Cunningham wins if feds investigate

By: North County Times - Editorial | Tuesday, June 14, 2005 8:11 PM PDT ∞

Our View: U.S. Attorney Carol Lam and the House Ethics Committee must investigate whether North County Congressman Randall "Duke" Cunningham took an illegal gift from a defense contractor.

Our presumption is that such an investigation will clear our congressman, whose district extends from Del Mar to Escondido. Cunningham has represented his district well over his long career in Congress, establishing a reputation as a reasonable and honest guy.

But now a cloud has settled over that reputation. He deserves the benefit of the doubt, and he should rush to clear his name.

According to published reports, Cunningham in November 2003 sold his home in Del Mar for $1.675 million. He went on to pay $2.55 million for a mansion in Rancho Santa Fe.

The buyer of his Del Mar home was Mitchell Wade, owner of MZM Inc., an obscure defense industry player that has recently enjoyed astonishing success snagging federal contracts.

Wade says he sought to raise his local corporate profile. It's a silly assertion. Why not buy an office building? In any case, Wade decided to sell just a month after he bought it. Then, during a historic boom in home prices, the Duke's former house sat vacant on the market for eight months before Wade managed to sell it ---- for just $975,000, or a $700,000 loss.

There are several ways to look at this deal. Perhaps Wade, who runs his company from a Washington, D.C., address, is simply a lousy real estate investor.

He and Cunningham set the sale price based on a market analysis by Elizabeth Todd, a real estate agent with the Willis Allen Co. in Del Mar. (Todd didn't get paid for her work on Cunningham's Del Mar sale, but she earned healthy commissions on Wade's subsequent sale and on Cunningham's purchase in Rancho Santa Fe.)

Of course, critics can argue that the Wade-Cunningham transaction constituted an illegal gift of $700,000, made to gain influence. Federal officials may focus on the remarkable rise of Wade, a former Pentagon program manager who started his company in 1993.

The firm floundered for nearly a decade, but in 2003, Wade won $41 million in defense contracts. In 2004, his company's revenues shot to $66 million.

Cunningham says that he supported Wade's projects much as he supported federal purchases from San Diego County business giants such as Qualcomm and Titan. Such support is no small matter. Cunningham sits on the Defense Appropriations Subcommittee, which makes key decisions about Pentagon spending. The congressman, whose district stretches from Del Mar to Escondido, also sits on the House Intelligence Committee.

Cunningham says he has done nothing wrong; that his help was based on merit, not in return for Wade's purchase. We note that Cunningham could return $700,000 to allay concerns that his home sale didn't reflect market conditions.

Federal investigators must answer several questions in the matter: Why didn't Cunningham list his property on the multiple listing service? Was Wade's purchase an illegal gift? Did Wade make any personal gifts to Cunningham or any other sitting member of Congress? To what extent did Cunningham or any elected official lobby on Wade's behalf? (Some of Wade's government contracts are secret, and thus not open to public scrutiny.)

More broadly, this matter raises age-old questions about influence in Washington. The integrity of Congress and the national security purchasing apparatus is of paramount importance, particularly in a time of war.

Cunningham must take this opportunity to clear his name with a vigorous federal investigation.