Monday, May 01, 2006

Know When To Fold 'Em

So, two men involved in Duke Cunningham's mass circle-jerk of corruption have been trading hookers for favors in Washington for the last fifteen years. They play a different sort of poker in Washington, but this game's getting some real media attention.
Of course, nothing draws the media quite so well as a weak hand. It makes you wonder whose turn it will be next.


Blogger Management said...

In 1993, Mitchell Wade founded MZM, Inc., a homeland security and counterintelligence company that has received federal contracts for work in Iraq.

Wade resigned from his position as president of MZM, Inc. in June of 2005, when reports emerged that Wade had bribed Rep. Randy "Duke" Cunningham. He has since pled guilty to conspiring to bribe Cunningham, among other crimes.

Key Points:

Wade pled guilty to conspiracy, tax evasion, corrupting Defense officials, and election fraud.

On Feb. 24, 2006, Wade pled guilty to conspiring to funnel more than $1 million to Rep. Cunningham.

He also pled guilty to corrupting Defense officials. For instance, while Robert Fromm was a program manager at the Army's National Ground Intelligence Center, Wade hired his son at MZM. Fromm used his position to help MZM obtain contracts, and then eventually moved over to MZM himself.

Wade also used his employees and their spouses to make "straw" contributions to Reps. Virgil Goode (R-VA) and Katharine Harris (R-FL), identified as Representatives A & B in his guilty plea, respectively. The employees and spouses were reimbursed for the money they gave, which is illegal. Goode received $46,000 in illegal contributions, and Harris received $32,000.

Wade used several means to bribe Cunningham personally.

Wade bought Cunningham's house in Del Mar, California, for $700,000 more than its market price.

During time spent in Washington, D.C., Cunningham lived aboard a yacht called the "Duke-Stir," which was owned by Wade. Meanwhile, Wade was paying for repairs to Cunningham's own yacht, the "Kelly C."

According to Cunningham's guilty plea, Wade also picked up the bill for Cunningham's various other luxuries including a Rolls Royce, antique furniture, oriental rugs, and his daughter's graduation party.

Cunningham used his position on the House Defense Appropriations Subcommittee to steer federal security contracts to MZM, Inc.

From 2002 to 2005, MZM, Inc. received $163 million in federal contracts, and Cunningham has said that he supported "funding requests benefiting MZM."

In 2004, MZM, Inc. received 56 defense intelligence contracts totaling $68,645,909. Most of the contracts were given through "blanket purchase agreements," meaning there was no competition from other companies.

Before starting MZM, Inc., Wade worked for Brent Wilkes, who is identified as "Coconspirator #1" in Cunningham's plea agreement.

As recently as 2000, Wade listed himself as an employee on political donations of Brent Wilkes' ADCS, Inc.

The two continued worked together, contracts sometimes going through MZM to Wilkes' company.

Wade's company contributed heavily to Rep. Virgil Goode's campaign.

In 2004, MZM was the largest contributor to Rep. Virgil Goode's campaign, giving a total $48,551 including employee donations.

Goode sponsored the $3.6 million Foreign Supplier Assessment Center in his Virginia district, which MZM, Inc. was hired to run. He requested a total of $9 million in earmarked appropriations for MZM.

The center was not a Pentagon priority nor was it requested by the Defense Department.

Wade demanded that his employees at MZM, Inc. donate to the company PAC that benefited Cunningham

Wade threatened to fire employees of MZM if they refused to make contributions to the company's PAC, which benefited Cunningham and other members of Congress.

Rep. Katherine Harris' top contribution in 2004 was the illegal funds from MZM, Inc.

Rep. Katherine Harris (R-CA), a member of the House Homeland Security Committee, received $10,000 from MZM, Inc. and $32,000 from MZM employees, most of them written on the same day. She later attempted to get MZM a $10 million for a U.S Naval Criminal Investigative Services project, but failed to procure the funding.

Harris claimed that she was not aware that the contributions were illegal. However, Wade has said that he and Harris spoke over dinner about getting funding for MZM, Inc. for the Naval counterintelligence program. [AP]

Research by Joshua Hudelson and Amram Migdal

2:04 PM  
Blogger Management said...

Brent Wilkes bribed Rep. Randy "Duke" Cunningham (R-CA), according to Cunningham's Nov. 28, 2005 plea agreement.

Aside from serving as San Diego County finance co-chairman for Gov. Arnold Schwarzenegger and state finance co-chairman for President Bush (he was a "Pioneer"), Brent Wilkes has worked as a federal defense contractor and lobbyist since the early 1990s. Since 1996, he has received at least $95 million in government contracts for the small family of firms based in his headquarters in Poway, Calif.

Key Points

Wilkes played a major role in the bribery scandal that forced Duke Cunningham from office in 2005.

Brent Wilkes has been identified as "Coconspirator No. 1" in Duke Cunningham's Nov. 28, 2005 plea agreement.

Wilkes gave more than $630,000 in illegal cash and favors to Duke Cunningham, including $525,000 to pay off a mortgage on Cunningham's new Rancho Santa Fe home in 2004. The plea agreement charged that in return for the payments, Cunningham "used his public office and took other official action to influence U.S. Department of Defense personnel to award and execute government contracts." Cunningham helped Wilkes win at least $80 million in Pentagon contracts.

Wilkes has not been formally charged in the Cunningham case. Prosecutors say the investigation is continuing.

Wilkes targeted contributions to members of Congress in order to secure defense contracts through congressional earmarks.

From 1995 to 2005, Wilkes and his associates have spent at least $600,000 on contributions to politicians and their political action committees and $1.1 million on lobbying, developing relationships with Republican lawmakers, including Reps. Tom DeLay (R-TX), Duncan Hunter (R-CA), John Doolittle (R-CA), Roy Blunt (R-MO), and Cunningham.

Wilkes won tens of millions of dollars worth of defense contracts for his companies through the process of closed-door congressional earmarking of the federal budget. Many of the contracts Wilkes secured were for projects the Pentagon never requested.

The timing of Wilkes' many political donations closely parallels the approval of earmarks for Wilkes' companies. Travis County District Attorney Ronnie Earle, who is prosecuting Tom DeLay in Texas, subpoenaed records related to contributions to DeLay by Brent Wilkes' business associates at his company PerfectWave.

Aside from monetary contributions, Wilkes provided many favors to congressmen, including the use of a corporate jet.

Wilkes took Cunningham on several out-of-state trips on a corporate jet, and let Cunningham use his powerboat as well. Tom DeLay flew on Wilkes' jet at least three times between 2003 and 2005, and sources claim that House Speaker Dennis Hastert flew on Wilkes' jet several times as well.

Wilkes won contracts for his company PerfectWave through earmarks by Representative John Doolittle.

Rep. John Doolittle, a member of the House Appropriations Committee, admitted to steering $37 million in defense contracts toward PerfectWave between 2002 and 2005, contracts not requested by the Navy. PerfectWave donated at least $85,000 to Doolittle and his political action committee during the same time period.

In a January 2006 statement Doolittle claimed his backing for PerfectWave was "based solely on the project's merits and the written support of the military." However, the only evidence Doolittle's office could offer to show military support for PerfectWave was a letter of praise from Marine Corps program manager Robert Lusardi, dated two and a half years after PerfectWave got its first earmark.

Wilkes' lobbying firm, Group W, retained Alexander Strategy Group, a lobbying firm known for direct access to Tom DeLay.

Less than a month after Wilkes took over at PerfectWave in 2002, he hired Alexander Strategy Group to help the company win appropriations from defense and intelligence agencies. Alexander Strategy Group was a lobbying firm headed by Tom DeLay's former Chief of Staff, Ed Buckham, and staffed by former DeLay employees. The firm had a well-publicized reputation as a conduit to DeLay's office. Between 2002 and 2005, Wilkes paid the firm $630,000 in lobbying fees.

Wilkes was sued by a former business partner, for whom Wilkes promised he could procure $25 million in defense contracts but failed to do so.

In 2003 Wilkes told business partner Randy Beck that for $1.5 million in lobbying fees and related expenses, he could get a $25 million Navy contract for technologies that Beck was developing. Beck agreed to the deal and mortgaged his home to raise money to pay Wilkes' lobbying fees.

Wilkes failed to obtain the contracts that he promised. Despite his failure to deliver, Wilkes demanded that Beck pay the remainder of the lobbying fees. In July 2005 the two men sued each other, with Wilkes seeking payment for his services and Beck accusing Wilkes of a breach of contract. The matter was settled out of court last fall, with both parties bound by an agreement not to discuss the outcome.

Research by Ben Craw and Amram Migdal

2:04 PM  
Blogger Management said...

April 28, 2006
FBI Probes Contractor, Ex - Lawmaker Ties

Filed at 8:55 p.m. ET

WASHINGTON (AP) -- FBI agents are investigating whether a defense contractor provided prostitutes, limousines and hotel suites to a lawmaker who has been convicted on bribery charges, two federal officials said Friday.

Investigators have contacted Washington-area escort services, two hotels and a limousine company in recent weeks, one official said.

The allegations were raised by Mitchell Wade, another defense contractor who also has pleaded guilty to charges stemming from the bribery conspiracy involving former Rep. Randy ''Duke'' Cunningham, the officials said. Cunningham is serving a prison term of eight years, four months after pleading guilty in November to taking $2.4 million in homes, yachts and other bribes.

Wade is cooperating with investigators as part of his plea agreement in February. He has told them that Brent Wilkes, a San Diego defense contractor who has been identified as a co-conspirator, secured prostitutes, limousines and suites at two Washington hotels for Cunningham, the officials said. They spoke on condition of anonymity because the investigation is continuing.

Wilkes, founder of ADCS Inc., has not been charged. Mike Lipman, his attorney, did not return messages left seeking comment. Reginald Brown, Wade's attorney, declined comment Friday.

One official said agents have been checking out investigative leads, but so far have been unable to confirm that, even if true, the prostitutes were part of the bribery scheme. Investigators have not turned up evidence that other lawmakers were involved, the official said.

The investigation, spawned by reports of the former California congressman's extravagant lifestyle, is continuing both in Washington and San Diego, the officials said.

Justice Department and FBI spokesmen declined to comment on the investigation.

The allegations involving prostitutes have previously been reported by The Wall Street Journal and The San Diego Union-Tribune.

2:04 PM  
Blogger Management said...

Contractors' Hooker Ring Lasted 15 Years
By Justin Rood - April 28, 2006, 7:54 AM

More details this morning about the Brent Wilkes-Mitch Wade hooker ring, courtesy of the San Diego Union-Tribune:

Several of Wilkes' former employees and business associates say he used the hospitality suites over the past 15 years to curry favor with lawmakers as well as officials with the CIA, where both Wilkes and Wade sought contracts.

Wilkes hosted parties for lawmakers and periodic poker games that included CIA officials as well as members of the House Appropriations and Intelligence committees. Cunningham, who sat on both committees, was a frequent guest, according to some of the participants in the poker games.

And I'll be darned: Kyle "Dusty" Foggo, now the executive director of the CIA, liked to come to those "parties." The same ones now-CIA Director Porter Goss may have attended:

People who were present at the games said one of the regular players was Kyle Dustin "Dusty" Foggo, who has been Wilkes' best friend since the two attended junior high school in Chula Vista in the late 1960s. In October, Foggo was named the CIA's executive director -- the agency's third-highest position.

In fact, Foggo didn't just attend, he occasionally hosted the parties at his Virginia home, the paper reports.

The SDUT has a couple other "names" of participants: Former Rep. Charlie Wilson (D-TX) says he was there, although he never stuck around for the women, he says. Others tell the paper a CIA agent was present known as "Nine Fingers" because, yes, he only had nine fingers.

Who else? More lawmakers? As Young Sherlock Holmes might say: The game is afoot.

2:05 PM  
Blogger Management said...

It turns out one of the Watergate poker parties I had heard was covered in the 90s by the Post was actually reported by an Atlanta Journal Constitution journalist and pal of Charlie Wilson's back in 1994. Here is "A Fun Bunch of Guys When the (poker) Chips Are Down, Depend on Your CIA to Be There," by Joe Murray, Atlanta Journal Constitution, May 20, 1994:

WASHINGTON - The CIA plays for high stakes. Some of the pots are close to $ 1,000.

For these agents, international intrigue isn't the only game in town. Once a week, in a suite at the Watergate Hotel, they play poker. I'm not sure how they chose the Watergate. Perhaps because of a sense of history. Either that or a sense of humor.

Playing cards, these fellows are a bunch of cards. Funny? You wouldn't believe it. I'm telling you, they'll kill you.

I stopped by the game with my old friend, Charlie Wilson, the Texas congressman from my home town. Charlie is a CIA kind of guy. He rode with the rebels in Afghanistan's revolt against the Soviets. A year ago, he received the CIA's "Honored Colleague" medal, first time ever that it went to anyone outside the agency.

A book written by "60 Minutes" producer George Crile is soon to be published about Charlie's exploits. A movie deal is also in the works. Harrison Ford supposedly is interested. Maybe there'll be a role for me. Is Smiley Burnett still around?

Meanwhile, I was getting to know his CIA pals. I was meeting Charlie in the lobby of the Watergate. He said to be sure to wait for him.

"Don't go up to the desk and ask where the CIA poker game is," he warned. "Then they'd have to take care of you."

I asked, exactly, what he meant by take care of me.

"Oh, nothing elaborate. Probably they'd just dress you in a chef's uniform and say you were some Hungarian cook who suffered a heart attack."

Charlie laughed loudly. I laughed weakly.

It turned out they were a great bunch of fellows. For one thing, they smoke cigars. Never mind that the suite is on a no-smoking floor. We hit it off right away.

Charlie brought gifts as well, a sack full of pistols that included a Soviet automatic used by Russian paratroopers. "Note that it's bored for a silencer," Charlie said. They nodded approvingly.

Everybody was given pens, the kind that are definitely mightier than the sword. Instead of ink cartridges, these carry .32 cartridges. Pop the end and you pop the enemy.

All of a sudden everybody in the room started snapping their pens. I started to duck.

"How's it work?"

"Oh, this is great!"

"Boy, I wish I'd had it this afternoon."

"If only Aldrich Ames were here."

Funny? You wouldn't believe it.

Charlie and I didn't stay long. But I had the opportunity to ask them about world hot spots. I'd been a few places where they go. Tbilisi, in the former Soviet republic of Georgia, for instance.

One of the agents looks Russian and, on occasion, is Russian. I asked him if Georgia's ousted leader, Zviad Gamsakhurdia, was really dead. Supposedly he committed suicide. "Gamsakhurdia is really dead," he said.

As I was leaving, they offered me one of their cigars, a Dominican. I offered them one of mine, a Cuban.

"Geez! Take our whole box," I was told.

The agent added, "You know, of course, this is considered contraband. But you've done the right thing as a good citizen. You've turned it in to the proper government agency. Be assured that very shortly it will be destroyed by fire."

Interesting. Now we know a bit more: the Watergate suite was presumably paid for by Wilkes. The poker parties were happening every week, for years. At least among congressmen Charlie Wilson was a regular. And some folks from the CIA. Interesting.

Also heard tonight there was a third hotel between the Wilkes-era at the Watergate and the Wilkes-epoch at the Westin Grand: a time period in the late 1990s when he rented space at the Capital Hilton.

It's funny, from the moment Cunningham pled guilty in November, I remember thinking about the particular Congressional subcommittees he was on and how it made me think of Charlie Wilson's position on the defense appropriations subcommittee and how much secret power he had from that perch. Here's what I wrote at the time back in November:

If you've read Charlie Wilson's War, you might remember how powerful was the subcommittee that both Wilson and until today, Randy "Duke" Cunningham, sat on, the House Appropriations committee subcommittee on defense. As I remember from the book, that subcommittee was aggressively courted not just by defense contractors, but by lobbyists for foreign governments interested in swinging US defense spending in certain directions. It is really where the checks are signed, and decisions about funding sometimes wholly undebated aspects of US national security policy are made. What I'm wondering is, is the Cunningham story one of just simple corruption, or is there more to it? Was he bought just to help steer contracts to MZM, or was there other stuff going on? Stuff that had policy implications?

The pattern is interesting, and not only for what it says about Cunningham: it speaks also about the ends of the people who cultivated him. Was the Wilkes/Wade operation wholly just about making a lot of money, or something else? Why does Wilkes seem from so early on to be so connected to elements of the CIA? There's his long friendship with Foggo, including when Wilkes accompanied Foggo to Central America (Honduras, el Salvador, Panama) when Foggo was reportedly a CIA money man funding the contras during Iran Contra; and Wilkes would bring down mostly right-wing congressmen from Washington for a front-row view of the action. There are hints that at least Wilkes considered himself a kind of de facto CIA adjunct or associate, a friend of the Cold War era Agency, particularly in Central America. Perhaps it was useful too for the CIA to have friends in Wilkes' position, in private companies, who, as the San Diego Trib wrote, knew how to grease the wheels. And useful to all of them were a few key congressmen, needed to authorize the funding to pay for it.

2:05 PM  

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