passport
MITCHELL, Brook K., Sr. Conspiracy to illegally obtain USDA subsidy payments, false statements to USDA, and false entries on USDA forms
MORGAN, Charles Wilfred, III Little Rock, Arkansas Conspiracy to distribute cocaine
MORISON, Samuel Loring Crofton, Maryland Willful transmission of defense information, unauthorized possession and retention of defense information, theft of government property
NAZZARO, Richard Anthony Winchester, Massachusetts Perjury and conspiracy to commit mail fraud
NOSENKO, Charlene Ann Phoenix, Arizona Conspiracy to defraud the United States, and influencing or injuring an officer or juror generally
OBERMEIER, Vernon Raymond Belleville, Illinois Conspiracy to distribute cocaine, distribution of cocaine, and using a communications facility to facilitate distribution of cocaine
OGALDE, Miguelina Glendale, California Conspiracy to import cocaine
OWEN, David C. Olathe, Kansas Filing a false tax return
PALMER, Robert W. Little Rock, Arkansas Conspiracy to make false statements
PERHOSKY, Kelli Anne Bridgeville, Pennsylvania Conspiracy to commit mail fraud
PEZZOPANE, Richard H. Palo Heights, Illinois Conspiracy to commit racketeering, and mail fraud
PHILLIPS, Orville Rex Waco, Texas Unlawful structure of a financial transaction
POLING, Vinson Stewart, Jr. Baldwin, Maryland Making a false bank entry, and aiding and abetting
PROUSE, Norman Lyle Conyers, Georgia Operating or directing the operation of a common carrier while under the influence of alcohol
PRUITT, Willie H. H., Jr. Port Richey, Florida Absent without official leave
PURSLEY, Danny Martin, Sr. Goodlettsville, Tennessee Aiding and abetting the conduct of an illegal gambling business, and obstruction of state laws to facilitate illegal gambling
RAVENEL, Charles D. Charleston, South Carolina Conspiracy to defraud the United States
RAY, William Clyde Altus, Oklahoma Fraud using a telephone
REGALADO, Alfredo Luna Pharr, Texas Failure to report the transportation of currency in excess of $10,000 into the United States
RICAFORT, Ildefonso Reynes Houston, Texas Submission of false claims to Veterans Administration
RICH, Marc Switzerland
RIDDLE, Howard Winfield Mt. Crested Butte, Colorado Violation of the Lacey Act (receipt of illegally imported animal skins)
RILEY, Richard Wilson, Jr. Possession of cocaine with intent to distribute
ROBBINS, Samuel Lee Cedar Park, Texas Misprision of a felony
RODRIGUEZ, Joel Gonzales Houston, Texas Theft of mail by a postal employee
ROGERS, Michael James McAllen, Texas Conspiracy to possess with intent to distribute marijuana
ROSS, Anna Louise Lubbock, Texas Distribution of cocaine
RUST, Gerald Glen Avery, Texas False declarations before grand jury
RUST, Jerri Ann Avery, Texas False declarations before grand jury
RUTHERFORD, Bettye June Albuquerque, New Mexico Possession of marijuana with intent to distribute
SANDS, Gregory Lee Sioux Falls, South Dakota Conspiracy to distribute cocaine
SCHWIMMER, Adolph Conspiracy to commit an offense against the United States, conspiracy to export arms and ammunition to a foreign country and related charges
SERETTI, Albert A., Jr. McKees Rocks, Pennyslvania Conspiracy and wire fraud
SHAW, Patricia Campbell Hearst Wilton, Connecticut Armed bank robbery and using a firearm during a felony
SMITH, Dennis Joseph Redby, Minnesota 1. Unauthorized absence
2. Failure to obey off-limits instructions
3. Unauthorized absence
SMITH, Gerald Owen Florence, Mississippi Armed bank robbery
SMITH, Stephen A.
SPEAKE, Jimmie Lee Breckenridge, Texas Conspiracy to possess and utter counterfeit $20 Federal Reserve notes
STEWART, Charles Bernard Sparta, Georgia Illegally destroying U.S. Mail
STEWART-ROLLINS, Marlena Francisca Euclid, Ohio Conspiracy to distribute cocaine
SYMINGTON, John Fife, III
TANNEHILL, Richard Lee Reno, Nevada Conspiracy and restraint of trade
TENAGLIA, Nicholas C. Lafayette Hill, Pennsylvania Receipt of illegal payments under the Medicare program
THOMAS, Gary Allen Lancaster, Texas Theft of mail by postal employee
TODD, Larry Weldon Gardendale, Texas Conspiracy to commit an offense against the U.S. in violation of the Lacey Act and the Airborne Hunting Act
TREVINO, Olga C. Converse, Texas Misapplication by a bank employee
VAMVOUKLIS, Ignatious Exeter, New Hampshire Possession of cocaine
VAN DE WEERD, Patricia A. Tomahawk, Wisconsin Theft by a U.S. Postal employee
WADE, Christopher V.
WARMATH, Bill Wayne Walls, Mississippi Obstruction of correspondence
WATSON, Jack Kenneth Oakridge, Oregon Making false statements of material facts to the U.S. Forest Service
WEBB, Donna Lynn Panama City, Florida False entry in savings and loan record by employee
WELLS, Donald William Phenix City, Alabama Possession of an unregistered firearm
WENDT, Robert H. Kirkwood, Missouri Conspiracy to effectuate the escape of a federal prisoner
WILLIAMS, Jack L. Making false statements to federal agents
WILLIAMS, Kevin Arthur Omaha, Nebraska Conspiracy to distribute and possess with intent to distribute crack cocaine
WILLIAMS, Robert Michael Davison, Michigan Conspiracy to transport in foreign commerce securities obtained by fraud
WILSON, Jimmie Lee Helena, Arkansas Converting property mortgaged or pledged to a farm credit agency, and converting public money to personal use
WINGATE, Thelma Louise Sale City, Georgia Mail fraud
WOOD, Mitchell Couey Sherwood, Arkansas Conspiracy to possess and to distribute cocaine
WOOD, Warren Stannard Las Vegas, Nevada Conspiracy to defraud the United States by filing a false document with the Securities and Exchange Commission
WORTHEY, Dewey Conway, Arkansas Medicaid fraud
YALE, Rick Allen Belleville, Illinois Bank fraud
YASAK, Joseph A. Chicago, Illinois Knowingly making under oath a false declaration regarding a material fact before a grand jury
YINGLING, William Stanley Interstate transportation of stolen vehicle
YOUNG, Phillip David Little Rock, Arkansas Interstate transportation and sale of fish and wildlife
I was thinking the same thing, recommending some lawyers is not unethical. There was no quid pro quo, maybe some bad business deals, but no quid pro quo.
This is just one in a growing series of 'issues' coming to light about Duke. (1) His home sale to a defence contrator who he voted to give money to. (2) His use of the contrators boat as a residence for a minimal fee. (3) His use of the Congressional seal for personal profit. (4) This latest 'issue' regarding his boat sale...that made him a nice $400,000 profit.
At some point, it starts to look like he either is on the take or does not have the judgement to be a Congressman. Either way, I am not satisfied.
Wouldn't want logic to get in the way of the lynch mob now would you!!!
If he resigns....any thoughts on who might run?
My daughter's two bedroom apartment was bigger than that house.
I live in Gaithersburg, MD -- we bought a townhouse in 2000 for $185k, neighboring units are selling for $400k-460k today.
They're still defending the Hero of Chappaquidick (sp.?).
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