Duke Stir rent would add $600 monthly, analyst says

By: WILLIAM FINN BENNETT - Staff Writer | Monday, June 27, 2005 8:57 PM PDT ∞

Based on current market rates, Rep. Randy "Duke" Cunningham should be paying roughly $600 a month more than he already pays to live on a Washington yacht belonging to a defense contractor, a specialist in yacht sales said Monday.

While Cunningham said in a Thursday news release that he is paying berthing and maintenance fees to stay on the boat, market values suggest he also should be paying rent, said a specialist with San Diego-based Cabrillo Yacht Sales.

Under increasing fire for a real estate deal with the president of the Washington defense company MZM, Inc. and the use of his 42-foot yacht ---- the Duke Stir ---- Cunningham issued a written statement to defend himself on both issues after nearly two weeks of silence on the matter.

In the written statement, Cunningham stated that he has paid more than $8,000 in docking fees and more than $5,000 in maintenance fees over the past 15 months to Mitchell J. Wade.

"There was nothing improper about my arrangement with Mr. Wade because I paid these monthly fees and costs in lieu of rent," he stated in the release.

On Monday, the North County Times obtained more information about the boat. U.S. Coast Guard records show the yacht was manufactured in Pulaski, Wis. An official with Carver Boat Corp., which is headquartered in that city, said that company did manufacture the 42-foot vessel, which has an aft cabin and weighs 34 tons.

Running a search on the yachtworld.com database used for boat sales that is similar to the Multiple Listings Service used by real estate agents, Cabrillo Yacht Sales' Arlan Brown on Monday pegged the market value of the Duke Stir as running roughly between $130,000 and $165,000.

Based on that range of values and including the probable cost of insurance for the boat, Brown said that in addition to the maintenance and docking fees, the rental market value of the yacht would mean that the tenant should be paying approximately $600 more a month.

He noted that in addition to the rental cost of a boat, if it is docked at a marina, there is usually an additional charge involved for anyone who lives on board. In San Diego, for example, those live-aboard fees generally run between $125 and $275 a month, Brown said.

In his prepared statement, Cunningham said that he has been living on the boat since roughly April 2004. If the market value of the additional rent he should have paid is in fact $600, that would mean that he has saved about $9,000 in rental costs.

House Ethics rules prohibit any member of Congress from accepting any gift of more than $50.

An official with Washington-based budget watchdog group Taxpayers for Common Sense said Monday the latest twist in the boat story simply reinforces the perception of wrong doing.

"It's further confirmation that Duke Cunningham has profited from his relationship with Mitchell Wade and raises a series of ethical and legal questions," said Keith Ashdown, Common Sense vice president of policy and communications.

Calling Cunningham's prepared statement on the real estate deal and the boat "pure public relations," Ashdown said, "He is saying that he paid for all these things, but telling the story in such a way to make himself look innocent; we can't rely on the spin of the Congressman."

Between fiscal year 2002 and fiscal year 2004, MZM Inc. received nearly $112 million in federal defense contracts. Ashdown said that his organization conducted a careful review of 90 defense contracts MZM received in that period. Of the 90 contracts Ashdown reviewed, all but five of them were without competitive bidding, he said.

Cunningham sits on the House Appropriations Committee's Defense Subcommittee, which plays a key role in determining which defense firms receive many contracts. Washington insiders have said that individual members can and do influence which firms receive contracts.

Cunningham has declined numerous interviews to talk about his connections to MZM and how much, if any, role he had in helping steer business to the company. Through written statements, however, Cunningham has denied that he was instrumental in obtaining business for MZM.

On Monday, Cunningham's chief of staff, Harmony Allen, referred all calls concerning Cunningham to his Washington-based attorney K. Lee Blalack. Blalack called the North County Times late Monday but said: "We do not have a comment on the matter."

The story on Cunningham's ties to Wade first surfaced two weeks ago with newspaper accounts of Wade having purchased Cunningham's Del Mar home in December 2003 for $1.675 million. In October 2004, Wade sold the house for $975,000 ---- a $700,000 loss. Also in December 2003, Cunningham bought a much larger home in the exclusive community of Rancho Santa Fe, for $2.6 million.

In his Thursday statement, Cunningham wrote that when he sold his Del Mar home to Wade, he relied on the advice of a local Realtor, who provided him with comparable sales in the area. Those comparables showed that the $1.675 million price was in line with market values at the time, Cunningham wrote. However, a local title company recently reviewed sales records for similar-sized properties in the same area between March and December 2003, showing that the average sales price was $1.12 million ---- more than a half-million dollars less than Wade paid for Cunningham's home.

News reports surfaced last week that both the FBI and the U.S. Attorney's office in San Diego are investigating the real estate transactions.

Contact staff writer William Finn Bennett at (769) 740-5426, or wbennett@nctimes.com.

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