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Congressman Accepts Bribes From Defense Contractor
Topic Started: Nov 28 2005, 10:40 PM (276 Views)
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San Diego-area Rep. Cunningham pleads guilty to bribery, resigns

ELLIOT SPAGAT

Associated Press

SAN DIEGO - Rep. Randy "Duke" Cunningham, a Vietnam War ace and eight-term congressman, resigned Monday after pleading guilty to taking $2.4 million in bribes from defense contractors and others that went to pay for a condominium in Virginia, a Rolls Royce and other luxury items.

Prosecutors said Cunningham, a Republican, used his influential position as a member of a House Appropriations subcommittee to secure defense contracts worth tens of millions of dollars for people who bribed him.

"In my life, I have had great joy and great sorrow. And now I know great shame," Cunningham said, choking up as he announced his resignation outside federal court. Until entering his pleas, Cunningham had insisted he had done nothing wrong.

The case grew from an investigation into the sale of Cunningham's home in wealthy Del Mar to a wide-ranging conspiracy involving payments in checks totaling over $1 million, cash, vacations and antiques from four alleged co-conspirators whom prosecutors did not identify by name.

Among other things, Cunningham admitted in his plea agreement that he was given $1.025 million to pay down the mortgage of a five-bedroom, eight-bathroom Spanish colonial estate he bought with money from the Del Mar home sale; $200,000 as a downpayment for an Arlington, Va., condo; $13,500 to buy a Rolls Royce; and $2,081 for his daughter's graduation party.

Just before resigning, Cunningham entered pleas in U.S. District Court to charges of conspiracy to commit bribery, mail fraud and wire fraud, and tax evasion for underreporting his income in 2004.

The tax evasion charge came after Cunningham reported joint income with his wife of $121,079 and claimed he was due a refund of $8,504. Prosecutors said his income was $1,215,458 and he owed $385,077 in taxes.

"He did the worst thing an elected official can do - he enriched himself through his position and violated the trust of those who put him there," U.S. Attorney Carol Lam said in a prepared statement.

Cunningham, 63, was released on his own recognizance until a Feb. 27 sentencing. He could receive a maximum sentence of 10 years in prison. In his statement, Cunningham said he will cooperate with authorities in the investigation and would like to begin serving a prison term.

Gov. Arnold Schwarzenegger will have 14 days to set a date for an election to replace Cunningham, the governor's office said.

The case began when authorities started investigating whether Cunningham inflated the price of his home in Del Mar when he sold it to defense contractor Mitchell Wade for $1,675,000 in 2003. Wade later put the Del Mar house back on the market and sold it after nearly a year for $975,000 - a loss of $700,000.

Though the plea documents do not name the alleged co-conspirators, details such as business addresses and occupations make some of their identities apparent.

One was Wade, who served as president of MZM Inc., a Washington, D.C., firm that does classified intelligence work for the military.

The documents also suggest that another conspirator was Brent Wilkes, an associate of Wade's who headed a defense contracting company called ADCS Inc. that also provided campaign cash and favors to Cunningham while reaping valuable contracts. ADCS specializes in turning paper records into digital files.

Wilkes also owned a small private air carrier, Group W Transport, that flew Cunningham and other lawmakers - including former House Majority Leader Tom DeLay, R-Texas - to fund-raisers and other events in a Lear jet, The San Diego Union-Tribune has reported.

Another co-conspirator appears to be New York developer Thomas Kontogiannis. Cunningham wrote to prosecutors in 2000 on Kontogiannis' behalf when the developer was under investigation in a bribery and kickback scheme involving school computer contracts. Kontogiannis ultimately pleaded guilty to fraud charges.

Cunningham later made $400,000 selling his 65-foot flat-bottom riverboat to Kontogiannis.

Meanwhile a mortgage company run by Kontogiannis' nephew and daughter helped Cunningham finance the condominium in Virginia and his house in Rancho Santa Fe.

Attorneys for Wilkes and Wade declined comment Monday and an attorney for Kontogiannis did not immediately return a call for comment.

The plea said checks from conspirators to Cunningham were often made out to his company, Top Gun Enterprises Inc., which sold his book "Fox Two," $595 Buck knives emblazoned with the congressional seal and other memorabilia over the Internet.

Cunningham was known on Capitol Hill for his interest in defense issues and his patriotic speeches on the House floor, including one in favor of a constitutional amendment to ban flag burning. He drew little notice outside his San Diego-area district before Copley News Service reported last June that he'd sold the home to Wade.

Cunningham's pleas came amid a series of Republican scandals. Rep. Tom DeLay, R-Texas, had to step down as majority leader after a Texas prosecutor indicted him in a campaign finance case; a stock sale by Senate Majority Leader Bill Frist, R-Tenn., is being looked at by regulators; and Vice President **** Cheney's chief of staff was indicted in the CIA leak case.

Cunningham is not the first congressman to commit bribery.Former Rep. James Traficant, D-Ohio, was sentenced to eight years in prison after being convicted on charges from a 2001 indictment accusing him of racketeering and accepting bribes.

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Associated Press Writer Erica Werner in Washington contributed to this story.

http://www.mercurynews.com/mld/mercurynews...ia/13278207.htm
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