Scandals, Wilkes, Wade and Cunningham
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Rep. John T. Doolittle
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Randal 'LEE' Cunningham
Born: December 8, 1941 in Los Angeles, CA.
Married: Susan Albrecht (1965-1973), Nancy D. Jones (1974-Present)
Children: April Dianna, Carrie Melissa, & Randall Todd
2005: Cunningham resigned from Congress
Legal Troubles: After a several-month investigation, Cunningham pleaded guilty to accepting $2.4 million in bribes in exchange for arranging government contracts. According to the Federal Bureau of Prisons, Cunningham's release date is scheduled to be June 4, 2013. In January 2007, Cunningham was been transferred from FCI Butner Low (Federal Correctional Institution) to USP Tucson (U.S. Penitentiary). In July 2007, Cunningham was transferred to MCC San Diego (Metropolitan Correctional Center). He is now back at USP Tucson.
Mailing Address at MCC USP Tucson:
Randall Cunningham 94405-198
P.O. Box 24550
Tucson, AZ 85734
NOTE: "The Duke Cunningham Act, previously known as the Federal Pension Forfeiture Act, would deny pension benefits to any members of Congress convicted of bribery, conspiracy or perjury."
Cunningham financier faces more legal woes. Kontogiannis, serving time for role in scandal, is set to be sentenced in mortgage scheme. He faces up to 30 years in prison, but his lawyer said he should be given a sentence to run concurrently with his punishment in the Cunningham case. Kontogiannis is in “dire” condition in a federal medical facility in Devens, Mass., and is contrite about his crimes, the attorney, Gregory O’Connell, wrote in court papers. That contrition appears to have its limits. In a 2009 deposition in an unrelated civil suit, Kontogiannis said he never read details of the guilty plea he signed in the Cunningham case. He also hinted that he got a stiff sentence because he would not turn against other unnamed congressmen. “This was done between lawyers,” he said of the plea agreement, according to a transcript of the deposition. “And — and the idea was I was going to get a slap in the hand and I was going to go on about my business, but I didn’t want to testify against other congressmen. That’s why I’m here.” Kontogiannis’ comments are similar to those Cunningham made this year from prison in Tucson. The Republican formerly from Rancho Santa Fe said he never took bribes and also blamed his lawyers for telling him to sign a plea agreement he did not read. Like the Cunningham case, the mortgage scam has earned Kontogiannis another piece of legal infamy. Assistant U.S. Attorney Jonathan Green said in court papers for the July 19 sentencing hearing that Kontogiannis “masterminded the largest mortgage origination fraud on record.” Court records show that the fraud involved straw buyers, false loan files, bogus appraisals and fake title reports, all done to stage sales of properties with mortgage loans that were eventually sold to big lenders in the secondary mortgage market. http://www.signonsandiego.com/news/2011/jun/27/cunningham-financier-faces-more-legal-woes/
Cunningham now Inmate 94405-198 http://www.nctimes.com/articles/2006/03/07/news/top_stories/20_09_283_6_06.txt
Randy "Duke" Cunningham, Republican http://www.joincalifornia.com/candidate/5946
Cunningham serving sentence at prison work camp in Tucson http://www.signonsandiego.com/news/politics/cunningham/20070214-9999-1n14duke.html
Charges looming for Wilkes, friend
In rare memo, judge rips prosecutors. A previously sealed court filing from a federal judge in San Diego criticized prosecutors for inaccurately describing the details surrounding the secret guilty plea of a figure in the Randy “Duke” Cunningham scandal. In a highly unusual move, U.S. District Judge Larry Burns sent a 15-page brief of his own to the 9th U.S. Circuit Court of Appeals, curtly noting that the court filings of prosecutors “mischaracterizes substantial, relevant portions” of the case. The brief by Burns also reveals some new details about the guilty plea of Thomas Kontogiannis, a Long Island financier who pleaded guilty to money laundering during a highly unusual secret hearing in February 2007. Kontogiannis was cooperating with federal officials in an “investigation implicating national security,” Burns wrote. And he was cooperating with Justice Department lawyers from the Southern District of New York – not, as some thought at the time, with prosecutors in San Diego. http://www.signonsandiego.com/uniontrib/20081102/news_1m2plea.html http://www.signonsandiego.com/news/metro/images/081031tommykbrief.pdf
Probation for minor figure in bribe case. Michael had link to Cunningham scandal. Michael pleaded guilty in February to one count of conspiracy to commit money laundering and to a second count of lying about it to a grand jury probing the web of relationships that tied Cunningham and five other people in what has been called the biggest congressional bribery scandal in history. In late 2004, Michael processed a $525,000 mortgage that was a key component of a larger money-laundering plan intended to hide the fact that the funds were a bribe to Cunningham from Poway defense contractor Brent Wilkes. The bribe was used by the then-congressman to help purchase a Rancho Santa Fe mansion. Wilkes was convicted of plying Cunningham with bribes in exchange for his efforts to get lucrative defense contracts for Wilkes's Poway company. http://www.signonsandiego.com/uniontrib/20081003/news_1m3michael.html
Former Poway defense contractor Wilkes freed for graduation ceremony. Former Poway defense contractor Brent Wilkes was let out of jail for one night Thursday so he could attend the high school graduation of his daughter. The unusual, though not unprecedented, move by U.S. District Judge Larry Burns came after Wilkes penned a personal plea to the judge on Monday and over objections from prosecutors at a hearing Thursday morning. http://www.signonsandiego.com/news/metro/20080612-1831-bn12wilkes.html
Judge in Cunningham-linked case rejects secrecy. He also denies bid to cut Wilkes' bail. Late Monday afternoon, Burns rejected a request for lower bail from Wilkes, the contractor convicted of bribing Cunningham and sentenced to 12 years in prison. In March, the appeals court had ordered that Wilkes be allowed release on bail pending his appeal. Burns said he would accept real estate and retirement accounts from Wilkes' brother and sister-in-law as collateral, but only if they recognized that they might have to pay upward of $100,000 in taxes. Using the retirement accounts as collateral might count as a disbursement under federal tax laws and trigger a tax bill, the judge said. The couple changed their minds, saying in court filings they didn't trust the judge or the criminal justice system. As a result, Wilkes didn't have the $1.4 million collateral for the $2 million bond that Burns required. Wilkes' attorney asked Burns to lower bail to about $500,000, and accused prosecutors of intimidating Wilkes' family with tax consequences. Burns didn't budge. Cunningham, the former Republican congressman from Rancho Santa Fe, pleaded guilty in November 2005 to charges of conspiracy and tax evasion in the case that centered on his receiving bribes in return for influencing the awarding of defense contracts. Cunningham is serving an eight-year and four-month sentence in a prison near Tucson. http://www.signonsandiego.com/uniontrib/20080604/news_1m4michael.html
Judge sets bail terms for Wilkes Poway businessman Brent Wilkes, convicted of bribing U.S. Rep. Randy "Duke" Cunningham, could get out of federal custody as early as next week and go home to await the outcome of his appeal under terms a San Diego judge set Friday. Following a ruling from the 9th U.S. Circuit Court of Appeals, District Judge Larry Burns said he had changed his mind regarding collateral for bail. He said he will accept retirement accounts from Brent Wilkes' relatives and the value of a Chula Vista house that his nephew owns. But Burns said he wants to make sure Wilkes' brother and sister-in-law know they could face a hefty tax bill if they pledge the accounts. He also said he would let federal prosecutors re-appraise the house. Prosecutors believe the house is worth less than Wilkes says it is. The 9th Circuit has overturned earlier rulings by Burns rejecting bail and preventing Wilkes from using retirement accounts as collateral. In November, a jury convicted Wilkes of bribing Cunningham with gifts, trips, meals and cash in exchange for defense contracts. He also was found guilty of conspiracy, fraud and money laundering. In February, Burns sentenced him to 12 years in prison. http://www.signonsandiego.com/news/breaking/2008/05/judge_sets_bail_terms_for_wilk.html
Wilkes makes appeal for immediate release. Bail requirements still not satisfied. A month after a federal appeals court said Brent Wilkes could be free on bail while trying to reverse his bribery convictions, not much has changed for the former Poway defense contractor. He is still in a downtown San Diego federal jail, unable to satisfy bail requirements from U.S. District Judge Larry Burns to secure his release. As a result, Wilkes is back before the 9th U.S. Circuit Court of Appeals, asking that court to order his immediate release based on the amount of collateral for bail he has been able to pull together. The emergency appeal, filed Thursday, comes after two hearings in front of Burns over the past month where Wilkes fell short of securing $1.4 million in collateral for a $2 million bail Burns has set. That was the same bail amount that was set when Wilkes was indicted and eventually convicted of 13 charges of bribery, conspiracy, money laundering and fraud. Federal prosecutors said he showered gifts and cash on former Rep. Randy “Duke” Cunningham of San Diego in exchange for Cunningham's influence steering lucrative government work to Wilkes' company, ADCS Inc. Burns initially ruled that Wilkes could not remain free while appealing, citing among other reasons his concerns that Wilkes posed an “economic danger” to the community. http://www.signonsandiego.com/news/metro/20080426-9999-1m26wilkes.html
Judge says Wilkes can raise bail, leave jail to await appeal. But ex-contractor is short on funds. During a hearing in front of U.S. District Judge Larry Burns, a lawyer for Wilkes said family members of the former Poway defense contractor were willing to pledge property with about $800,000 in equity. Burns said if Wilkes can pull together an additional $600,000 in collateral – either property or other assets – he will be released. http://www.signonsandiego.com/news/politics/20080405-9999-1m5wilkes.html http://www.nctimes.com/articles/2008/04/05/news/sandiego/a5b80a80c625cb45882574210072cd3e.txt
Wilkes Speaks, the Times Bites http://pogoblog.typepad.com/pogo/2006/08/theres_somethin.html
Deal Maker Details the Art of Greasing the Palm http://www.nytimes.com/2006/08/06/washington/06wilkes.html?pagewanted=1&_r=2
Wilkes' attorney seeks to subpoena prosecutors, reporters http://www.nctimes.com/articles/2007/11/22/news/sandiego/5_02_4611_21_07.txt
Judge proposes moving Wilkes, Foggo trial to Virginia http://www.signonsandiego.com/news/metro/20071120-9999-1m20wilkes.html
“This man was the architect of a multimillion-dollar corruption scheme, and he has a defense fit for a 5-year-old,” Forge said. http://www.signonsandiego.com/uniontrib/20071101/news_7m1wilkes.html
Wilkes case may be ready for jury, Cunningham never took witness stand http://www.signonsandiego.com/uniontrib/20071031/news_1m31wilkes.html
Cunningham financier admits role in scandal http://www.signonsandiego.com/news/politics/20070615-9999-1n15tommy.html
Wilkes' move: Trying his case in the court of public opinion, May 14, 2007 Kelly Thornton: (619) 542-4571; firstname.lastname@example.org http://www.signonsandiego.com/uniontrib/20070514/news_1n14geragos.html
Kontogiannis an enigmatic figure in Cunningham case
April 08, 2007 NORTH COUNTY ---- An alleged co-conspirator in the sordid bribery tale of Randy Cunningham remains an enigmatic yet key figure in what federal officials have said is the single-largest case of congressional corruption in U.S. history.
The alleged co-conspirator, New York businessman Thomas Kontogiannis, has so far escaped indictment despite being accused of having helped to steer more than $500,000 in illicit money to the former North County Republican congressman ---- who now resides in an Arizona prison.
Kontogiannis' nephew, financier John T. Michael, hasn't been as fortunate as his uncle, a wealthy Long Island real estate developer who has had previous brushes with the law. Michael was indicted by a San Diego federal grand jury in February for obstruction of justice in connection with the Cunningham case.
At the same time, the government also indicted Brent Wilkes, owner of the Poway defense firm ADCS, for allegedly bribing Cunningham and for money laundering. Also indicted was Kyle "Dusty" Foggo, the former No. 3 man at the CIA, who is accused of fraud and money laundering.
Michael, Wilkes and Foggo have each pleaded not guilty.
Kontogiannis has remained silent about his alleged involvement. But in a brief telephone interview with the North County Times two years ago, he acknowledged having had dealings with Cunningham and has since been identified by multiple sources as "co-conspirator No. 3" in Cunningham court documents.
Cunningham pleaded guilty in late 2005 to taking $2.4 million in bribes in exchange for steering government contracts to Wilkes and another defense contractor, Mitchell Wade of the now-defunct Washington firm MZM Inc.
In the Wilkes indictment, prosecutors say Kontogiannis provided Cunningham with an unspecified "substantial bribe."
Efforts to reach Kontogiannis at his home and office last week were unsuccessful. His attorney, Gregory J. O'Connell, declined comment Friday.
Officials with the U.S. attorney's offices in San Diego, New York and Washington also refused to talk about Kontogiannis, who owns more than two dozen businesses, according to news reports.
Kontogiannis is a married man. He was born in Greece. Not much more is known about him.
A former U.S. attorney in San Diego said that based upon his experience and knowledge of the indictments, a plausible explanation for why Kontogiannis has not been indicted is that he has been cooperating with prosecutors.
"It's difficult to understand why they would name him so prominently and not indict him unless he is cooperating" said Peter Nunez, who served as U.S. attorney in San Diego from 1982-88. "The most likely thing is he has already cut a deal."
A local defense attorney who practices frequently in federal court also said he believed that Kontogiannis was aiding prosecutors.
"There is a 99 percent chance that he is cooperating," said the attorney who agreed to speak on condition of anonymity because of concerns that his comments could anger prosecutors. "There is a high probability that he is cooperating and has agreed to testify if it goes to trial. He probably has appeared before the grand jury."
In September 2005, agents from the FBI, Internal Revenue Service and other federal law enforcement agencies raided Kontogiannis' home and office.
What they were looking for remains under court seal, but court documents in the Wilkes and Cunningham case allege the following:
- Kontogiannis bribed Cunningham by buying a yacht from him at an above-market price, a payment made in part through a $200,000 down payment on a condominium that Cunningham bought in Arlington, Va., in 2002.
- He and Michael agreed to allow Cunningham to use Michael's company, Coastal Capital Corp., and another company to facilitate the payment of bribes.
- He and Michael used the cash proceeds from a fraudulent mortgage obtained through Coastal Capital to pay off a $500,000 mortgage on Cunningham's former Rancho Santa Fe estate. The indictment alleges that one of Wilkes' companies later repaid Kontogiannis and Michael that money with a $525,000 wire transfer.
A month before the transfer, Wilkes allegedly told Cunningham that he needed a $6 million payment from Wade on a contract that MZM had given to Wilkes' company at Cunningham's direction. The day after Wilkes received the money, he allegedly wired the $525,000.
- Kontogiannis paid more than $28,000 in mortgage payments on the Rancho Santa Fe estate Cunningham sold shortly after the allegations against him arose.
The charges in the Wilkes indictment lay out several instances of alleged money laundering and illegal transactions, and list co-conspirator No. 3 as a key player.
"Defendant Brent Roger Wilkes, co-conspirator No. 3 and others did knowingly conduct and attempt to conduct a financial transaction ... knowing that the transactions involved the proceeds of a specified unlawful activity ... and knowing that each transaction was designed in whole or in part to conceal and disguise the nature, location source, ownership, and control of the proceeds of said specified unlawful activities," the indictment reads.
In the 2005 Cunningham case, the first indication of a link surfaced when Kontogiannis told the North County Times that he had bought a 65-foot, flat-bottomed boat in 2002 from Cunningham for $627,000. Cunningham had bought the boat five years earlier for $200,000.
When that deal surfaced, a San Diego yacht broker said that based on the model and age of the boat, its estimated value would be no more than $200,000. There was no way it could be worth $627,00, he said, "unless it has a Picasso on board."
One source with knowledge of the case said long ago that Kontogiannis may never face prosecution. That source, who also spoke on the condition of anonymity, said Kontogiannis would get a "pass" because of what he said were the man's relationships with key officials in the upper echelons of the Greek and U.S. governments.
Keith Ashdown of the Washington group Taxpayers for Common Sense has closely followed the Cunningham case. He also said he believes that Kontogiannis may be a person considered by the government as a valuable asset and therefore would not face prosecution.
"My guess: He's either an informant or an intelligence asset," Ashdown said last week during a telephone conversation. "The guy (Kontogiannis) is like Houdini ---- I have never seen anything like it."
Kontogiannis and his wife, Georgia, gave more than $30,000 in political contributions to Republican congressional candidates and Republican organizations between 2000 and 2004, Federal Election Commission records show.
Kontogiannis has had two previous brushes with the law, but avoided jail time in each instance.
In 1994, he and another man were arrested by the FBI in Athens, Greece, on charges relating to bribing an embassy official to obtain a U.S. visa, according to news reports. Kontogiannis pleaded guilty to reduced charges and was sentenced to five years' probation.
In 2002, Kontogiannis pleaded guilty to charges stemming from a $2 million kickback scheme. Kontogiannis, the superintendent of a Queens County, N.Y., school district and three other co-defendants and five corporations ---- three of them owned by Kontogiannis ---- were charged with 123 counts of rigging bids, paying bribes and receiving kickbacks in deals related to school computers, court records show.
Kontogiannis and his co-defendants agreed to pay nearly $5 million in restitution to resolve that case. He admitted to committing fraud, providing unlawful gratuities and attempting to violate New York's antitrust law.
In a 2005 Washington Post article, Kontogiannis said he met Cunningham at a Washington function around 1990 and that the two saw each other periodically over the years.
He also said that he had served in the Greek navy before coming to the United States.
When Kontogiannis was in the thick of court proceedings over the Queens school district scandal, Cunningham wrote a letter to the Queens County District Attorney Richard A. Brown, suggesting that Kontogiannis might be the victim of a political vendetta.
"Mr. Kontogiannis is being allegedly victimized," Cunningham wrote in the letter.
But Kontogiannis' efforts to get help from Cunningham didn't stop there. Kontogiannis told reporters in 2005 that following his 2002 conviction in the kickback deal, he sought Cunningham's assistance in seeking a presidential pardon.
Cunningham apparently stopped short of contacting the White House, instead steering Kontogiannis to a Washington law firm.
The next hearing in the government's case against Wilkes takes place Monday when he is slated to appear before a federal judge to resolve issues surrounding the bond he had to put up to remain free pending trial
Sources: Wilkes gave kin CIA deal
Nephew said to be key figure in indictment
February 17, 2007 When indicted Poway defense contractor Brent Wilkes landed a contract to ship supplies to CIA agents in Iraq, he tapped his nephew and lobbyist Joel Combs to handle the job, according to people close to Wilkes and within the CIA.
On July 29, 2004, Combs – who had no previous experience in overseas supply operations – formed a one-man company called Archer Logistics in Chantilly, Va., records with the Virginia State Corporation Commission show.
Within months, Archer Logistics was selling bottles of water to the CIA, more than half a dozen sources have told The San Diego Union-Tribune. Those sales lie at the core of this week's indictment of Wilkes and Kyle “Dusty” Foggo, who was once the third-highest ranking officer in the agency.
According to the indictment, Foggo steered the contract to his longtime friend Wilkes, who promised him a high-paying job within his flagship company, ADCS Inc. Wilkes had set up a “shell company” to run the operation, founded July 29, 2004, by an individual referred to only as “Wilkes Subordinate X,” the indictment said.
Federal prosecutors have not identified Combs as Subordinate X, and Combs cannot be reached for comment. But his involvement with Archer Logistics, and Union-Tribune interviews with numerous people, indicate that Combs is Subordinate X.
Most of the sources declined to be identified because they did not want to be involved in the criminal case.
Wilkes and Foggo were indicted Wednesday on charges of conspiracy, money laundering and honest-services fraud related to the Iraq contract.
The same day, Wilkes was indicted on charges of bribery and New York financier John T. Michael was indicted on charges of obstruction of justice related to the corruption case of former Rep. Randy “Duke” Cunningham, who is serving more than eight years in prison after accepting $2.4 million in gifts from Wilkes and Mitchell Wade, a former defense contractor and one-time consultant to Wilkes.
Wilkes, Foggo and Michael have pleaded not guilty to all charges.
Many of the details included in the indictment appear to come from Subordinate X. If Combs is cooperating with prosecutors, they have a source who was intimately involved with Wilkes' lobbying efforts on Capitol Hill.
“Joel was one of Brent's right-hand men,” said one former Wilkes employee who declined to be named for fear of being drawn into the case. “Joel went to Washington, D.C., on practically every trip that Brent went. He was with him when Brent took politicians to Coeur d'Alene and he was with him when he met politicians at the Watergate Hotel in Washington.”
The indictment said Wilkes took Cunningham on at least two expensive vacations to a resort in Coeur d'Alene, Idaho. Wilkes maintained a hospitality suite in the Watergate where he would entertain politicians and play poker with CIA operatives.
Another former Wilkes employee said Combs accompanied Wilkes and Cunningham on trips to Hawaii. The indictment accuses Wilkes of arranging for prostitutes for himself and Cunningham while staying at a $6,600-per-night suite in Hawaii.
Combs, the son of Wilkes' older sister Patricia, was born in Orange County in 1969 but grew up in Tucson, Ariz. After obtaining a degree in management information systems from the University of Arizona, Combs worked for a while helping computerize accounting records at a national retail chain.
He went to work for Wilkes shortly after ADCS was founded in 1995. By the time he was 29, Combs was in charge of ADCS's federal information technology systems, serving as the company's liaison with one of its prime customers, the National Imagery and Mapping Agency.
Like Wilkes, Combs was active in Republican politics. His corporate biography says he was a chairman of the San Diego County Young Republicans and fundraising chairman for the Young Republican National Federation.
Over the course of his career with Wilkes, Combs donated more than $40,500 to congressional or presidential political campaigns, including $10,500 to Cunningham and his political action committee. His contributions were always made on the same day as donations from Wilkes or other ADCS employees.
In 2003, Wilkes established a lobbying arm – Group W Advisors – to lobby on behalf of ADCS and some of its related entities or joint ventures: PerfectWave Technologies, Optimum Composite Design, MailSafe, Pure Aqua Technologies and GTS Globalift.
Combs headed the agency, assisted by Michael Mack, a former chairman of the Young Republican National Federation. Together, they worked to secure federal contracts for ADCS and its entities. One former Wilkes associate said Wilkes told him he was grooming Combs to run for office someday, “where he could have access to federal money.”
The indictment said Subordinate X was pulled into the Iraq contract in December 2003 or January 2004. At the time, Foggo was based in Frankfurt, Germany, where he was overseeing CIA purchasing throughout Europe and the Middle East, including Iraq.
Foggo was a childhood friend of Wilkes. They grew up together in Chula Vista, were best men at each other's weddings and named their sons after each other. Wilkes had offered Foggo a top job at ADCS once he left the CIA. Wilkes even kept a vacant office ready for Foggo in his headquarters in Poway.
For several months in 2003, Foggo and Wilkes had been discussing the possibility of getting a deal to supply bottled water to CIA operatives in Iraq. But according to the indictment, Foggo and Wilkes felt they had to ensure that the contract could not be directly traced back to them, because many CIA officials knew of their long-standing friendship.
Around December 2003, when Wilkes and Foggo were on a $32,000 vacation in Hawaii, Wilkes recommended Subordinate X as the person who would handle the deal, the indictment said.
In January 2004, according to the indictment, Foggo sent an e-mail to Subordinate X.
“I would like the 'president' or 'CEO' of (the entity that would take the Iraq contract) to come visit,” Foggo wrote. “Brent told me that was you – smile – so let's get to it. I'll need to brief you a bit on how we need to play this, but that needs to be face to face, before you meet my people.”
Foggo later told Subordinate X not to tell CIA operatives about the long-standing relationship they had through Wilkes, according to the indictment. Instead, Subordinate X was instructed to say that he and Foggo had met in a Washington, D.C., cigar bar.
Archer Logistics, which was based in an ADCS satellite office in Chantilly, Va., subsequently landed the contract, sources say. According to the indictment, the shell company sold $1.7 million worth of water at a 60 percent markup. When the CIA delayed payments, Wilkes sent Subordinate X an e-mail saying, “I talked to the big guy last night. He will sprinkle some magic dust today that would solve your problem.”
On the same day, Foggo sent an e-mail to a CIA contracting official, inquiring about the delays in payment. The CIA soon made the payments.
Federal grand jury indicts Foggo, Wilkes
1:56 p.m. February 13, 2007
- Poway defense contractor Brent Wilkes (at left) and former high-ranking CIA official Kyle “Dusty” Foggo.
SAN DIEGO – Poway defense contractor Brent Wilkes and former high-ranking CIA official Kyle “Dusty” Foggo, childhood friends from San Diego who got entangled in the Randy “Duke” Cunningham corruption scandal, were indicted Tuesday by a federal grand jury.
U.S. Attorney Carol Lam announced the indictments at an afternoon press conference, calling the charges against the two men “breathtaking in scope.”
The jury returned 11 counts against Foggo and Wilkes that include conspiracy, wire fraud, conflict of interest and money laundering. It charges Foggo with using his seniority and influence within the CIA to direct the awarding of contracts to Wilkes, his lifelong friend.
A second indictment, which included 26 counts, names Wilkes and New York-based mortgage banker John T. Michael, who co-owned a mortgage company that provided loans to Cunningham. It charges Wilkes with conspiracy, wire fraud, bribery of a public official and money laundering.
The investigation began after a June 12, 2005, report by Copley News Service reporter Marcus Stern that detailed Cunningham's sale of his Del Mar Heights home to a defense contractor for hundred of thousand of dollars more than it was worth.
Within nine months of that first report of corruption, Cunningham was convicted and jailed.
Court documents allege that Wilkes provided more than $700,000 to Cunningham in exchange for the former congressman corruptly influencing the appropriation of funds and the execution of government contracts to benefit Wilkes' company, Poway-based ADCS Inc.
- United States' Attorney Carol Lam announces a new round of indictments stemming from corruption of convicted U.S. Congressman Randall "Duke" Cunningham in San Diego, Tuesday. Lam is flanked by FBI agent Stewart Roberts
Michael, 35, is charged with a single charge of obstructing justice. He is accused of trying to influence and impede a federal grand jury investigation by providing misleading and false testimony regarding Wilkes' role in paying off the $500,000 second mortgage on Cunningham's Rancho Santa Fe home.
Michael is the nephew of the wife of Thomas Kontogiannis, a Long Island developer who sought Cunningham's help in seeking a presidential pardon for a conviction in a New York schools bribery scandal. Ultimately, Kontogiannis decided not to pursue the pardon.
Kontogiannis was named a co-conspirator in the Cunningham case and, according to court records, he gave the former congressman $328,000, most of it through an overpayment for a boat. He has not been charged. The indictment alleges that Wilkes paid bribes to Cunningham in the form of cash, checks, lavish meals, trips, lodging, corporate jet travel, boats and prostitution.
The indictment says that on two occasions Wilkes provided prostitutes for himself and the congressman on two consecutive evenings on a lavish Hawaiian trip.
Court documents also allege that Foggo and Wilkes, both 52, schemed to conceal Foggo's conflict of interest and corrupt intent by using shell companies and straw men, and laundered the proceeds of their fraud.
Foggo accepted tens of thousands of dollars in meals, gifts and vacations, and a standing offer of a senior executive position with ADCS. Foggo disclosed none of this to the CIA, according to the indictment.
Prosecutors are asking for forfeiture of $12 million from Wilkes and Michael.
“These two indictments describe patterns of self-dealing and corruption that spanned years and reached deep into our country's systems of procurement in the defense industry,” Lam said.
“The allegations in the indictments describe undisclosed personal and financial relationships between government officials and individuals seeking lucrative defense contracts. These personal and financial relationships led to benefits totalling thousands, even millions of dollars, being bestowed on government officials and millions of dollars in defense contracts flowing back in the other direction.”
Kenneth J. Hines, special agent in charge of IRS' Criminal Investigation unit, said Wilkes and Foggo went to great lengths to circumvent the law to personally enrich themselves and that this kind of behavior will not be tolerated.
“There's no doubt that the victims in the case truly are the American taxpayer and the money that is lost with this deceptive practice,” he said.
Stewart Roberts, assistant special agent in charge of the FBI's San Diego office, said that “although the perpetrators of these types of crimes involved in corruption may believe that their self dealing is a victimless event, we know that these types of crimes do have victims.”
“The American public has a right to expect that their public officials and the contractors they enlist to do the government's work, will be acting with the best interest of the public in mind and not just their best interest in mind,” Roberts said.
Wilkes and Foggo are expected to surrender at an arraignment in federal court Wednesday.
Foggo quit his post as No. 3 at the CIA after his office was raided by San Diego-based federal agents.
Wilkes was a big contributor to Republican lawmakers who developed a series of businesses that specialized in landing federal contracts, with ADCS as his flagship.
ADCS received more than $100 million in government contracts between 1995 and 2005, partly with the help of Cunningham, who sat on the influential House Appropriations Committee.
Wilkes and Foggo have been friends for years, back to when they both attended Hilltop High School in Chula Vista and San Diego State University.
Cunningham, a Republican who represented much of San Diego's North County in Congress for 15 years, pleaded guilty to conspiracy and tax evasion charges in November 2005 and was sentenced last March to eight years and four months in federal prison.
He is now in a minimum-security work camp in Tucson.
As part of his criminal case, Cunningham admitted accepting more than $2.4 million in bribes and, in exchange, routing contracts worth millions of contracts to businesses that were controlled by Wilkes and another businessman, Mitchell Wade.
Wade once worked for Wilkes, then became his business rival with a company that obtained more than $100 million in contracts while Wade was plying Cunningham with cash, trips and fine furniture, according to court records.
Wade has pleaded guilty to conspiracy and is awaiting his sentencing.
Duke co-conspirator sells corporate headquarters
February 03, 2007 NORTH COUNTY ---- With a federal indictment reportedly looming for his alleged involvement in the Randy "Duke" Cunningham case, Poway defense contractor Brent Wilkes sold his company headquarters this week, county records show.
Wilkes has been tied to Cunningham, the former North County Republican congressman who pleaded guilty last year to his role in a $2.4 million bribery scheme in exchange for government contracts. Cunningham is now serving a federal sentence of 8 years and four months in an Arizona prison.
Officials with the county tax assessors office said Friday that Rancho Bernardo-based Ironwood 12 LLC made an initial payment of $3 million to Wilkes' company, Al Dust Properties LLC, for the property on Stowe Drive in Poway. The company agreed to assume all outstanding debts and/or liens relating to the former home to several of Wilkes' companies. County assessor records indicate that the sale includes the 97,000-square-foot building and all its improvements and fixtures.
Officials with the Poway Unified School District were negotiating with Wilkes to buy the building, and on Friday they said that with the sale to Ironwood, they are trying to work out a deal with the new owner to acquire the high-end property for district headquarters.
John Collins, deputy superintendent of the Poway Unified School District, said that he first learned that Ironwood was the buyer when he got a phone call from Paul Smithers on Friday afternoon, offering the district the property. The Poway school board has called a special meeting for Monday to discuss a potential deal.
Smithers is listed in records filed with the California secretary of state as the agent for Ironwood 12 LLC, who according to Federal Election Commission records was the attorney for the Wilkes Corp. in 2002.
Smithers could not be reached for comment Friday.
A San Diego federal grand jury has been considering evidence for more than a year against Wilkes, who was a longtime contributor to Cunningham's congressional campaigns.
On Wednesday, two sources close to the case said that an indictment is being prepared that would charge Wilkes and two of the others ---- New York businessman Thomas Kontogiannis and his nephew, John T. Michael ---- with bribery and several conspiracy counts related to the Cunningham case.
In earlier court documents, federal prosecutors alleged that four co-conspirators, including Wilkes, lavished the former 50th Congressional District Republican with cash, loans and gifts in a complex bribery scheme to steer government business to defense contractors, including Wilkes' ADCS.
Early last year, the owner of Washington defense contractor MZM Inc., Mitchell Wade, pleaded guilty in federal court to having bribed Cunningham with more than $1 million and is awaiting sentencing.
Wilkes is also facing a possible second indictment, according to the same sources, who say that prosecutors plan to ask the grand jury to return charges of honest services fraud and conspiracy against him and a close friend, Kyle "Dusty" Foggo, a former CIA official.
Honest services fraud is a combination of mail and wire fraud. The charge is often used in public corruption cases in which officials engage in an ongoing pattern of activities such as accepting gifts, trips or promises of future employment from private individuals.
Wilkes' attorney, Mark Geragos, could not be reached for comment Friday. However, in an interview earlier this week, Geragos said he has seen nothing that "would merit an indictment" of Wilkes.
As recently as mid-January, Wilkes was in default on a $12.1 million real estate loan on the property and it had been scheduled to be auctioned Thursday to pay off the loan. However, on Wednesday, the title insurance company that was holding the auction announced that the event had been postponed at the last minute until late March. No reason was given for the postponement. As of Friday, Wilkes owed about $590,000 in back property taxes on the building.
In addition to the back taxes on the ADCS property, he is delinquent on $5,000 in property taxes that he owes on three homes he owns in San Diego and Chula Vista, officials with the county treasurer tax collector's office said Friday.
In addition, the online newspaper Voice of San Diego reported Thursday that Wilkes had received notices of default or preforeclosure notices on real estate loans for his primary residence ---- a 5,325 square-foot home in a gated Poway development ---- and on another home he owns in Chula Vista.
Charges looming for Wilkes, friend
February 1, 2007 Federal prosecutors in San Diego are preparing charges against a Poway businessman at the center of the Randy “Duke” Cunningham scandal and a childhood friend who went on to become the No. 3 official at the CIA.
Sources told The San Diego Union-Tribune the investigation will wrap up soon and prosecutors will ask grand jurors to indict Poway's Brent Wilkes and former CIA executive director Kyle “Dusty” Foggo.
One federal official said Wilkes and Foggo could be charged with fraud and conspiracy in connection with a contract to supply bottled water to CIA operatives in Iraq. The official did not want to be identified because the charges have not been completed and the case is still before a grand jury.
Wilkes has denied wrongdoing, and his lawyer, Mark Geragos, said yesterday “nothing in what I know about this case . . . merits indictment.”
Foggo's lawyer was unreachable last night, but told The Associated Press he was unaware of the pending charges and couldn't comment further.
Wilkes and Foggo were friends at Hilltop High School in Chula Vista and San Diego State University.
Wilkes could face charges in a separate indictment involving payments to Cunningham, the official said. Also potentially facing charges in that case are two men identified only as “co-conspirators” in Cunningham court papers.
One of those men, Thomas Kontogiannis, was involved in a number of financial transactions, including paying off a mortgage for a Rancho Santa Fe house Cunningham bought with bribe money, according to the court papers.
His nephew, John T. Michael, co-owned a mortgage company that provided loans to Cunningham.
Cunningham pleaded guilty to conspiracy and tax evasion charges Nov. 28, 2005, admitting he accepted more than $2.4 million in bribes in exchange for sending millions of dollars worth of contracts to companies controlled by Wilkes and another businessman, Mitchell Wade.
The former Republican congressman from North County was sentenced March 3 to eight years and four months in federal prison and is now in a minimum-security work camp in Tucson.
Wade has pleaded guilty to conspiracy. He has not yet been sentenced.
Wade once worked for Wilkes but later created a rival company that secured more than $100 million in federal contracts as he was bribing Cunningham with cash, trips and fine furniture, according to court records.
Wilkes was a big contributor to Republican lawmakers. He developed a series of companies that specialized in landing federal contracts.
One of Wilkes' companies, Archer Logistics, landed a multimillion-dollar CIA contract in 2003 to provide water and first-aid supplies to operatives in Iraq and Afghanistan, despite being a new company with no logistics experience.
The contract was awarded by the CIA's Frankfurt, Germany, office, where Foggo worked overseeing procurements for the Middle East and Europe.
The U.S. Attorney's Office declined to comment on the case.
State fines Poway business owner for making phony donations
January 14, 2007 SAN DIEGO -- A Poway businessman linked to disgraced Congressman Randy "Duke" Cunningham has been fined the maximum of $4,000 for concealing campaign contributions to a San Diego mayoral campaign.
The state Fair Political Practices Commission fined Brent Wilkes on Friday.
Wilkes was owner and CEO of ADCS, Inc., a data and document storage company. The FPPC said he concealed $500 in contributions he made to the Ron Roberts for Mayor Committee in San Diego in May 2000.
The commission said Wilkes got an employee and her husband to make two contributions and reimbursed them in cash.
Wilkes did not challenge the fine.
A call to his attorney seeking comment was not immediate returned Saturday.
Wilkes remains under federal investigation in the Cunningham bribery case.
Cunningham, a San Diego-area Republican, was sentenced in March to more than eight years in prison for accepting $2.4 million in bribes in exchange for steering government business to Wilkes and others.
A federal grand jury in San Diego is considering charges against Wilkes.
His lawyers have said he is the person identified as "Co-Conspirator No. 1" in Cunningham's plea agreement.
Lawmaker steered wasteful contracts to friends
Congressman in prison for bribery
October 18, 2006 THE NEW YORK TIMES -- WASHINGTON -- Former Congressman Randy Cunningham pressured and intimidated staff members of the House Intelligence Committee to help steer more than $70 million in classified federal business to favored military contractors, according to a congressional investigation made public Tuesday.
The investigation found that Cunningham, a Republican from California who is serving an eight-year prison sentence for bribery, repeatedly abused his position on the Intelligence Committee to authorize money for military projects, often over the objections of committee staff members who criticized spending as wasteful.
The report also found that despite numerous "red flags" about the propriety of a particular contract for work on a controversial Pentagon counterintelligence program, committee staff members for three years "continued to accept and support Cunningham's growing requests for this project."
Cunningham resigned from Congress in November after pleading guilty to accepting more than $2 million in bribes from military contractors. His plea was mainly related to his activities as a member of the House Appropriations Committee.
The report released Tuesday lays out for the first time how Cunningham won secret contracts for two friends, Brent R. Wilkes and Mitchell J. Wade, both contractors.
Lawyers for Cunningham and Wade declined to comment on the report. A lawyer for Wilkes could not be reached.
Contractor tells how he learned to lobby06 August, 2006 – In 1992, Brent Wilkes rented a suite at the Hyatt Hotel a few blocks from the Capitol. In his briefcase was a stack of envelopes for a half-dozen congressmen, each packet containing up to $10,000 in checks.
Wilkes had set up meetings with the lawmakers hoping to win a government contract, and he planned to punctuate each pitch with a campaign donation. But his hometown congressman, Rep. Bill Lowery, R-San Diego, told him that presenting the checks during the sessions was not how things were done, Wilkes recalled.
Instead, Wilkes said, Lowery taught him the right way to do it: Hand over the envelope in the hallway outside the suite, at least a few feet away.
That was the beginning of a career built on what Wilkes calls “transactional lobbying,” which made him rich but also landed him in the middle of a criminal investigation.
“John Karpovich, who helped run the document conversion program at the Defense Department before his retirement, said Wilkes infuriated Pentagon staff by claiming that the document conversion money belonged to him,” reported the Washington Post.
"Brent came in and said, 'That's our money,"' Karpovich recalled. "He said, 'The congressmen put the money in there for us."'
Karpovich was reluctant to talk with us, but conceded he’d watched the deal being put together by Bent Wilkes, House Armed Services Chairman Duncan Hunter, and the just-deposed No. 3 man at the CIA, Dusty Foggo.
“Brent called me said he heard the product was great, and asked me to meet him in Washington. He had a suite at the Watergate. We met there and went to dinner with Dusty Foggo. He seemed like a sharp guy, at least he knew the inside of the government pretty well. We went to dinner with Dusty, and he and Brent talked about old times.”
Karpovich had been castigated by Hunter, Chairman of the House Armed Services Committee, he told us, for trying to sell the software to the Pentagon too cheaply.
“In the meeting Duncan Hunter pointed to me and said to Wilkes, 'Your boy doesn’t know how to play the game,'" said Karpovich.
“They took a $6000 product, gave it another name, and sold it to the defense department for $32000 a pop. Later on we began to get calls from military bases around the country," Karpovich stated. "They were saying, hey, we just got this expensive software. What are we supposed to do with it?"
The deal now worked for everyone… except maybe U.S. taxpayers, and dead U.S. servicemen in Iraq whose Humvee’s didn’t get armor plating until it was too late because there wasn’t enough money for it in the Pentagon budget.
Cozying Up to Power
Brent Wilkes' businesses grew along with his political ties. He is 'co-conspirator No. 1' in the Cunningham case, his lawyer says. He has not been charged.
Committee chairman comments on new allegations in Cunningham case
The chairman of the House Intelligence Committee said Thursday he's not surprised by allegations of prostitution in the corruption case involving former Rep. Randy "Duke" Cunningham, a former committee member.
Chairman Pete Hoekstra, R-Mich., said he has discussed the matter with authorities and expected to raise the issue with an independent investigator he has hired to review Cunningham's committee work.
"If I'm trying to connect dots, this is not a surprising outcome," Hoekstra said in an interview with The Associated Press.
"It's unsavory, it is pathetic, it is sickening, but not surprising."
FBI agents are investigating whether defense contractor Brent Wilkes provided prostitutes, limousines and hotel suites to Cunningham, federal officials told The Associated Press last week. Cunningham, a California Republican, is serving a prison term of eight years and four months after pleading guilty in November to taking $2.4 million in homes, yachts and other bribes mostly from defense contractors in exchange for steering government contracts.
Wilkes' attorney, Michael Lipman, didn't immediately return a call for comment Thursday. In an interview earlier this week, he said Wilkes denied the allegations of prostitution, which were raised by a second defense contractor who has pleaded guilty in the case.
Hoekstra declined to elaborate on his suspicions or discuss reports that CIA Executive Director Kyle "Dusty" Foggo, a longtime friend of Wilkes, attended poker parties at the hotel rooms.
Mr. Cunningham periodically phoned him to request a prostitute
Mr. Wilkes, of Poway, Calif., founded a series of companies that obtained federal contracts, including ADCS Inc., which won contracts to convert paper military records to computer images.
Mr. Wade in February pleaded guilty to giving bribes of more than $1 million to Mr. Cunningham, including cash, antiques and payment for yachts. Mr. Wade, who hasn't been sentenced yet, is cooperating with prosecutors. According to people with knowledge of the investigation, Mr. Wade told investigators that Mr. Cunningham periodically phoned him to request a prostitute, and that Mr. Wade then helped to arrange for one. A limousine driver then picked up the prostitute as well as Mr. Cunningham, and drove them to one of the hotel suites, originally at the Watergate Hotel, and subsequently at the Westin Grand.
Mr. Wade told investigators that all the arrangements for these services had been made by Mr. Wilkes and two employees of Mr. Wilkes's company, according to people with knowledge of his debriefing. He said Mr. Wilkes had rented the hotel suites and found the limousine driver, who had "relationships" with several escort services. Mr. Wade told prosecutors that sometimes Mr. Cunningham would contact him to request these services, and he would pass on the request to Mr. Wilkes or his employees, who then made the actual arrangement. Mr. Wade said that other times Mr. Cunningham called Mr. Wilkes directly to make the requests.
If investigators find that any other members of Congress or their staffs received services at so-called hospitality suites, that could help make a case that they had illegally taken action to benefit Mr. Wilkes in return for favors from him. Mr. Wilkes, his family members and his employees were heavy campaign contributors to several members of Congress. But prosecutors so far apparently haven't found any evidence that other members of Congress had been bribed.
House Panel Probes Limo Firm's Deal
The Department of Homeland Security came under renewed scrutiny Thursday as a House panel sought to determine how it awarded $25 million in contracts to a transportation company whose selection was recommended by Randy "Duke" Cunningham, the former San Diego-area congressman convicted of accepting millions of dollars in bribes from defense contractors.
After receiving bids from three companies, agency officials said, they chose Shirlington Limousine and Transportation Inc. of Washington, based on both price and the company's ability to perform the needed services.
But Rep. Peter T. King (R-N.Y.), chairman of the House Homeland Security Committee, noted that the company's president, Christopher Baker, had done business with Brent R. Wilkes, a San Diego defense contractor identified as an unindicted co-conspirator in the Cunningham case.
"Then we find out that the congressman at the center of all of this sends a letter on behalf of this limousine company," he said. "If that doesn't raise issues, if that isn't more than a series of coincidences, I don't know what is."
Cunningham was the only member of Congress to support Shirlington's selection, King said.
The government is investigating allegations that Wilkes provided Cunningham, and perhaps other officials, with prostitutes and limousines. Citing an ongoing grand jury investigation, Baker did not testify Thursday.
Limo letter is found at Homeland Security
A day after Homeland Security officials denied knowing about former Rep. Randy “Duke” Cunningham's attempts to gain a contract for a limousine service, Cunningham's letter praising the company surfaced in the department's files.
In the letter, Cunningham wrote of his “full support of (Shirlington Limousine's) wish to provide transportation services for the Department of Homeland Security,” or DHS.
FBI agents have been investigating whether the company – while working for Brent Wilkes, an unindicted co-conspirator in the Cunningham corruption case – helped Wilkes arrange for prostitutes for Cunningham while Wilkes was vying for federal contracts.
Wilkes and Shirlington founder Christopher Baker have denied any involvement with prostitutes. But Baker has said through his lawyer that he provided transportation for “entertainment” at Wilkes' hospitality suites in Washington from 1990 to the early part of the decade.
Although Baker is a convicted felon, Cunningham gave him a character reference Jan. 16, 2004.
“I have personally known Mr. Baker since the mid-1990s,” Cunningham wrote to Homeland Security. “He is dedicated to his work and has been of service to me and other Members of Congress over the years.”
At the time, the department had no plans to hire a limousine service. But within three months, the department gave Baker a $3.8 million contract. A year later, he got a contract worth up to $21.2 million.
Until recently, Homeland Security officials have denied that any legislators were involved in the contract. In May, department officials twice told Congress that they had no record of Cunningham's letter.
On Thursday, however, Baker gave Congress a sworn affidavit that he had sent the letter to the department. Homeland Security officials said they found an e-mail mentioning the letter but had no other evidence of its existence.
Yesterday the department produced the letter, saying it had been misfiled.
“This is yet another example of DHS incompetence – and I think it may have been more than just bad record-keeping,” said Rep. Peter King, R-N.Y., who leads the House Homeland Security Committee. “This letter certainly . . . raises further questions about political manipulation in the contracting process.”
Poway businessman Brent Wilkes funneled campaign donations to key lawmakers as he tried to build a defense empire
Long before he was identified as a co-conspirator in former Rep. Randy “Duke” Cunningham's corruption case, Poway businessman Brent Wilkes boasted of his prowess in persuading powerful lawmakers to help him push contracts through Congress.
To get a $25 million contract for a start-up defense company, Wilkes said he needed about $1.5 million for lobbying and related expenses, according to a lawsuit filed against him by a former business partner. He allegedly told his partner that about half the $25 million would be pure profit.
When Wilkes made that boast, he already had been awarded about $80 million in contracts through the congressional process known as earmarking, which allows lawmakers to slip projects into the federal budget to benefit particular causes or companies.
Cunningham admitted directing federal contracts to Wilkes in exchange for more than $630,000 in bribes. Cunningham and his political action committee also received at least $76,500 in legal campaign contributions from Wilkes and his associates.
But Cunningham wasn't the only lawmaker who benefited from Wilkes' war chest.
From 1995 to 2005, as Wilkes got federal funding for his family of small defense companies, he steered more than $600,000 in contributions to lawmakers and their political action committees.
The biggest beneficiary was House Appropriations Committee member John Doolittle from the Sacramento suburb of Granite Bay, who received at least $82,000 from Wilkes, his close relatives, employees and business partners. Appropriations Committee Chairman Jerry Lewis of Redlands received $60,000. Rep. Duncan Hunter of Alpine, chairman of the Armed Services Committee, got $39,200.
In recent years, Wilkes focused on former House Majority Leader Tom DeLay, who got $57,000 from 2002 to 2004. In September, DeLay was indicted in Texas, accused of funneling corporate donations into elections in violation of state law. Wilkes has been subpoenaed in the case.
There is no indication that any legislator other than Cunningham made illegal deals with Wilkes. But the timing of Wilkes' many political donations closely parallels the approval of earmarks for ADCS, PerfectWave Technologies and other businesses in his corporate family.
“It almost looks like a legalized laundering of money: 'You give us $1 million for a contract and we'll make sure you'll get your share,' ” said Keith Ashdown, vice president for policy and communications at Citizens for Taxpayer Common Sense, a nonpartisan group in Washington that monitors federal spending.
ADCS probed in 2000 by Defense Department
More than five years before former U.S. Rep. Randy "Duke" Cunningham pleaded guilty to taking millions in bribes, the Department of Defense sent the U.S. attorney's office in San Diego an investigative report on a Poway defense company that was later linked to Cunningham.
The 2000 report discussed alleged overbillings by ADCS Inc., a defense firm that in 2005 became a focal point of the Cunningham bribery scandal, Gary Comerford, a spokesman for the Department of Defense Office of Inspector General, said Wednesday.
Kyle (Dusty) Foggo
Prosecutors describe how Foggo was investigated in the late 1980s for punching a bicyclist in a traffic dispute and for numerous relationships with foreign women that could have compromised security. They also recount how Foggo – from his perch at CIA headquarters as executive director – bullied the agency's office of general counsel into hiring his longtime mistress for a $100,000-a-year job and then transferred the woman's supervisor after the supervisor complained about her job performance. For nearly three years, Foggo concealed that his friend Wilkes was the principal figure behind a company for which he had arranged lucrative CIA contracts for supplies and aviation services. Foggo is alleged to have helped Wilkes gain a contract to supply water to CIA agents in Iraq as well as attempting to help him gain a $132 million contract to provide air services to the CIA, even though Wilkes had no known experience in providing water and little experience in air transportation. Federal court filings suggest that the aviation contract had to do with the CIA's rendition program, which used jets to clandestinely transport terrorism suspects to overseas locations. http://www3.signonsandiego.com/stories/2009/feb/26/1n26foggo235311-documents-misdeeds-did-not-hamper-/?uniontrib
Convicted CIA Official Was Suspected of Sharing Woman with Russian Mole. Kyle "Dusty" Foggo's CIA dossier included allegations that he was sharing a woman with a suspected Russian mole, according to a top former spy agency official and other sources. CIA Director Porter J. Goss knew about the allegation when he hired Foggo to be the agency's executive director, its third highest official, an aide said today. But Merrell Moorhead, an aide to Goss at the CIA from 2004 to 2006, said CIA security officials later withdrew that and other serious allegations about Foggo's record and "gave him a clean bill of health." Foggo was sentenced Thursday to three years in prison on a single count of fraud as part of a plea bargain. He is the highest-ranking CIA officer ever to be convicted of a federal felony. http://blogs.cqpolitics.com/spytalk/2009/02/convicted-cia-official-was-sus.html
Foggo pleads guilty to fraud. A former high-ranking CIA official pleaded guilty Monday in Alexandria, Va., to one count of fraud stemming from the Randall “Duke” Cunningham Duncan Hunter bribery scandal that landed the former congressman and a Poway defense contractor in prison. Kyle “Dusty” Foggo, 53, who resigned as the executive director of the CIA in 2006, admitted he used his position to steer millions of dollars in lucrative government contracts toward the company of his best friend Brent Wilkes, a Poway defense contractor, prosecutors said Monday. Foggo and Wilkes hid their relationship by using false cover stories, “straw men” and shell companies to conceal the manipulation of the CIA contracts, according to prosecutors. In return, Foggo accepted tens of thousands of dollars in meals, trips and “sexual companionship,” along with a standing offer for a high-paying job at Wilkes' company, prosecutors said. Foggo is a San Diego native who graduated from San Diego State University before he began a 23-year career with the CIA. He became the agency's executive director, the third-highest position, in November 2004. He faces a maximum penalty of 20 years in prison, a $250,000 fine and three years of supervised release. He has been free on bond, and sentencing is scheduled for January 8, 2009. http://www.signonsandiego.com/news/politics/cunningham/20080929-1220-bn29foggo.html
Ex-CIA official in bribery case might face additional charges. In addition to a broadened conspiracy case, Halpern suggested during the conference in front of U.S. District Judge James Cacheris that the new indictment could include conflict-of-interest charges and allegations of having made false statements. He indicated that Foggo could find himself facing a half-dozen new counts in addition to the existing 30 counts of fraud, conspiracy and money laundering. Cacheris set a trial date of Nov. 3, a move that required Foggo to waive his constitutional right to a speedy trial. http://www.signonsandiego.com/news/metro/20080322-9999-1n22foggo.html
Sex and the C.I.A.
by Ken Silverstein, April 17, 2007 I recently received an advance copy of Seth Hettena's Feasting on the Spoils: The Life and Times of Randy “Duke” Cunningham, History's Most Corrupt Congressman, which will be published this July and which I highly recommend. In addition to being a terrific piece of political reporting, the book is filled with juicy details concerning the seamier side of the Cunningham affair, otherwise known as “Hookergate.”
I was particularly interested in stories Hettena unearthed about Kyle “Dusty” Foggo, whom former CIA director Porter Goss had named as executive director, the agency's number-three official. Foggo resigned last year not long after FBI agents raided his home and office. The Feds suspected that Foggo, who was later indicted, had funneled CIA contracts to his long-time friend Brent Wilkes, the defense contractor who is accused of bribing Cunningham with money and prostitutes.
Some of the more sensational stories in Hettena's book—and he has on-the-record sources—got me thinking. First, didn't Foggo's frequent indiscretions (for example, flashing his agency ID to jump the line at a strip club) raise red flags about his character? Second, wasn't Foggo's outlandish sexual behavior—like, say, publicly performing oral sex on a hooker (hired by Wilkes) at his own bachelor party—just the sort of thing that makes intelligence officials potentially vulnerable to blackmail by a hostile spy service? Third, might it be possible to cynically point to such revelations and use them as a hook for a blog item that combines sex and espionage?
You already know the answer to #3. As to #1 and #2, I spoke with a number of former CIA officers and asked them about the use of sex as a weapon of espionage and whether Foggo-scale misbehavior would typically be deemed a security risk or cause other problems.
The consensus among the officers was that general sexual promiscuity posed no problem, especially if the CIA employee was single. A pattern of continuous adultery might raise eyebrows and lead to a suggestion of counseling, but would not likely be seen as cause for dismissal. However, philandering that raised chain-of-command-issues was a big problem. For example, I was told of one case where a junior officer based in Europe discovered that his wife was sleeping with his station chief. “Everyone got sent home and reprimanded,” said the source.“It was a big mess, but this was seen as a character issue, not a security issue.”
So when does sex become a security problem? The CIA conducts background checks and administers periodic polygraph tests to try to ferret out anything that might make undercover officers vulnerable to blackmail. Until the mid-1990s, homosexuality was considered an immediate cause for dismissal. And “close and continuing contact with a foreign national,” a euphemism for a sexual relationship, was deemed to be another major vulnerability. Any such relationship had to be reported and failure to do so could also lead to dismissal. In fact, during the Cold War, the KGB (and allied services, including the East German Stasi under Markus Wolf, and Cuban intelligence) frequently sought to entrap CIA officers. The KGB believed that Americans were sex-obsessed materialists, and that U.S. spies could easily be lured with the prospect of an easy lay. CIA officers in Russia were strongly warned about “swallows,” the term for the beautiful women the KGB deployed to try to seduce Americans, which was a constant danger at Moscow station. (One former CIA official told me that he and his friends joked that they longed to be given the job of “sexual entrapment training officer.”)
The Russians did have some modest success with this strategy. Back in 1940, the FBI discovered that “single U.S. employees in Moscow frequented a prostitution ring linked to Soviet intelligence and that classified documents were handled improperly and may have been obtained by Soviet workers.” It's also been reported that the CIA's first Moscow station chief fell for a swallow—his maid—and returned home in disgrace.
The Russians and their allies also targeted American military personnel stationed abroad. The best-known case was Clayton Lonetree, a hard-drinking Marine stationed in Moscow who was seduced by a swallow named Violetta Seina, a translator at the U.S. Embassy. Seina hooked up Lonetree with “Uncle Sasha,” his KGB handler, whom he provided with valuable information. Lonetree continued to spy for the Russians after he was transferred to the American embassy in Vienna, but ultimately turned himself in. The only American Marine ever convicted of espionage, Lonetree was released after serving nine years of a 30-year sentence.
Sex wasn't just used by the Russians as a recruitment tool, but also as a means of compromising CIA officers. One source told me: “Let's say a guy has a girlfriend and he decides not to report it. The Russians take pictures of him but don't approach him right away. Five years later, though, when he's stationed in another country, a KGB officer shows him old pictures of him and the girlfriend, and newer pictures of the girl with a young kid. The guy doesn't know for sure if it's his kid or if the girl was working for the KGB, but he's dead, especially because he never revealed the relationship at the time. So he turns down the recruiting pitch but has to go back to the office and write the whole thing up, including what he didn't report five years earlier. He's probably of no further use in that country and he may not be of use anywhere else.”
I asked the former officials if the CIA used sex as a lure to entrap foreign intelligence officials. “Not often,” one told me. “Coercive recruitment generally didn't work. We found that offers of money and freedom worked better.” However, several of the sources said that if the CIA found that a KGB official had a girlfriend, they'd try to recruit her as an access agent who could then be used to turn the Russian. “There was a woman who was promiscuously involved with the Soviet community in Beirut and we put her on the payroll,” one former Middle East hand told me. “I'm not aware that it ever led to anything, but we paid her for quite a while.”
A similar case involved Alexander Ogorodnik, a married official who worked at the Soviet embassy in Bogota in the 1970s. The CIA learned Ogorodnik was having an affair with a local Spanish woman; the Bogota station chief recruited the woman, and she in turn convinced Ogorodnik, who was already deeply disillusioned with the Soviet system, to spy for the CIA. As recounted in The Main Enemy, co-authored by former CIA officer Milt Bearden and James Risen, Ogorodnik became a highly productive agent, especially after he returned to Moscow, where he provided the CIA with piles of diplomatic cables and top-secret documents until the late 1970s, when he was arrested and, before being interrogated, committed suicide by swallowing a cyanide capsule he kept concealed in a modified Montblanc pen given to him by his CIA handler.
One former CIA officer said that while sexual entrapment wasn't generally a good tool to recruit a foreign official, it was sometimes employed successfully to solve short-term problems. For example, this officer was once stationed in a Middle Eastern country and wanted to shut down a known spy from a neighboring state who was also posted there. To make a long story short, the CIA obtained video footage of the man in intimate embrace with his local girlfriend. When the man turned down a recruiting pitch, the agency mailed the images to his wife. What happened next was never precisely clear, but the man was soon recalled to his home country.
This source also said the CIA routinely kept prostitutes on the payroll in Third World countries. “It might cost you $500 a month, which was nothing, and you'd get a wealth of information about who's who and who's doing what to who,” he said. “You were always looking for people like that who could give you visibility into the dark side of the city.”
Back to Dusty Foggo. In addition to stories in Hettena's new book, I've previously reported that Foggo had behaved very badly while based in Honduras in the early-1980s, when the CIA was using the country as a base for covert programs in Central America. He was said to be a regular at a Tegucigalpa bar named Gloria's and at a casino at the Maya Hotel, both places known at the time as hooker hotbeds.
Whether Foggo had official dealings with prostitutes in Honduras or not, this was clearly a big problem. “Dusty would have been the perfect target of a counter-intelligence operation,” said one official who worked in Honduras at the time. “He had access and knowledge, and was reckless and visible. You're only vulnerable if you make yourself vulnerable, and that's what Dusty did.”
This person, and several others, have told me that Foggo continued to display poor judgment throughout his career and had been reprimanded over his personal conduct--and that all of this was well known to Goss before he installed Foggo as executive director. “When we heard Dusty had been picked, we figured we were doomed,” he said. “And we were right.” All of which leads to one of the great, unanswered questions surrounding Foggo: why would Goss possibly have picked him for such a senior position at the agency?
I asked the CIA press office if Foggo's personal conduct had ever raised red flags at the agency. Spokesman Mark Mansfield replied by email, saying, “Given that legal proceedings are underway, it would not be appropriate to comment, other than to point out that Mr. Foggo left the CIA last year and the position he held, Executive Director, doesn't exist any more.”
Foggo is indicted on new charges
Wilkes dealings at heart of case
May 12, 2007 DOWNTOWN SAN DIEGO – Federal prosecutors in San Diego have filed new charges against the former No. 3 official in the CIA, alleging that he improperly tried to steer a $132 million contract to Poway defense contractor Brent Wilkes. The indictment, handed down by a grand jury Thursday, alleges that Kyle “Dusty” Foggo, a former executive director of the CIA, tried to arrange for Wilkes to provide air services and armored vehicles to the agency, even though Wilkes had little relevant experience.
The indictment also says Foggo gave Wilkes “sensitive, internal information related to our national security” to help him gain the contracts.
In the meantime, Wilkes was treating Foggo to thousands of dollars' worth of vacation trips and dinners, and promising him a top job at his company.
Attorneys for Foggo and Wilkes could not be reached for comment yesterday.
Both men pleaded not guilty in February to previouscharges that Foggo improperly helped Wilkes obtain a $1.7 million contract to supply water to CIA agents in Iraq with a 60 percent markup in price. The new charges are a supplement to the previous ones.
In a separate case, Wilkes and New York banker Thomas Michael have pleaded not guilty to bribing former Rep. Randy “Duke” Cunningham, who is serving eight years in prison after admitting he took $2.4 million in illegal gifts from Wilkes and Mitchell Wade, a former Wilkes associate.
Wilkes and Foggo have been best friends since attending junior high school in Chula Vista. They were so close that they named each other as the primary beneficiaries of their insurance policies.
“I am now, have been in the past, and will continue to as long as I breathe, be your partner,” Foggo wrote Wilkes in 2004.
By that time, Foggo was the top logistics officer for the CIA in Frankfurt, Germany, overseeing supply shipments to CIA operatives throughout Europe, Africa and the Middle East. Wilkes was a defense contractor who had landed more than $100 million in contracts with help from Cunningham and other politicians.
In June 2003, Foggo introduced Wilkes to Richard Wenzel, head of Global Transportation Systems, a cargo carrier that does contract work for government agencies.
“I have been throwing millions at his company for about 18 months, and I'm thinking we would be able to leverage some Wilkes Group contracts,” Foggo wrote Wilkes.
Wilkes planned to form a joint venture with Wenzel to gain CIA and military contracts, said a former business partner of Wilkes who declined to be identified for fear of being pulled into court. Wilkes even filed lobbying papers for the joint venture, GTS Globalink.
Wenzel says that although he hired Wilkes to help him get contracts, he did not know of his plans for a joint venture.
“We did sign a government relations contract to help us identify some opportunities,” Wenzel said. “We signed the contract in January 2004 and terminated it in March 2004 when it became clear that Wilkes wasn't going to help us.”
A year after the GTS deal fell through, Foggo – who had been promoted to executive director of the agency – began telling CIA executives that he had a friend who could provide commercial air cover for CIA operations.
At the time, one of Wilkes' subsidiaries, Group W Transportation, was leasing Lear and Gulfstream jets on a time-share basis, ferrying politicians such as Cunningham and Rep. Tom DeLay, R-Texas. But that was the sole known extent of his aviation experience.
Foggo set up meetings between Wilkes and top CIA officials to discuss a $132 million contract for Group W. He also wrote to the chief of the CIA's air operations, offering to use some “EXDIR grease” to help Wilkes get clearance for classified information related to the contract. EXDIR is CIA lingo for “executive director.”
Foggo pressed for the contract to go to Wilkes even after Wilkes' name was publicly associated with the Cunningham scandal in June 2005. He gave up only after Wilkes' home was raided by FBI and other officials in August 2005 as part of the Cunningham investigation.
ean Calbreath: (619) 293-1891; email@example.com
CIA former No.3 man asks for separate trial
May 03, 2007 Attorneys for the CIA's former No. 3 official have asked a San Diego federal court judge to sever his case from that of his childhood friend, Poway defense contractor Brent Wilkes, and to transfer their client's legal proceedings to Washington.
Kyle "Dusty" Foggo and Wilkes were indicted by a San Diego federal grand jury in February on charges of fraud, conspiracy and illegal money transfers -- charges that stem from the investigation that sent former 50th Congressional District Rep. Randy "Duke" Cunningham to prison in early 2006.
Foggo, who grew up with Wilkes in the San Diego area, allegedly used his position to funnel lucrative government contracts to Wilkes and supply inside information to help him land millions of dollars in defense business for his Poway-based ADCS Inc., according to the indictment.
In addition to the indictment against Wilkes and Foggo, a separate indictment filed against Wilkes charges him with bribing Cunningham with lavish vacations, money and evenings with prostitutes to win lucrative defense contracts.
Because of the notoriety of that case and the news media's continuing discussion of the two cases, Foggo's attorneys have asked Judge Larry Alan Burns to sever Foggo's case from that of Wilkes.
"Mr. Foggo is not charged with bribery or with any conduct relating to Mr. Cunningham and is not implicated in any way in the often-reported 'debauchery' or 'prostitution' acts," wrote Foggo attorney Mark J. MacDougall in an April 18 motion.
Among other reasons MacDougall gave for requesting the severance and transfer were:
- Foggo's family lives in the Washington area;
- most of the witnesses for the government and defense live in the same vicinity;
- many of the alleged acts occurred in Eastern Virginia; and
- many of the records in the case are classified and are housed in the Washington area.
Reached by phone in his Washington office Wednesday, MacDougall said he would have no comment.
In other news related to the cases, a real estate auction of Brent Wilkes' home in a Poway gated community was called off Wednesday for unspecified reasons.
Wilkes has suffered a series of financial blows in recent months. First, the tens of millions of dollars in federal contracts that he obtained, allegedly with Cunningham's help, dried up in the aftermath of the government investigation into the former congressman.
Owing hundreds of thousands in back property taxes and with mounting legal expenses, he later sold the building to a Rancho Bernardo company for an undisclosed price.
Over the last several weeks, Wilkes' attorney had repeatedly asked for an extension for the deadline for him to post a $2 million bond in order to remain free pending the outcome of his case.
Paperwork filed with the court April 27 shows that a married couple named Larry and Joyce Wilkes were putting up their San Diego home as a guarantee that Wilkes would show up in court for his hearings. It was not clear Wednesday whether the couple is related to Brent Wilkes.
Foggo has decided to retire
CIA Executive Director Kyle "Dusty" Foggo already was under investigation by the agency's inspector general in connection with his relationship to San Diego businessman Brent Wilkes.
The FBI recently opened its own probe of Foggo, a longtime and close friend of Wilkes, the official said, speaking only on condition of anonymity because the investigation is under way.
Foggo has decided to retire from the CIA following the resignation last Friday of CIA Director Porter Goss, an intelligence official said Monday, also speaking on condition of anonymity. The official noted that new CIA directors have traditionally chosen their own executive directors, who run the agency's day-to-day operations.
Last week, the CIA released a statement on Foggo's behalf in which he denied any improprieties. "Mr. Foggo maintains that government contracts for which he was responsible were properly awarded and administered," the agency said.
Wilkes has been described in court papers as an unindicted coconspirator in a plot to bribe then-Rep. Randy "Duke" Cunningham, now serving a federal prison term for taking $2.4 million from government contractors.
FBI agents also have been looking into whether Wilkes supplied Cunningham with prostitutes, limousines and hotel suites. Foggo sometimes attended poker parties at the hotel rooms, but he said there was nothing untoward about his presence.
"If he attended occasional card games with friends over the years, Mr. Foggo insists they were that and nothing more," the CIA statement said.
CIA Director Porter Goss resigns
A little-known White House advisory board convinced a reluctant President Bush to launch yet another high-profile shakeup of the nation's intelligence community and can CIA Director Porter Goss, sources said yesterday.
Bush had already gotten an earful from Director of National Intelligence John Negroponte on the shortcomings of Goss, but the final push came from the "very alarmed" President's Foreign Intelligence Advisory Board, intelligence and Congressional sources said.
Alarms were set off at the advisory board by a widening FBI sex and cronyism investigation that's targeted Kyle (Dusty) Foggo, the No.3 official at the CIA, and also touched on Goss himself.
The 16-member bipartisan board, now headed by former Goldman Sachs executive Stephen Friedman, has the mandate to conduct periodic assessments on "the quality, quantity and adequacy of intelligence collection."
The investigations have focused on the Watergate poker parties thrown by defense contractor Brent Wilkes, a high-school buddy of Foggo's, that were attended by disgraced former Rep. Randy (Duke) Cunningham and other lawmakers.
Foggo has claimed he went to the parties "just for poker" amid allegations that Wilkes, a top GOP fund-raiser and a member of the $100,000 "Pioneers" of Bush's 2004 reelection campaign, provided prostitutes, limos and hotel suites to Cunningham.
Cunningham is serving an eight-year sentence after pleading to taking $2.4 million in bribes to steer defense contracts to cronies.
Wilkes hosted regular parties for 15 years at the Watergate and Westin Grand Hotels for lawmakers and lobbyists. Intelligence sources said Goss has denied attending the parties as CIA director, but that left open whether he may have attended as a Republican congressman from Florida who was head of the House Intelligence Committee.
logistics chief at the CIA's main base near Frankfurt, Germany
As logistics chief at the CIA's main base near Frankfurt, Germany, Kyle (Dusty) Foggo sat at the crossroads of agency operations. Operatives and VIPs passed through, and former top spies say Foggo was customarily on hand to greet them. After Porter Goss took over as CIA director, many agency veterans were astonished when the former House intel chair chose Foggo, a midranking bureaucrat, to become CIA executive director, the agency's third-ranking official, responsible for day-to-day operations. Insiders attributed his rise to his mastery of office politics. But Foggo's glad-handing has raised awkward questions. Federal prosecutors have accused (as an unindicted co-conspirator) one of Foggo's closest friends, San Diego businessman Brent Wilkes, of participating in a scheme to bribe Randall (Duke) Cunningham, the GOP congressman from San Diego who resigned his seat after pleading guilty to federal corruption and tax charges.
Former Rep. Randy “Duke” Cunningham
Wade gets 30 months in prison in Cunningham case. http://www3.signonsandiego.com/stories/2008/dec/15/congressman-bribery-121508/?zIndex=22743
Contractor in scandal to learn fate soon. Wade cooperated in Cunningham probe. http://www.signonsandiego.com/uniontrib/20081214/news_1m14wade.html
The Cunningham Scandal: A White House Link?
It's a cliche: what a difference a Democratic congressional majority makes. The US attorney scandal, Walter Reed, the suppression of global warming data, the FBI's misuse of national security letters-Democratic legislators have been demanding documents, testimony and answers. Given that they now hold the purse strings and can shoot out subpoenas, the Democrats can no longer be ignored by the White House, executive agencies, and the media. Representative Henry Waxman ¤, the relentless Democratic chairman of the government oversight and reform committee, has been leading the pack in investigating allegations of administration wrongdoing. (See my 2005 profile of Waxman here.) There's a lot for Waxman to cover, and he's being thorough. Consider the letter he sent the White House on Monday.
In that note to Joshua Bolten, President Bush's chief of staff, Waxman requested information about a $140,000 contract the White House awarded in July 2002 to MZM, Inc. This was Mitchell Wade's company. He's the (now former-) military contractor who paid more than $1 million in bribes to Republican Representative Randy "Duke" Cunningham, who's in jail for having accepted these and other bribes in return for steering federal contracts to Wade and Brent Wilkes, another defense contractor. (Wade pleaded guilty; Wilkes has not.) What's intriguing about the contract Wade received from the White House is that its amount equals the price Wade paid in August 2002 to buy the Duke-Stir, the yacht Cunningham lived (and partied) on in Washington. According to the sentencing recommendation memo in Cunningham's case, Cunningham himself negotiated the $140,000 purchase price of the boat in the summer of 2002. This raises the intriguing possibility that Wade that summer needed money to buy Cunningham the yacht and-presto-a White House contract materialized.
And there's more: this contract was Wade's first prime contract with the federal government. The firm had been incorporated in 1993 but had pulled in no revenue through 2001. So Cunningham scandal watchers have wondered, did a White House contract help launch Wade on his felonious ways, and was this contract legitimate?
The modest contract reportedly covered supplying computers and office furniture to Vice President Dick Cheney's office. By the time it was signed, MZM, which had become an approved federal contractor only two months earlier, was already bribing Cunningham, a member of the influential defense appropriations subcommittee. Two months later, in September 2002, MZM hit it big, scoring a $250 million, five-year contract with the General Services Administration. Look at the timeline, one congressional investigator notes: May, MZM was listed as a federal supplier; July, it won a White House contract for $140,000; September, it obtained a $250 million contract. A not-too-suspicious mind could wonder if something-or someone-was juicing the process.
A look at that first contract-and how it had come to be-would seem a no-brainer for investigators. Plenty of MZM's subsequent doings have been probed. But as Waxman notes, "To date, however, there has been no examination of the circumstances surrounding MZM's initial federal contract and the role that White House officials played in the award and execution of the contract."
Months ago, I tried to obtain information about this contract. According to federal procurement records, the contract was for "ADP systems development services" and "custom computer programming services." What did MZM do for the White House under these terms? I contacted the Interior Department. Why Interior? It's home to an interagency contracting office that handles procurement for the White House. This office was established during the Clinton administration as a good-government measure aimed at consolidating contracting efforts. But this procurement reform has become subject to abuse. A recent Senate armed services committee hearing examined how this change in the procurement system has allowed agencies to escape effective oversight. A 2005 Government Accountability Office report slammed the Interior Department's interagency contracting office for "significant problems" in handling Pentagon contracts granted to CACI International for interrogation and "other intelligence-related services" in Iraq.
I asked the Interior Department if I could obtain a copy of the MZM contract under the Freedom of Information Act. The answer: you can submit a FOIA request, but you won't get anything. "It's national security," an Interior official told me, reciting various exemptions. The release of this information, he said, was restricted not by the Interior Department but by the Executive Office of the President because it "includes techniques and procedures used by the Secret Service for law enforcement investigations" and because its disclosure "could reasonably be expected to risk circumvention of the law." He added, "There is no way to get any details."
A committee chairman with access to subpoenas might have better luck. Waxman has asked for all MZM contracts related to the White House and other materials, such as any communications between Wade, Wilkes, MZM officials and White House employees. Waxman's request also covers communications between the White House and Interior relating to MZM-for the obvious reason.
It could be that MZM in the summer of 2002 managed to snag a small White House contract in legitimate fashion, even as Wade was plotting a quick, bribery-greased rise to the top. But given that the Cunningham/MZM tale is one of sleaze and crime-I haven't even mentioned the prostitutes Cunningham received as bribes-Wade's first contract with the Bush administration deserves scrutiny. Republican legislators-no surprise-expressed no interest in this when they ran Congress. And, coincidentally or not, the US attorney in charge of the Cunningham case, Carol Lam, is one of the prosecutors who was fired by the Bush administration. But here comes Waxman, and the Case of MZM's First Contract is alive and open.
Former Rep. Randy “Duke” Cunningham
Congress aides ignored bribery signs: report
October 17, 2006 WASHINGTON (Reuters) - Congressional aides ignored numerous warning signs about disgraced former Rep. Randy "Duke" Cunningham's cozy relationship with contractors who paid him millions in bribes, a report released on Tuesday said.
The report by the U.S. House Intelligence Committee found no evidence that staffers benefited from any of the bribes taken by Cunningham, the California Republican now serving an eight-year prison term after pleading guilty to taking $2.4 million in bribes.
But staffers ignored several warning signs as they helped Cunningham obtain funding for a project earmarked for MZM, a company run by Mitchell Wade, who has pleaded guilty to bribing Cunningham.
"Over time, (committee) staff learned of numerous 'red flags' associated with the counterintelligence project, including frequently expressed questions about the ethics and integrity of Wade, doubts about the value of the project and MZM's performance, and grave concerns about the propriety of the Cunningham-Wade relationship," the report said.
Committee staff helped Cunningham avoid competitive bidding rules to steer at least $70 million to Wade and another contractor, the report said.
The outside investigator who wrote the report for the committee said the Defense Department and the House Appropriations Committee have so far declined to cooperate.
The report was completed in May but has been kept under wraps while committee members argued whether Cunningham should be subpoenaed.
It was finally made public by California Rep. Jane Harman, the committee's top Democrat, who has pushed for Cunningham to appear before the committee, even if he refuses to testify.
"Our committee must examine why 'red flags' did not trigger greater scrutiny of Cunningham's activities and what can be done to prevent this type of abuse in the future," Harman said in a statement.
The Republican chairman of the committee, Michigan Rep. Pete Hoekstra, said Cunningham has offered to testify and blasted Harman for releasing the report without his permission.
"The unilateral decision by Harman to break our bipartisan, written agreement ... by releasing an incomplete, internal committee document that has not been reviewed by the other committee members is disturbing and beyond the pale," Hoekstra said in a statement.
Once-honored name now tops list of infamy
The former Republican lawmaker's sentence of eight years and four months edges out Democrats James Traficant of Ohio, with whom Cunningham served in Congress, and Mario Biaggi of New York.
In 2002, Traficant was sentenced to eight years in prison for conspiracy to commit bribery, obstruction of justice and other charges.
In 1988, Biaggi was sentenced to eight years for racketeering, bribery, conspiracy and other charges for directing federal contracts to a military contractor. Biaggi extorted stock worth about $1.8 million in the case.
Other top sentences include the case of Mel Reynolds, D-Ill., who was sentenced to five years in prison in 1995 for criminal sexual assault, soliciting child pornography and obstruction of justice.
In the celebrated Abscam scandal in 1980, seven members of Congress were convicted of accepting bribes in an FBI sting investigation, but the average amount for each was $45,000. Traficant was convicted of accepting a few thousand dollars.
Dan Rostenkowski, D-Ill., was charged in 1995 in the congressional check-kiting scandal. He was convicted and sentenced to 17 months. His take for that and other crimes totaled less than $1 million in cash and services.
April 15, 2006 ROSEDALE, N.Y. – In 1996, multimillionaire businessman Thomas Kontogiannis threw a party for a Queens school superintendent, who was planning a run for Congress.
The star of the party was Randy “Duke” Cunningham, then a Republican congressman from San Diego.
Today, Cunningham is serving eight years and four months in prison for taking more than $2.4 million in bribes, most of it from two defense contractors.
His old friend Kontogiannis, meanwhile, has emerged as the mystery man – co-conspirator No. 3 – in the continuing investigation.
According to Cunningham's plea agreement, Kontogiannis gave the former congressman $328,000, most of it through an overpayment for Cunningham's boat, the Kelly C.
Kontogiannis and one of his relatives, identified as co-conspirator No. 4, also allowed Cunningham, 63, to use one of the family's mortgage companies to make favorable property deals.
What Kontogiannis, 59, got from the relationship with Cunningham remains unclear.
“It's not the standard bribe scenario,” said a Justice Department official who declined to be identified because the investigation is ongoing. “He had a lot of money. What went to Duke was chump change.”
Group files criminal complaint against Rep. Katherine Harris
We believe the Public Integrity Division of the Department of Justice should conduct an investigation to determine if Representative Katherine Harris (R-FL) has violated U.S. Code 18§201: Bribery of public officials and witnesses.
The Chief Executive of MZM, Inc., Mitchell Wade, recently plead guilty to conspiracy, tax evasion, corrupting defense officials, and election fraud as a result of the investigation into former Representative Randolph "Duke" Cunningham (R-CA). MZM, Inc. is described as a homeland security and counterintelligence company. The statement includes references to other members of Congress in addition to Rep. Cunningham. According to the Statement of Offense, U.S.A. vs. Mitchell J. Wade, filed in the U.S. District Court of the District of Columbia on February 23, 2006:
In early 2005, Wade dined with Representative B in Washington DC restaurant. At this dinner, Wade and Representative B discussed, among other topics, the possibility of MZM's hosting a fundraiser for Representative B later in the year, and the possibility of obtaining funding and approval for a Navy counterintelligence program in Representative B's district and locating an MZM office in that district.
Rep. Harris has been identified publicly as "Representative B." According to The Washington Post:
Washington defense contractor Mitchell J. Wade admitted yesterday in federal court that he attempted to illegally influence Defense Department contracting officials and tried to curry favor with two House members…
Ties to Mitchell Wade
U.S. Rep. Katherine Harris may have given her dirty campaign money to a charity, but she can't pretend to have cleansed herself. "Representative B," as she is called in a federal prosecutor's account of bribery and election fraud by Washington defense contractor Mitchell Wade, is too close to this scandal to brush it off. Voters deserve more answers than the vague statement she released Thursday night.
Leave aside the fact that, in March 2004, Wade personally placed 16 $2,000 campaign checks with the same date in Harris' hands. Now comes the disclosure that one of her aides, Mona Yost, left last May to work for MZM Inc., the company Wade owned. Further, Harris dined with Wade in early 2005 and then asked her Defense Appropriations subcommittee to set aside $10-million for an MZM facility in Sarasota. The subcommittee refused.
This is past the point where Harris can credibly claim ignorance. She claimed in her statement Thursday night that she requested the money to bring jobs to Sarasota, not in exchange for contributions she says she did not know would be illegally reimbursed. Let's get this straight: Harris is handed $32,000 in checks by an executive who wants a $10-million defense contract, she dines with him to discuss the request and then she writes a letter specifically for his project after her other appropriations requests were submitted? And she is unclear about the intent?
The strange case of supernatural water
Florida's citrus crop contributes billions of dollars to the state's economy, so when that industry is threatened, anything that might help is considered. Back in 2001, when citrus canker was blighting the crop and threatening to reduce that vital source of revenue, an interesting — if not quite scientific — alternative was considered.
Katherine Harris, then Florida's secretary of state — and now a member of the U.S. House of Representatives — ordered a study in which, according to an article by Jim Stratton in the Orlando Sentinel, "researchers worked with a rabbi and a cardiologist to test ‘Celestial Drops,' promoted as a canker inhibitor because of its ‘improved fractal design,' ‘infinite levels of order,' and ‘high energy and low entropy.'"
The study determined that the product tested was, basically, water that had apparently been blessed according to the principles of Kabbalic mysticism, "chang[ing] its molecular structure and imbu[ing] it with supernatural healing powers."
Rep. John T. Doolittle
A week before former Rep. Randy “Duke” Cunningham was sentenced to prison, he stressed to the court that a number of other lawmakers also helped arrange federal funding for the defense contractors who bribed him.
None of the lawmakers Cunningham mentioned by name – Reps. Katherine Harris of Florida, Virgil Goode of Virginia and John Doolittle from the Sacramento suburb of Granite Bay – has been accused of criminal wrongdoing. But each has admitted assisting either Mitchell Wade or Brent Wilkes, co-conspirators in the Cunningham case, at a time when the two businessmen were giving them tens of thousands of dollars in political contributions.
And at least one of the lawmakers, Doolittle, received a direct monetary benefit from those contributions through commissions paid to his wife, Julie.
Acting as her husband's campaign consultant, Julie Doolittle charged his campaign and his Superior California Political Action Committee a 15 percent commission on any contribution she helped bring in.