Duke’s Home Boy

Would you hand $40 million to one of the few people who was able to lose money -- big money -- in the recent Southern California real estate market?

You did. MZM Inc. received that much in U.S. defense contracts in 2003, the same year that the company’s president and chief executive bought a house in the San Diego area for $1,675,000. The seller was Rep. Randy “Duke” Cunningham (R-San Diego), a member of the House Appropriations subcommittee on defense who has supported MZM’s bid for contracts.

MZM chief Mitchell Wade put the house on the market within a month and sold it for $975,000, a $700,000 loss in a housing market that bubbles up by the month.

Democrats contend that Wade paid an inflated price for the house to gain Cunningham’s favor. He reportedly bought it sight unseen, using neighborhood comparisons in the Del Mar Heights area.

Questions about the deal abound. Why did a Washington-based businessman want a house in San Diego when he apparently doesn’t go there often enough to even look at the house first? If he wanted it, why did he put it on the market right away? Why did he sell it at such a low price? Is Wade simply inept with money?

Also unclear is why Cunningham is living on Wade’s yacht docked on the Potomac River and whether he is paying market-rate rent, as he claims. Even if he is, this smacks of the kind of coziness that makes taxpayers shudder.

The FBI is reportedly investigating the house sale. Good thing, because there is no longer a functional House Ethics Committee to look into such matters. Republicans, vexed by reprimands of House Majority Leader Tom DeLay (R-Texas), gutted the committee’s membership and weakened its rules.

Whatever the probe of the home sale finds, a question remains, this one for the Appropriations subcommittee: If, under the most propitious market conditions, Wade can turn $1.68 million into $975,000, what could he do with $40 million in defense contracts?