Cunningham Won’t Seek Reelection

Rep. Randy “Duke” Cunningham, an eight-term congressman whose $1.675-million home sale to a military contractor is under federal investigation, said Thursday that he would not seek reelection next year.

The San Diego Republican has been embroiled in a controversy over his dealings with contractor Mitchell Wade. Wade, described by the congressman as a close friend, is founder of MZM Inc., a company that has received $163 million in federal contracts, much of it for classified intelligence projects.

“I do not believe that a political campaign in the midst of such an investigation is in the best interest of my family or my constituents,” said Cunningham, 63, a former fighter pilot who has looked worn and physically weaker in recent weeks. “I learned in Vietnam no one person is more important than the mission, and I do not intend to forget that lesson now.”

The announcement of Cunningham’s pending retirement from Congress was met with regret by Republicans, who call him an honorable man, and criticism from Democrats and watchdog groups that have called for his immediate resignation.

Federal prosecutors began looking into private business dealings between the congressman and Wade after it was reported last month that Wade bought the Cunninghams’ longtime Del Mar Heights home in November 2003, only to resell it seven months later at a $700,000 loss in one of the hottest real estate markets ever in Southern California.

Cunningham’s reputation suffered a further blow when it was revealed that he had been living aboard Wade’s 42-foot yacht, the Duke-Stir in Washington -- paying fees and maintenance but no rent.

Smiling, with his voice at times cracking with emotion, the congressman made the announcement surrounded by his wife and longtime supporters in front of the library at Cal State San Marcos.

Cunningham told those gathered that he came to his decision after his attorney warned him to expect the investigation to drag on for months.

Cunningham, known for an often buoyant personality, had a long and distinguished military career. He was awarded the Navy Cross, the branch’s second highest honor, for his service as a pilot in Vietnam, rising to national prominence on his reputation as a war hero who shot down five enemy planes.

He said Thursday that he and his wife, Nancy, planned to sell their new Rancho Santa Fe home and donate a portion of the proceeds to three San Diego charities -- a gesture he said he knew would “not convince the skeptics of our good faith ... or in any way end the government’s investigation of me.”

A federal grand jury investigation into his relationship with Wade, 43, is underway in San Diego. Two members and two employees of a Washington yacht club where Cunningham lived aboard the yacht have been subpoenaed. Federal agents this month raided Cunningham’s Rancho Santa Fe home as part of the probe.

U.S. Atty. Carol Lam declined to comment on whether Cunningham’s retirement announcement would change the investigation.

In his statement, Cunningham reiterated that he had done nothing wrong, even as he again acknowledged using poor judgment in making the sale “to a friend who does business with the government.”

“I again want to assure my constituents that I have acted honorably in the performance of my duties in Congress,” he said. “This truth will be evident in time. I have cooperated with the government’s investigation and I am confident that I will be vindicated.”

Cunningham said he believed “that the sale of our Del Mar home was at a reasonable price, and that the proceeds from that sale are rightfully ours.”

“I should have given more thought to how such a transaction might look to those who don’t know me,” he said. “I have spent an entire life building a reputation of integrity and honesty. It pains me beyond words that I have jeopardized your trust.”

Cunningham departed immediately after his comments, taking no questions.

Details of the sale of Cunningham’s house in the Del Mar Heights neighborhood of San Diego were first reported last month. Wade bought the home, which was never listed, in late 2003 and sold it seven months later at the $700,000 loss.

The revelation led critics to question whether the initial purchase price had been inflated because Wade hoped to gain favor with Cunningham.

Cunningham sits on the Defense Appropriations subcommittee, one of the most influential when it comes to awarding government contracts, even though Congress rarely votes on such decisions.

After selling their Del Mar Heights home, which they had bought in 1988 for $435,000, the Cunninghams bought a $2.55-million home in Rancho Santa Fe. The 7,600-plus-square-foot residence, in an exclusive community of multimillionaires’ houses, has a pool, 7 1/2 bathrooms and a five-car garage. The Cunninghams have three grown children.

“Nancy and I have worked hard all our lives to save enough money to purchase a nice home where we could live out our later years,” Cunningham said. “We love the people of Rancho Santa Fe, and they have been gracious to us during these tumultuous months.”

Just days after the home sale to Wade made headlines, news that Cunningham had been living on Wade’s yacht also came to light.

After first saying he rented the boat, Cunningham said he had paid about $13,000 in berthing fees and maintenance costs in lieu of rent, raising more questions about his relationship with the head of a company pursuing lucrative government contracts.

Cunningham was first elected to Congress in 1990, beating a Democratic incumbent, Jim Bates, who was in the midst of a sexual harassment scandal. In 1992, Cunningham ran in a newly carved out and heavily Republican district in coastal northern San Diego County, where he never faced a serious challenge.

With no political campaign ahead of him, Cunningham must still wait for the outcome of the grand jury investigation.

Although federal bribery law holds that prosecutors must show a public official bestowed favors for money, a judge in San Diego recently instructed jurors in a federal case against two San Diego councilmen that they could convict based on circumstantial evidence that a “meeting of the minds” had occurred between the official and his benefactor for such a favor. Jury deliberations are underway in that case.

On Thursday, National Republican Congressional Committee Chairman Tom Reynolds (R-N.Y.) said in a statement: “Today, Duke Cunningham did for his party what he has always done for his country: He put the interests of others above his own ambitions. Our conference will miss him.”

Supporters on hand to hear his announcement lamented his decision.

“I’m obviously very saddened,” said retired Rep. Ron Packard, a Republican who represented northern San Diego County for two decades.

“I’ve never known Duke to be anything but honorable. He will be missed in Congress. Duke is a fighter. I’m a little bit surprised he chose not to run, but he’s going out as a winner.”

Democrats are hoping that Cunningham’s departure will boost their efforts to spotlight ethics as a national issue in the 2006 elections, when they hope take control of the House from the Republicans.

Bill Burton, a spokesman for the Democratic Campaign Congressional Committee, issued a statement saying:

“What led to Congressman Cunningham’s announcement today is exactly why the American people hold Congress in such low esteem.... Americans find this Congress is more focused on their own interests rather than the interests of the American people.”

After his announcement, numerous critics, including the Democratic Congressional Campaign Committee, said it was not enough.

“I think he should resign,” said Francine Busby, a Democrat who unsuccessfully challenged Cunningham last year and is running again for the seat. “People of this district deserve effective representation right now.”

Keith Ashdown, vice president of policy for the watchdog group Taxpayers for Common Sense, said Cunningham would have been “political toast if he sought reelection.”

Lou Aspell, a longtime Cunningham supporter, attended Thursday’s news conference and grew misty-eyed as the congressman made his announcement. “He’s done a lot for the district and our country,” Aspell said. “I think people have forgotten what an American hero he is.”

Times staff writer Richard Simon contributed to this report.