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Rep. Cunningham Pleads Guilty to Bribery, Resigns

Times Staff Writer

A tearful, trembling Rep. Randy “Duke” Cunningham (R-Rancho Santa Fe) resigned Monday after pleading guilty to receiving $2.4 million in bribes from military contractors and evading more than $1 million in taxes.

The money involved makes Cunningham’s the largest bribery case since several members of Congress were convicted of the crime in the early 1980s.

The downfall of Cunningham, an eight-term congressman and decorated Navy fighter pilot from the Vietnam War, began with revelations about the sale of his house in Del Mar Heights to a military contractor at an inflated price two years ago.

But in a plea agreement, Cunningham admitted a pattern of bribery going back to 2000, with contractors supplying him with Persian carpets, silver candelabras, a Rolls-Royce, antique furniture, travel and hotel expenses, use of a yacht and a lavish graduation party for his daughter.

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In return, Cunningham used his high-ranking position in Congress -- he served on the House Defense Appropriations Subcommittee and the House Intelligence Committee -- to “influence the appropriations of funds and the execution of government contracts.”

“I broke the law, concealed my conduct and disgraced my high office,” Cunningham, 63, said outside the federal courthouse. “I know I will forfeit my freedom, my reputation [and] my high office.” Cunningham left without answering questions.

Cunningham, who represented an affluent suburban district, faces a possible sentence of up to 10 years in prison and a $350,000 fine when he returns Feb. 27 to the courtroom of U.S. District Judge Larry A. Burns.

Cunningham has also agreed to forfeit his current home in Rancho Santa Fe -- which he purchased in part with illicit funds -- more than $1.8 million in cash, and a dozen pricey antiques, pieces of furniture and Persian-style rugs.

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Gov. Arnold Schwarzenegger has roughly two weeks in which to decide on a date for a special election to fill the remainder of Cunningham’s term. But his guilty plea could have an effect on other races. Republicans are trying to maintain their grip on the House and Senate in next year’s elections, and Democratic strategists believe that Republican ethics woes are a powerful political weapon they can use.

In addition to Cunningham’s case, those woes include the indictment of House Majority Leader Tom DeLay (R-Texas) and the investigation into lobbyist Jack Abramoff, who lavishly entertained lawmakers -- many of them powerful Republicans on key committees -- in his skyboxes and with trips to overseas resorts between 2000 and 2004.

Democratic leaders were quick to argue that Cunningham’s crime is part of a pattern.

“This offense is just the latest example of the culture of corruption that pervades the Republican-controlled Congress, which ignores the needs of the American people to serve wealthy special interests and their cronies,” said House Minority Leader Nancy Pelosi (D-San Francisco).

Conservative activist Paul Weyrich, head of the Free Congress Foundation, said he thinks the Democratic charge may stick. “Frankly, Republicans are held to a higher standard, mainly because they are the ones who always preach morality,” Weyrich said. “I think voters are going to punish them over this.”

Keith Ashdown, of Taxpayers for Common Sense, a watchdog group, said Cunningham’s guilty plea hurts both parties.

“There are very few things that I read that kick me in the gut. This is beyond my wildest guess of how bad it actually is -- how bad, how long and how nobody knew about it,” said Ashdown. “I don’t think Democrats or Republicans win on this. It basically makes people detest Congress even more and deters voter turnout.”

According to documents filed in federal court, Cunningham began receiving bribes in 2000 as his seniority gave him political power to influence the awarding of military contracts.

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The agreement refers to four co-conspirators who lavished money and gifts on Cunningham.

Although the indictment does not name the co-conspirators, the San Diego Union-Tribune revealed in June that Cunningham had sold his home in Del Mar Heights for $1,675,000 in November 2003 to Mitchell Wade, founder of Washington-based MZM Inc., a defense firm specializing in classified projects. An effort was made by the contractor to hide his identity as the buyer.

Cunningham and his wife, Nancy, a local school official, then bought an 8,000-square-foot home in nearby Rancho Santa Fe for $2.5 million.

Seven months later, without ever living in the home, Wade sold the home in Del Mar Heights for $975,000, a $700,000 loss. Federal grand juries in Washington and San Diego are investigating Wade, who has resigned from MZM.

In late August, federal prosecutors took the unusual step of filing a civil lawsuit to seize the Cunninghams’ home in Rancho Santa Fe, much as prosecutors seize property purchased by drug dealers and other criminals.

The civil case said that Cunningham “demanded and received” an inflated price for the Del Mar Heights home from Wade so that he and his wife could “move up” to Rancho Santa Fe.

MZM has received more than $163 million in federal contracts over the last decade -- mostly for the gathering and analysis of intelligence. Whenever Cunningham was in Washington, Wade allowed him to live aboard his 42-foot yacht -- called the Duke Stir -- and lavished other gifts on him, the indictment alleges.

Cunningham also allegedly received favors from Brent Wilkes, an associate of Wade’s who headed a military contracting company called ADCS Inc.

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Federal prosecutors said the investigation was continuing, with more indictments possible. Under his agreement, Cunningham promised to help in that investigation.

“The sad aspect of this plea is that it demonstrates how a public official betrayed the public’s trust and sold his office,” said Assistant U.S. Atty. Phillip L.B. Halpern.

The conviction represents a victory for U.S. Atty. Carol Lam, a Bush administration appointee whose office this year also prosecuted the “Strippergate” case involving three San Diego City Council members.

Cunningham “did the worst thing an elected official can do: He enriched himself through his position,” said Lam.

Until Cunningham’s plea, no criminal charges had been filed against him publicly. It is not unusual for high-profile federal charges to remain secret until a plea bargain is reached.

Cunningham’s chief of staff, Harmony Allen, issued a statement that staff members “are praying for Duke in these exceedingly difficult times.”

In announcing in July that he would not seek reelection, Cunningham said he was innocent of wrongdoing and would fight any charges. After his guilty plea, he read a statement saying he had misled his family and his staff about the bribes.

“I learned in Vietnam that the true measure of a man is how he responds to adversity,” Cunningham said. “I cannot undo what I have done, but I can atone.”

Rep. Darrell Issa (R-Vista), who represents a neighboring district, said that Cunningham’s admission confirmed the worst fears of his friends and supporters.

“We wanted desperately to hear Duke explain his conduct in a way that made sense to us,” Issa said, “but increasingly feared that would not happen.”

Times staff writer Mary Curtius in Washington contributed to this report.

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(BEGIN TEXT OF INFOBOX)

Randy ‘Duke’ Cunningham

Age: 63

Birthplace: Los Angeles

Family: Married, three children

Education: University of Missouri, master’s in education

Career highlights: As a fighter pilot during the Vietnam War, was awarded the Navy Cross for bravery. After the war, he trained pilots in the famed “Top Gun” program at Miramar Naval Air Station. Elected to Congress in 1990.

Congressional posts: Represented the 50th Congressional District in San Diego County. Member of the House Appropriations Committee and the Select Committee on Intelligence. Also chairman of the Subcommittee on Human Intelligence, Analysis and Counterintelligence.

Source: Congressional website of Rep. Randy “Duke” Cunningham

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(BEGIN TEXT OF INFOBOX)

Bribes in many forms

Randy “Duke” Cunningham admitted to receiving bribes paid through a variety of means, including:

* The purchase of his Del Mar Heights home for an inflated price of $1.6 million.

* The payoff of the mortgage on his Rancho Santa Fe home.

* The $200,000 down payment for his condominium in Arlington, Va.

* A Rolls-Royce and the use of a yacht.

* Checks totaling more than $1 million.

* Antiques, other furnishings.

* Yacht club fees, boat repairs.

* Moving costs.

What he will forfeit:

More than $1.8 million in cash, his interest in his Rancho Santa Fe home and more than a dozen antiques, pieces of furniture and rugs.

Sources: Times wire services, Times research

*

(BEGIN TEXT OF INFOBOX)

Other congressional cases

Among the congressmen who lost their seats following criminal investigations in the last 25 years:

1980

Rep. Michael Myers (D-Pa.) was expelled from the House and served about 20 months in prison as a result of the Abscam bribery sting investigation, in which FBI agents posed as Arab businessmen. Sen. Harrison Williams (D-N.J.) was convicted and resigned as the Senate considered an expulsion motion.

1984

Rep. George Hansen (R-Idaho) was the first to be convicted under the Ethics in Government Act. He underreported loans and income. He was defeated for reelection after being reprimanded by the House. He served five months in prison and was fined $40,000.

1987

Rep. Mario Biaggi (D-N.Y.) was convicted of accepting illegal gratuities, among other charges, triggering a House ethics investigation. In the meantime, he was convicted in a separate case of racketeering, conspiracy, extortion and bribery involving a defense contractor. He resigned the next day and was sentenced to eight years in prison.

1994

Rep. Dan Rostenkowski (D-Ill.), a former Ways and Means chairman, resigned after being indicted for fraud, witness tampering and embezzlement. He lost reelection and later served 15 months in prison. He was pardoned by President Clinton in 2000.

1995

Rep. Walter R. Tucker III (D-Compton), resigned four days after being convicted of extortion and tax evasion in a trash-hauling corruption case while he was mayor of Compton.

1996

Rep. Jay C. Kim (R-Diamond Bar) pleaded guilty to three misdemeanor campaign finance violations, including accepting illegal contributions from South Korean companies. He lost his next primary.

2002

Rep. James Traficant (D-Ohio) was expelled from the House after being convicted of bribery, obstruction of justice, racketeering and tax evasion. He was sentenced to eight years.

Sources: Roll Call, Times research


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