Agents raid defense contractor linked to Cunningham

By: MARK WALKER and WILLIAM FINN BENNETT - Staff Writers | Tuesday, August 16, 2005 10:33 PM PDT ∞

POWAY ---- Federal agents raided the offices of Poway defense contractor ADCS Inc. and the home of the firm's owner Tuesday morning, an action that may be related to a grand jury investigation into whether U.S. Rep. Randy "Duke" Cunningham exerted improper influence in the awarding of Pentagon contracts.

Search warrants were served at ADCS Inc. company headquarters at 13970 Stowe Drive, and at the home of company owner Brent Wilkes at 13712 Paseo Valle Alto.

Agents with the FBI, the IRS and the Pentagon's Defense Criminal Investigative Service took part in the coordinated searches, according to FBI spokesman Kiffa Shirley in San Diego.

Neither Shirley nor Debra Hartman, a spokeswoman with the U.S. attorney's office in San Diego, would say if the searches were directly tied to the Cunningham investigation.

But ADCS has emerged as one of the firms that appeared to have benefited from Cunningham's influence as a member of the House Appropriations Committee and its Defense Subcommittee. ADCS specializes in computerized information management. The firm received nearly $76 million in Defense Department contracts between 2000 and 2004. The company also is a frequent contributor to Cunningham's re-election campaign account, having given the 50th District congressman $21,000 since 1997.

A dozen or more law enforcement agents wearing gold badges entered and exited ADCS headquarters in southern Poway on Tuesday afternoon. None would comment on the raid.

At one point, one of the agents pulled an unmarked blue Ford Econoline van into the entrance of what appeared to be a warehouse at the side of the complex's main building. Inside the building, other officials in ties stood next to boxes and piles of paper. One of them closed the rolling, corrugated steel door.

An employee who works in a neighboring business said that ADCS has a cafeteria and allows employees at his company to have lunch there daily. He said he first realized that something was amiss when he showed up at the ADCS cafeteria just before noon.

"I went over for lunch and it was closed; I saw all the suits, and they all had badges," said Digirad Imaging Solutions employee Raul Juarez.

ADCS also has ties to Mitchell J. Wade, owner of the Washington, D.C., defense firm MZM Inc. Wade gave $5,000 in 2000 to a political action committee controlled by ADCS.

The company has a sister firm, Group W Transportation Inc., which provided air travel to Cunningham on numerous occasions between 2001 and 2003. The company is part owner of a private jet. In an earlier interview, Kenneth Batson, the treasurer of Cunningham's campaign committee said that only under subpoena would he provide information on the nature of Cunningham's travels through Group W.

Cunningham is the subject of a federal grand jury investigation that began in June after a disclosure that Wade had purchased the congressman's Del Mar Heights home in late 2003 for $700,000 more than he would sell it for 11 months later.

MZM reported a tripling of its defense revenues around the same time.

To date, the grand jury has subpoenaed two officials and an employee of a Washington yacht club where Cunningham stayed rent-free aboard a 42-foot boat owned by Wade called the "Duke-Stir." The panel also has ordered at least three Cunningham congressional staffers to appear before the grand jury since it began its work in late June, and has subpoenaed additional information from Wade, sources have confirmed.

Efforts to reach ADCS and Wilkes on Tuesday were unsuccessful. A recording on the company's telephone line said it was closed for the day. The company's Internet Web site also was down and could not be accessed.

Mark Olson, Cunningham's spokesman in his Washington office, said the congressman would have nothing to say about Tuesday's raids.

"We can't comment on an ongoing investigation, and whether the situation with ADCS has anything to do with the congressman has not been determined," Olson said Tuesday evening.

Wilkes is a member of the 22nd District Agricultural Association board, the group that runs the Del Mar Fair. He was appointed to the board last year by Gov. Arnold Schwarzenegger.

Tuesday's raids were conducted in a fashion similar to the July 1 searches that occurred at Cunningham's $2.5 million estate-style home in Rancho Santa Fe and at the offices of MZM and aboard the Duke-Stir.

In those raids, IRS, FBI and Defense Criminal Investigative Service agents arrived unannounced and were seen taking more than a dozen boxes of material from Cunningham's home.

No one has been arrested in connection with the investigation, and Cunningham has steadfastly maintained that he has not committed any crime.

Cunningham bought the Rancho Santa Fe home with the proceeds from the home sale to Wade. Last month, the 63-year-old Republican lawmaker announced he would not seek re-election, citing the grand jury investigation and what he said was his belief that he could not be an effective campaigner while that probe was under way.

The former Top Gun U.S. Navy pilot also said he and his wife, Nancy, would donate a portion of the proceeds from the Rancho Santa Fe home sale to three local charities.

Contact staff writer William Finn Bennett at (760) 740-5426 or wbennett@nctimes.com. Contact staff writer Mark Walker at (760) 740-3529 or mlwalker@nctimes.com.

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