Cunningham Scandal
Encyclopedia
The Cunningham scandal is a U.S. political scandal in which defense contractor
s paid bribes
to members of Congress and officials in the U.S. Defense Department
, in return for political favors in the form of federal contracts. Most notable amongst the recipients of the bribes was California
Congressman
Duke Cunningham
who pled guilty to receiving over $2.3 million in bribes. The primary defense contractors were Mitchell Wade
(owner of MZM) and Brent R. Wilkes (owner of ADCS Inc.).
for $1,675,000. A month later, Wade placed it back on the market where it remained unsold for 8 months until the price was reduced to $975,000. Cunningham was a member of the Defense Appropriations Subcommittee
; soon after the purchase, Wade began to receive tens of millions of dollars worth of defense and intelligence
contracts. http://www.signonsandiego.com/news/politics/20050612-9999-1n12windfall.html
Later in June, it was further reported that the yacht
that Cunningham lived on while he was in Washington
was owned by Wade, and that Cunningham was paying only for maintenance, not rent. http://www.nctimes.com/articles/2005/06/16/news/top_stories/2005-6-16-22-58.txt The Federal Bureau of Investigation
launched an investigation regarding the real estate
transaction. Cunningham's home, MZM's Corporate Offices and Wade's home were all simultaneously raided by a number of federal agencies with warrants on July 1, 2005. http://nctimes.com/articles/2005/07/02/news/top_stories/20_13_257_1_05.prt
The money and favors provided to Cunningham were in exchange for helping win Pentagon work. http://www.nctimes.com/articles/2006/02/24/news/top_stories/20_48_242_23_06.txt "Government procurement records show that MZM, which Wade started in 1993, did not report any revenue from prime contract awards until 2003", http://www.washingtonpost.com/wp-dyn/content/article/2005/06/27/AR2005062701856.html but starting in May 2002 they were awarded contracts in the tens of millions of dollars which then grew to well over $150 million. http://www.usatoday.com/news/washington/2005-11-08-pentagon-spending_x.htm
"Prosecutors also laid out a second, separate conspiracy in which Wade was alleged to have paid bribes to a Defense Department official and other employees in return for their help in awarding contracts to his company. Wade pleaded guilty to this scheme as well. The Pentagon employees were not named in court filings." http://www.cnn.com/2006/POLITICS/02/24/congressman.bribery.ap/
On April 27, 2006, Scot J. Patrow, writing for The Wall Street Journal
, reported prosecutors were investigating whether other members of Congress or their staff received the services of prostitutes provided at Cunningham's request by Mitchell Wade
. Patrow also reported that Brent R. Wilkes had indicated that he would fight any charges. Wade implicated Wilkes in the prostitution scheme.
As The Washington Post
put it, "Wilkes was an obscure California contractor and lobbyist
until his name surfaced last year as one of two defense contractors alleged to have given Cunningham $2.4 million in cash and other benefits in return for Cunningham's steering government business their way. One of Wilkes's companies received more than $80 million in Pentagon
contracts over the past decade that stemmed from earmarks that Cunningham slipped into spending bills."
"He snared a $1 million Pentagon contract in 1997, which Cunningham proclaimed "an asset" to San Diego
. In 1999, ADCS was awarded a $9.7 million contract to convert documents in Panama
. Subsequently, the company began collecting more than $20 million a year in defense business."
In return, Wilkes rented hospitality suites at the Watergate Hotel and at the Westin Grand Hotel for Cunningham and other legislators and their guests. Wilkes hired Shirlington Limousine & Transportation Service of Virginia
, starting in 1990, for entertainment at the Watergate Hotel. In 2005, the Department of Homeland Security granted Shirlington a $21 million contract. According to reports in the Wall Street Journal and the San Diego Union-Tribune, prostitutes regularly accompanied guests at the suites.
However, "[t]he military never asked for the ADCS projects. In fact, in 2000 the Pentagon's inspector general blasted the company's biggest project, a $9.7 million contract to convert documents in Panama. The report said the program was created under pressure from two congressmen, whom Pentagon procurement officials have identified as Cunningham and Duncan Hunter
(R-Calif), chairman of the Armed Services Committee
," to whom Cunningham had also donated heavily.
The Washington Post
reported: "The congressman identifiable as Goode received $46,000 in such disguised contributions in 2003 and 2005, the court papers said. That was part of about $90,000 Wade and his workers contributed to Goode. Wade then asked the member to request appropriations for an MZM facility in his district, the Wade papers said, and a Goode staff member confirmed to Wade that the bill would include $9 million in funding." http://www.washingtonpost.com/wp-dyn/content/article/2006/02/24/AR2006022401737.html
The paper also noted: "The member identifiable as Harris received $32,000 in illegal donations from Wade and his employees in 2004. Documents filed with Wade's plea say that he took Harris to dinner early last year, where they discussed the possibility of another fundraiser and the possibility of getting funding for a Navy counterintelligence program in the member's district. One source familiar with the inquiry said Harris made such a request for funding, but it was not granted." http://www.washingtonpost.com/wp-dyn/content/article/2006/02/24/AR2006022401737.html
Defense contractor
A defense contractor is a business organization or individual that provides products or services to a military department of a government. Products typically include military aircraft, ships, vehicles, weaponry, and electronic systems...
s paid bribes
Bribery
Bribery, a form of corruption, is an act implying money or gift giving that alters the behavior of the recipient. Bribery constitutes a crime and is defined by Black's Law Dictionary as the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or...
to members of Congress and officials in the U.S. Defense Department
United States Department of Defense
The United States Department of Defense is the U.S...
, in return for political favors in the form of federal contracts. Most notable amongst the recipients of the bribes was California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
Congressman
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
Duke Cunningham
Duke Cunningham
Randall Harold Cunningham , usually known as Randy or Duke, is United States Navy veteran, convicted felon, and former Republican member of the United States House of Representatives from California's 50th Congressional District from 1991 to 2005.Cunningham resigned from the House on November 28,...
who pled guilty to receiving over $2.3 million in bribes. The primary defense contractors were Mitchell Wade
Mitchell Wade
Mitchell J. Wade , is an American defense contractor implicated in the events that led to the 2005 resignation of U.S. Representative Randy "Duke" Cunningham....
(owner of MZM) and Brent R. Wilkes (owner of ADCS Inc.).
Mitchell Wade
In June 2005 it was revealed that Wade had bought Cunningham's house in Del MarDel Mar, California
Del Mar is an upscale beach town in San Diego County, California. The population was 4,161 at the 2010 census, down from 4,389 at the 2000 census. The San Diego County Fair is hosted on the Del Mar Fairgrounds every summer. Del Mar is Spanish for "of the sea" or "by the sea", because it is located...
for $1,675,000. A month later, Wade placed it back on the market where it remained unsold for 8 months until the price was reduced to $975,000. Cunningham was a member of the Defense Appropriations Subcommittee
United States House Committee on Appropriations
The Committee on Appropriations is a committee of the United States House of Representatives. It is in charge of setting the specific expenditures of money by the government of the United States...
; soon after the purchase, Wade began to receive tens of millions of dollars worth of defense and intelligence
Intelligence (information gathering)
Intelligence assessment is the development of forecasts of behaviour or recommended courses of action to the leadership of an organization, based on a wide range of available information sources both overt and covert. Assessments are developed in response to requirements declared by the leadership...
contracts. http://www.signonsandiego.com/news/politics/20050612-9999-1n12windfall.html
Later in June, it was further reported that the yacht
Yacht
A yacht is a recreational boat or ship. The term originated from the Dutch Jacht meaning "hunt". It was originally defined as a light fast sailing vessel used by the Dutch navy to pursue pirates and other transgressors around and into the shallow waters of the Low Countries...
that Cunningham lived on while he was in Washington
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
was owned by Wade, and that Cunningham was paying only for maintenance, not rent. http://www.nctimes.com/articles/2005/06/16/news/top_stories/2005-6-16-22-58.txt The Federal Bureau of Investigation
Federal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...
launched an investigation regarding the real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
transaction. Cunningham's home, MZM's Corporate Offices and Wade's home were all simultaneously raided by a number of federal agencies with warrants on July 1, 2005. http://nctimes.com/articles/2005/07/02/news/top_stories/20_13_257_1_05.prt
The money and favors provided to Cunningham were in exchange for helping win Pentagon work. http://www.nctimes.com/articles/2006/02/24/news/top_stories/20_48_242_23_06.txt "Government procurement records show that MZM, which Wade started in 1993, did not report any revenue from prime contract awards until 2003", http://www.washingtonpost.com/wp-dyn/content/article/2005/06/27/AR2005062701856.html but starting in May 2002 they were awarded contracts in the tens of millions of dollars which then grew to well over $150 million. http://www.usatoday.com/news/washington/2005-11-08-pentagon-spending_x.htm
"Prosecutors also laid out a second, separate conspiracy in which Wade was alleged to have paid bribes to a Defense Department official and other employees in return for their help in awarding contracts to his company. Wade pleaded guilty to this scheme as well. The Pentagon employees were not named in court filings." http://www.cnn.com/2006/POLITICS/02/24/congressman.bribery.ap/
On April 27, 2006, Scot J. Patrow, writing for The Wall Street Journal
The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
, reported prosecutors were investigating whether other members of Congress or their staff received the services of prostitutes provided at Cunningham's request by Mitchell Wade
Mitchell Wade
Mitchell J. Wade , is an American defense contractor implicated in the events that led to the 2005 resignation of U.S. Representative Randy "Duke" Cunningham....
. Patrow also reported that Brent R. Wilkes had indicated that he would fight any charges. Wade implicated Wilkes in the prostitution scheme.
Brent Wilkes
In 1995 Brent R. Wilkes started ADCS Inc. ("Automated Document Conversion Systems"). With Cunningham's help, he began winning contracts from the Pentagon.As The Washington Post
The Washington Post
The Washington Post is Washington, D.C.'s largest newspaper and its oldest still-existing paper, founded in 1877. Located in the capital of the United States, The Post has a particular emphasis on national politics. D.C., Maryland, and Virginia editions are printed for daily circulation...
put it, "Wilkes was an obscure California contractor and lobbyist
Lobbying
Lobbying is the act of attempting to influence decisions made by officials in the government, most often legislators or members of regulatory agencies. Lobbying is done by various people or groups, from private-sector individuals or corporations, fellow legislators or government officials, or...
until his name surfaced last year as one of two defense contractors alleged to have given Cunningham $2.4 million in cash and other benefits in return for Cunningham's steering government business their way. One of Wilkes's companies received more than $80 million in Pentagon
The Pentagon
The Pentagon is the headquarters of the United States Department of Defense, located in Arlington County, Virginia. As a symbol of the U.S. military, "the Pentagon" is often used metonymically to refer to the Department of Defense rather than the building itself.Designed by the American architect...
contracts over the past decade that stemmed from earmarks that Cunningham slipped into spending bills."
"He snared a $1 million Pentagon contract in 1997, which Cunningham proclaimed "an asset" to San Diego
San Diego, California
San Diego is the eighth-largest city in the United States and second-largest city in California. The city is located on the coast of the Pacific Ocean in Southern California, immediately adjacent to the Mexican border. The birthplace of California, San Diego is known for its mild year-round...
. In 1999, ADCS was awarded a $9.7 million contract to convert documents in Panama
Panama
Panama , officially the Republic of Panama , is the southernmost country of Central America. Situated on the isthmus connecting North and South America, it is bordered by Costa Rica to the northwest, Colombia to the southeast, the Caribbean Sea to the north and the Pacific Ocean to the south. The...
. Subsequently, the company began collecting more than $20 million a year in defense business."
In return, Wilkes rented hospitality suites at the Watergate Hotel and at the Westin Grand Hotel for Cunningham and other legislators and their guests. Wilkes hired Shirlington Limousine & Transportation Service of Virginia
Virginia
The Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...
, starting in 1990, for entertainment at the Watergate Hotel. In 2005, the Department of Homeland Security granted Shirlington a $21 million contract. According to reports in the Wall Street Journal and the San Diego Union-Tribune, prostitutes regularly accompanied guests at the suites.
However, "[t]he military never asked for the ADCS projects. In fact, in 2000 the Pentagon's inspector general blasted the company's biggest project, a $9.7 million contract to convert documents in Panama. The report said the program was created under pressure from two congressmen, whom Pentagon procurement officials have identified as Cunningham and Duncan Hunter
Duncan Hunter
Duncan Lee Hunter is an American politician. He was a Republican member of the House of Representatives from California's 52nd, 45th and 42nd districts from 1981 to 2009....
(R-Calif), chairman of the Armed Services Committee
Armed Services Committee
The term Armed Services Committee may refer to:*United States House Committee on Armed Services*United States Senate Committee on Armed Services...
," to whom Cunningham had also donated heavily.
Other Members of Congress involved
Reuters reported:
In violation of campaign-finance laws, Wade was found to have reimbursed employees at his company, MZM Inc., who made campaign contributions to two other members of Congress.
Campaign-finance records show that those lawmakers were Virginia Republican Rep. Virgil GoodeVirgil GoodeVirgil Hamlin Goode, Jr. , is an American politician, last serving as a Republican member of the United States House of Representatives. He represented the 5th congressional district of Virginia from 1997 to 2009...
and FloridaFloridaFlorida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
RepublicanRepublican Party (United States)The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
Rep. Katherine HarrisKatherine HarrisKatherine Harris is an American Republican politician, former Secretary of State of Florida, and former member of the United States House of Representatives. Harris won the 2002 election to represent Florida's 13th congressional district in the U.S. House of Representatives. She held that post...
. The charges indicate Wade did not inform either one that the contributions were unlawful.
A spokeswoman for Harris, who as Florida's secretary of state played a key role in the 2000 disputed presidential electionUnited States presidential election, 2000The United States presidential election of 2000 was a contest between Republican candidate George W. Bush, then-governor of Texas and son of former president George H. W. Bush , and Democratic candidate Al Gore, then-Vice President....
between George W. BushGeorge W. BushGeorge Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
and Al GoreAl GoreAlbert Arnold "Al" Gore, Jr. served as the 45th Vice President of the United States , under President Bill Clinton. He was the Democratic Party's nominee for President in the 2000 U.S. presidential election....
, said she had given the $52,000 she received from MZM employees to charity.
A spokesman for Goode was not immediately available for comment. According to the charges he received at least $46,000 in illegal contributions from MZM.
MZM operates several facilities in Goode's south-central Virginia district, including one that conducts background checks on foreign-owned defense contractors. http://www.washingtonpost.com/wp-dyn/content/article/2006/02/24/AR2006022401071.html
The Washington Post
The Washington Post
The Washington Post is Washington, D.C.'s largest newspaper and its oldest still-existing paper, founded in 1877. Located in the capital of the United States, The Post has a particular emphasis on national politics. D.C., Maryland, and Virginia editions are printed for daily circulation...
reported: "The congressman identifiable as Goode received $46,000 in such disguised contributions in 2003 and 2005, the court papers said. That was part of about $90,000 Wade and his workers contributed to Goode. Wade then asked the member to request appropriations for an MZM facility in his district, the Wade papers said, and a Goode staff member confirmed to Wade that the bill would include $9 million in funding." http://www.washingtonpost.com/wp-dyn/content/article/2006/02/24/AR2006022401737.html
The paper also noted: "The member identifiable as Harris received $32,000 in illegal donations from Wade and his employees in 2004. Documents filed with Wade's plea say that he took Harris to dinner early last year, where they discussed the possibility of another fundraiser and the possibility of getting funding for a Navy counterintelligence program in the member's district. One source familiar with the inquiry said Harris made such a request for funding, but it was not granted." http://www.washingtonpost.com/wp-dyn/content/article/2006/02/24/AR2006022401737.html
External links
- Mitchell Wade's Plea Agreement
- Pentagon Ends New Work On D.C. Firm's Contract: MZM to Name New CEO as Relationship With Congressman Is Under Investigation, by Renae Merle and R. Jeffrey Smith, The Washington PostThe Washington PostThe Washington Post is Washington, D.C.'s largest newspaper and its oldest still-existing paper, founded in 1877. Located in the capital of the United States, The Post has a particular emphasis on national politics. D.C., Maryland, and Virginia editions are printed for daily circulation...
, June 28, 2005. - Secret military spending gets little oversight, by Matt Kelley and Jim Drinkard, USA TodayUSA TodayUSA Today is a national American daily newspaper published by the Gannett Company. It was founded by Al Neuharth. The newspaper vies with The Wall Street Journal for the position of having the widest circulation of any newspaper in the United States, something it previously held since 2003...
, November 9, 2005. - "Contractors Linked to Bribery Case Worked Together," by Charles Babcock, The Washington Post, November 30, 2005.
- Contractor pleads guilty in Cunningham bribery scandal, by Finlay Lewis, San Diego Union-Tribune, February 24, 2006.
- Defense contractor pleads guilty in congressman bribery scheme, by Mark Sherman, AP, Mercury News, February 24, 2006.
- Cunningham cohort Mitchell Wade enters guilty pleas by Mark Walker and William Finn Bennett, North County Times, February 24, 2006.
- Defense contractor: I paid $1 million in bribes, cnn.com, February 24, 2006.
- Mitchell Wade's campaign contribution report, NewsMeat