Rep.’s Sale of House Probed

The FBI is investigating Rep. Randy “Duke” Cunningham’s 2003 sale of his Del Mar Heights home to a defense contractor who later sold it at a $700,000 loss, a source close to the investigation said Friday.

The probe, according to the source, has been ongoing “for quite some time” and may involve other law enforcement agencies.

Cunningham, a San Diego Republican, has come under increasing criticism by Democrats over the house sale, as well as for his current living arrangements. He lives aboard a yacht that is owned by the same defense-firm executive who purchased the house. Free, unreported rent would be a violation of ethics laws for members of Congress.

Cunningham offered a brief statement through his press office Friday.

“I have no further comment on this speculative information,” it read. “I am working on a comprehensive statement that will address issues that have been raised recently.”

The investigation reportedly stems from a decision by Cunningham and his wife, Nancy, to sell their four-bedroom, 3,826-square-foot home to Mitchell Wade, president and chief executive of Washington-based MZM Inc., in November 2003 for $1,675,000.

Wade sold the home seven months later for $975,000 -- a $700,000 loss.

Democrats have suggested that the sale was “an illegal gift” and charge that Cunningham may have been rewarded for helping Wade’s firm win lucrative government contracts.

They say Wade’s sale of the house for a net loss is particularly suspicious because the home was in an upscale market where sellers usually profit.

Cunningham, a member of the House Intelligence Committee and the Defense Appropriations Subcommittee, has praised the work of MZM, which does classified intelligence work. It received more than $40 million in defense contracts in 2003.

Cunningham has denied the accusation, and House Republican leaders say the allegations are politically motivated.

Cunningham also promised this week to produce financial records to prove that he has done nothing inappropriate by living aboard a yacht owned by Wade.

The 42-foot boat is docked at a yacht club on the Potomac River at a slip rented by Cunningham. His own boat is being repaired.