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Wash.D.C.   Former Rep. Randy "Duke" Cunningham's admission that he accepted bribes from defense contractors has renewed scrutiny of the growing power that lawmakers have to steer business to favored companies and causes. Though Republicans took control of Congress in 1995 vowing to rein in such "earmarking", the practice has grown significantly during the past decade.

"It's like night and day, the difference between then and now," said Sacramento-area GOP Rep. Dan Lungren, former state attorney general who returned to Congress this year after more than a decade away. "I'd walk down the hall and there would be streams of people in front of every office, representing every community and every public entity and every other special interest in that district; and they were all coming in for earmarks," he said. "We sure didn't have that when I was here before." Earmarks are typically small provisions that members of Congress insert into a bill to fund programs that often benefit their districts or supporters. Critics of the process now point to the Cunningham case as an inevitable outgrowth of that change. "When you have a dramatic expansion of the ability of individual members to direct federal funds or to designate contracts, you are creating the most fertile environment for corruption imaginable," said American Enterprise Institute Congress expert Norman Ornstein. "If these guys named in the charge could figure out that they could go from trace elements of a company to hundreds of millions of dollars in a short period of time by making a $2.4 million investment in Randy Cunningham, you've got to believe there are others out there who have figured the same thing out," he said. Though prosecutors have not detailed how Cunningham, a Rancho Santa Fe Republican, aided the firms, lawmakers are able to influence spending in many ways. Committee and subcommittee chairs, eager to expand their turf, often urge rank-and-file members to request earmarks for local projects. They also pressure federal agencies to buy certain goods and services. The problem is compounded when secrecy is involved, experts say. Congress approves billions of dollars in secret intelligence and defense spending each year. The companies that Cunningham has admitted aiding, Washington-based MZM Inc. and Poway-based ADCS Inc., in return for cash and gifts did defense and intelligence work. "As a member of the House Intelligence Committee, he would have been privy to the most sensitive information about intelligence contracting and he would have been in a position to improperly assist his benefactors," said Federation of American Scientists' Project on Govt Secrecy heads Steven Aftergood. "He would be in a position to tip off bidders for impending contracts. He might also be able to tailor or to influence the development of a program in such a way as to make it conform to what a particular vendor has to offer." The process could have worked the same with Cunningham's other key assignment on the defense appropriations subcommittee. Both panels have launched reviews of Cunningham's committee work. "Ninety-nine percent of what goes on is setting things up," said govt contracting expert Dan Guttman who teaches at Johns Hopkins University. "You wire things not by telling the person making the selection, 'Pick this company,' but by telling the person, 'These are the criteria.' " A House Appropriations Committee staff member agreed. "Everyone knows who got the money and everyone knows who it's for," said the staffer, who asked not to be named for fear of angering his bosses. Budget experts note that, if not for the bribery, many of the favors Cunningham did for the two companies could have been considered part of business as usual on Capitol Hill. Cunningham publicly acknowledged helping MZM and ADCS land govt work before he was charged with any crimes. Lawmakers are eager to take credit for helping hometown businesses grow or securing money for projects. Most consider it a part of what they were sent here to do, represent their districts and states. Rep. Virgil Goode, R-VA, House Appropriations Committee member instrumental in getting funding in 2003 for a defense program in his district run by MZM, said at the time that it would "add a new dimension to the economy" there. Goode has not been accused of wrongdoing. An analysis by the Democratic staff of the House Appropriations Committee contends that earmarking of defense spending has more than tripled since fiscal year 1995. (Overall, defense spending has increased dramatically since the 2001 terrorist attacks and the beginning of the Iraq war.) A GOP spokesman for the House Appropriations Committee did not return a call for comment. Ornstein and other critics argue that the practice of earmarking has become little more than a way to boost lawmakers' re-election prospects, reward contributors and, for some, secure lucrative employment later with the businesses or lobbying firms they help. It also allows party leaders to maintain discipline and pass controversial bills that are loaded with money for local projects. "It has exploded since Republicans took control," said Rep. Jeff Flake, R-AZ. "It's shameless. … It's really out of control." "Members are getting hooked on earmarks quickly. They are led to believe that that is the way you get re-elected. The leadership pretends that they're going to get earmarks under control. But they love them because once they get the members hooked, they can lead them around by the nose," Flake said. Poway firm contributed to Cunningham 6.25.05   D.Washburn, D.Calbreath, B.V. Bigelow SD UT A list of top local corporate contributors to Rep. Randy "Duke" Cunningham in the past decade includes well-known names such as Titan Corp. and Science Applications Intl Corp. Also high on Cunningham's list of contributors is ADCS Inc., a private company in Poway that has received millions of dollars' worth of military contracts in the same period and has ties to Mitchell Wade, the defense contractor embroiled in the controversy surrounding the 2003 purchase of Cunningham's Del Mar-area home. ADCS officials and its political action committee have contributed at least $30,000 to Cunningham's campaigns since 1996, according to federal campaign finance records. Federal Election Commission records show that ADCS founder Brent R. Wilkes has contributed $6,000 to Cunningham's campaigns and has attended Cunningham's fundraisers. Another ADCS official, Joel G. Combs, gave at least $5,000 to Cunningham from July 1997 to August 2002. The records also connect Wade to ADCS through a $5,000 contribution to the company's political action committee, the ADCS PAC, in Sept. 2000. In 1997, ADCS, which specializes in converting paper records into computer records, sold $5 million in document conversion software to the Pentagon, according to Govt Computer News. The deal grew out of a 1996 request from the House National Security Committee, of which Cunningham was then a member, for the military to add an automated-document program to its budget. "The committee is disappointed that no funds were requested for this purpose," read the committee's report on the defense budget, dated May 7, 1996. "Accordingly, the committee recommends $38.8 million for (automated documentation)." It is not clear from the committee report whether Cunningham had a role in adding the project to the military budget. But ADCS' competitors complained at the time that Cunningham was using his position to steer business to the company. At the time, Cunningham said he did promote ADCS, but also told the Pentagon to go with a different company if it found one that could do the job better. He told a reporter then that anyone who dared paint his actions as anything but aboveboard "can go to hell," adding, "I'm on the side of angels here." Don Lundell, a former executive with Audre, one of ADCS' competitors, told The San Diego Union-Tribune at the time that he "scratched his head over" why the Pentagon picked ADCS over Audre, which produced software that beat ADCS' in several Pentagon tests. "The only answer I can come up to is that there . . . may have been some political pressures," he said. "I know that Mr. Wilkes has been very active in campaign financing activities" for Cunningham. Wilkes told the Union-Tribune that his firm prevailed because its product was cheaper, easier and faster than Audre's. Cunningham's attorney, Lee Blalack of Washington, D.C., refused to comment yesterday on the 8 term Republican's relationship with ADCS and Wilkes. Several calls to Wilkes and other ADCS officials over the past two days have not been returned. Wade, founder of MZM Inc., a Washington, D.C., defense contractor, could not be reached yesterday, and MZM officials reached yesterday afternoon declined to comment. Cunningham retained Blalack after the Union-Tribune disclosed the sale of his Del Mar-area home to his longtime friend Wade. Wade bought the house from Cunningham for $1,675,000 in November 2003. Wade quickly put it back on the market and sold it in October 2004 for $700,000 less than he had paid Cunningham. Meanwhile, Cunningham bought a house in Rancho Santa Fe for $2.55 million. As a member of the House defense appropriations subcommittee, Cunningham acknowledged that he has backed MZM in its bid to win tens of millions of dollars in federal contracts. Like MZM, ADCS is a privately held company and not required to file financial disclosure statements that describe the company's business operations. The company was incorporated in 1995, and calls itself the "unchallenged leader" in data capture and indexing, data conversion, and information management. The company has landed several defense contracts, according to a search of records compiled by FSI, a Virginia market research firm that maintains an online database of federal contracting information. ADCS' most-substantial contract, with the Defense Information Systems Agency, amounted to more than $23 million in 2000, according to FSI. The company also had $550,000 in contracts that year from the Army and nearly $2 million from the Navy. In fiscal 2003, FSI showed ADCS had $930,000 in contracts from the Defense Dept. Wilkes also runs a lobbying firm, Group W Advisors. The firm says on its Web site that it has been "instrumental in introducing (digital document) technology to the Defense Dept." The Group W site notes that the company's document-automation work began as a small "congressionally mandated pilot project" that has since generated more than $500 million in appropriations. Besides lobbying, Group W also provides campaign consulting for political candidates, stressing the importance of fundraising in political activities. "Increased campaign fundraising demands and time constraints make (Group W's) range of professional political services especially appealing," the Web site says. Agents raid second firm with ties to Cunningham   Data sought on ADCS' govt contracts 8.17.05   D.Calbreath, O.R. Soto, K.Thornton, B.Lee, D.Davidson SD UT Federal agents seized documents yesterday from the Poway headquarters of a defense contractor with close ties to Rep. Randy "Duke" Cunningham and raided the home of the company's president. Agents from the FBI, IRS & Defense Dept were seeking documents and computer records pertaining to govt contracts secured by ADCS Inc., said sources familiar with the investigation. In particular, the agents were looking for documents relating to contracts that involved the House Appropriations subcommittee on which Cunningham sits, the sources said. Company President Brent Wilkes and other ADCS officials, who have refused to speak to the media for the past 2 months, could not be reached for comment. A recording on the company's switchboard said the office was closed for the day. Wilkes was vacationing in Hawaii as federal agents raided his Poway home. He did not respond to a call to the Royal Hawaiian Hotel in Honolulu. The raid comes seven weeks after a similar raid on MZM Inc., a company founded by Mitchell Wade, who formerly worked for ADCS in the Washington, D.C., area. Controversy surrounding Wade's purchase of Cunningham's Del Mar home for a price far above market value, at a time when MZM depended on congressional support for its multimillion-dollar defense contracts, led Cunningham to announce last month that he would not seek re-election. Federal agents entered the ADCS headquarters before 7:30 a.m. yesterday and barred the company's 50 or so employees from entering, said one source familiar with the company. The agents told employees that they were especially interested in the company's accounting and purchasing records, the source said. The sources spoke on condition of anonymity. Reporters who went to the building later in the day also were turned away. Federal agents patrolling the grounds displayed their guns and asked onlookers to stay back. Through the large windows of the steel-and-glass building, dark-suited agents could be seen carrying large file boxes. Late in the afternoon, federal agents were still carrying empty cartons into the building. Like MZM, ADCS won millions of dollars of govt contracts while making significant donations to Cunningham, a Rancho Santa Fe Republican, and other members of the Subcommittee on Defense. The subcommittee repeatedly penciled in funding for projects involving the company, even though the Pentagon had not requested the money. Since 1997, Wilkes and other ADCS insiders contributed more than $600,000 to political campaigns, mostly targeting members of the Appropriations and Armed Services committees. Cunningham and his American Prosperity political action committee received $53,500 of those donations. As reported Aug. 5 in The San Diego Union-Tribune, Cunningham also repeatedly used ADCS' corporate jet on campaign-related trips, including a hunting trip in Idaho and a golf tournament in Hawaii. House Majority Leader Tom DeLay also flew on the jet. The Inspector General's Office of the Defense Dept has been investigating ADCS' military contracts for at least two weeks. Yesterday's raid included agents of the Defense Criminal Investigative Service. Federal investigators have been looking at Cunningham and local defense contractors since June, when the Union-Tribune  reported that Wade bought Cunningham's Del Mar-area home and then sold it several months later for $975,000, taking a $700,000 loss. In recent days, federal authorities subpoenaed documents from Wade as part of a San Diego grand jury investigation into Cunningham's ties to defense contractors, sources close to the investigation have said. Wade has not been subpoenaed to testify before the grand jury, said his lawyer Charles La Bella. La Bella and John Kirby, another attorney representing Wade, said they would comply with the subpoena but declined to say what documents the govt requested. On 7.1.05, federal agents raided Wade's offices in Washington, D.C., and Cunningham's house as well as a yacht named the Duke-Stir, which was owned by Wade but was used as a residence by Cunningham during his stays in Washington. Prosecutors often subpoena records in addition to conducting searches to ensure that they receive everything they're seeking. Cunningham, who serves on the House panel that oversees Pentagon spending, has said he helped promote MZM's business the same way he has helped other defense contractors, but has denied wrongdoing. Grand jury subpoenas also have gone out to members of Cunningham's Washington staff, sources close to the investigation said. But announcements of who has been summoned to San Diego are unlikely until after Labor Day. Members of Congress and their staffs are required to announce grand jury subpoenas on the House floor. The House is on its summer recess, and members are not scheduled to return to Washington until 9.6.05 said Cunningham spokesman Mark Olson. "Obviously the house is not in session, so there is no way to read it on the House floor," he said yesterday. Olson declined to confirm the subpoenas. "I can't acknowledge anything involving the subpoenas to any of the staff members, including myself," he said. ADCS, or Automated Document Conversion Systems, specializes in scanning documents so they can easily be indexed and cross-referenced. Its biggest project has been archiving 1.2 million architectural documents from the Panama Canal in 1999. From 1994 to 2001, the House Appropriations Committee repeatedly added funding for ADCS to the Pentagon budget, even though the Pentagon did not ask for the money. Occasionally, the committee criticized the Pentagon for not asking for the funding. From the moment ADCS' work for the Pentagon began, critics charged that Cunningham had unfairly helped the company. When a reporter from Copley News Service asked Cunningham about it in 1997, he told her that anyone who questioned his support for the company could "go to hell." Embattled MZM sold to investment group 8.18.05   Dean Calbreath SD UT MZM Inc., a defense contractor embroiled in the recent controversy surrounding Rep. Randy "Duke" Cunningham, was sold yesterday to a private equity firm with ties to high-ranking officials who served in the Clinton and Bush administrations. Veritas Capital, an investment firm focused on companies with federal govt contracts, signed an agreement to buy all of MZM's existing contracts and take over its work force of roughly 420 employees for an undisclosed sum. Under the terms of the sale, which is expected to be completed in mid-September, most of MZM's operations will be taken over by Veritas and molded into a newly created subsidiary, Athena Innovative Solutions Inc. Under the plan, Veritas will not assume most of MZM's liabilities. Washington, D.C. based MZM, whose activities include security counterintelligence, has been under federal scrutiny in recent weeks, especially after The San Diego Union-Tribune reported that its founder, Mitchell Wade, bought Cunningham's Del Mar-area house at a cost above market value and then sold it a few months later at a $700,000 loss. It was later revealed that Wade allowed the Rancho Santa Fe Republican to live aboard his yacht, the Duke-Stir, while in Washington, D.C. At the time, MZM depended on Cunningham's assistance to win contracts from the federal govt. Federal agents raided MZM headquarters as well as Cunningham's residence in June. Making matters worse, the Defense Dept in late June cut off one of MZM's most lucrative contracts, a $250 million "blanket purchase agreement" that allowed the company to sell services to the govt under a streamlined process. Pentagon officials said at the time that there was no relation between the cutoff and the relationship between Wade and Cunningham. Veritas founder Robert McKeon appeared undaunted by MZM's recent troubles. He said he intends to increase the company's military work under its new Athena Innovative Solutions name. "Our goal is to build on this exceptional talent base to continue to grow the company through new program wins as well as acquisitions," he said in a statement. New York-based Veritas, which was founded in 1992, has close ties to the govt and military. Its advisory council includes Richard Armitage, a former deputy secretary of state in the Bush administration; Gen. Barry McCaffrey, who headed the Clinton administration's war on drugs; and Gen. Anthony Zinni, who headed U.S. military operations in the Middle East in the Clinton administration. James C. King, a former three-star general who became president of MZM after Wade stepped down in late June, has been picked to head Athena. In a statement, he said that he expects Veritas' advisory board members to "provide us a unique strategic perspective as we grow the company." Veritas officials said that Athena's employees, 85 percent of whom have federal security clearances, will continue to provide a broad array of national security services, including campaign planning, language translation, investigative support, counterterrorism activities, law enforcement, security and information technology. Claim filed on Cunningham house U.S. lawsuit seeks forfeiture of property 8.18.05   Dani Dodge SD UT The U.S. Attorney's Office has filed a secret lawsuit against Rep. Randy "Duke" Cunningham that contends he should forfeit his Rancho Santa Fe home to the govt because it was purchased with illegally obtained money. Notice of the lawsuit and the govt's interest in the property was filed with the San Diego County Recorder's Office. Cunningham's attorney, Lee Blalack, declined to comment yesterday on the lawsuit but said he had filed a motion challenging the U.S. govt's legal claim on the house. The home, a 5 bedroom, 8 bath Spanish colonial estate on Via Del Charro, was listed for sale yesterday for $3.5 million. However, the U.S. attorney's declaration that it has a claim on the property makes a sale difficult if not impossible for the time being, local real estate agents said. The notice filed with the county is called a lis pendens, which is simply a legal notification that a suit has been filed that has an interest in the property in question. It lets prospective buyers know someone else has first claim. Although there is no public record of the lawsuit at the U.S. District Court in San Diego, the county's record shows that the U.S. Attorney's Office filed the notice 7.21.05. That was less than a week after the Rancho Santa Fe Republican announced publicly he would not seek re-election and would sell the house, giving a portion of the profit to charity. "Please take notice," the document reads, "that a civil lawsuit is now pending in the United States District Court … which involves title to (Cunningham's house)." The notice goes on to say: "The general object of the lawsuit is to forfeit to the United States the defendant property in that said property constitutes or is derived from proceeds traceable to a violation of Title 18 United States Code, Section 201. … " Title 18, Section 201 pertains to bribery, graft and conflicts of interest. Cunningham's troubles started with another home sale in 2003. He sold his Del Mar-area home to defense contractor Mitchell Wade for $1.675 million. Wade, who put it back on the market shortly after he bought it, sold it at a $700,000 loss. Cunningham also lived on Wade's yacht, the Duke-Stir, while in Washington, D.C. Wade's company, MZM Inc., a Washington, D.C. based company that was sold yesterday for an undisclosed sum, has received $163 million in defense contracts since 2002. Cunningham used the money from the home sale to buy the Rancho Santa Fe home for $2.55 million in late 2003. He purchased it from Douglas Powanda, a former executive with Peregrine Systems awaiting trial on fraud charges for his alleged role in an accounting fraud conspiracy at the business software development company. The home had been on the market about 7 months. A San Diego federal grand jury is now investigating the congressman's house deal with Wade. FBI agents with warrants broke into the Rancho Santa Fe house July 1 searching for documents. On the same day, they searched Wade's yacht and office in Washington. On Tuesday, federal agents raided the Poway headquarters of another defense contractor with close ties to the congressman. Agents from the FBI, Internal Revenue Service and Defense Department were seeking records pertaining to govt contracts secured by ADCS Inc., particularly deals related to the House Appropriations subcommittee on which Cunningham sits, according sources familiar with the investigation. Federal agents also raided the Poway home of the ADCS president, Brent Wilkes, who was vacationing in Hawaii. Wade and Wilkes contributed heavily to Cunningham, who backed their companies' efforts to gain govt contracts. Cunningham, an eight-term congressman, represents the heavily Republican 50th District, including North County communities Carlsbad, Encinitas, San Marcos, Del Mar and Escondido, along with large portions of San Diego. In the papers that Blalack filed Aug. 12 contesting the U.S. Attorney's July 21 action, he asks for the notice to be expunged or the lawsuit to be unsealed. He notes that the U.S. Attorney's Office has sought to freeze Cunningham's principal asset without giving him a chance to argue his case. He adds that Cunningham's wife Nancy would also be deprived of selling the home even though there have been no allegations she participated in any illegal actions. The couple wants to sell their property and buy something less expensive in light of Cunningham's pending retirement, the papers said. The home is listed with Sterling Real Estate Co. agent Gerry Kirkeby. She did not return calls to comment yesterday. David Bright, an Escondido lawyer whose practice emphasizes real estate law and who teaches real estate principles to brokers, said it will be "extremely difficult" to sell the property with the pending civil litigation. "Any purchaser would be subject to the claim of the govt," Bright said. "The purchaser's acquisition of the property could be potentially overridden by the govt's claim. Who is going to want to purchase under those conditions?" Blalack said he hopes to get the notice lifted right away. Even without the pending litigation, specialists in North County high-end real estate estimated the house could be on the market for up to a year. Ken Crosby, a real estate agent who specializes in luxury estates, said buyers will be scared off after they learn of the pending forfeiture when they do a title search. But if Cunningham gets the notice cleared off, the property is reasonably priced and should attract buyers, he said. Kevin Burke, a real estate agent who teaches real estate at University of California San Diego, said that while high-end properties don't sell as quickly as lower-priced houses, they sell consistently. "The agents in The Ranch are used to getting a property and holding it onto it for a year," Burke said. "There are less people in that price range . . . and it will take someone coming in and saying, 'I really love that place.' " If the notice is removed, he said, the attention the house is getting will probably help make a sale. "Duke Cunningham has served our country for a long, long time and his notoriety will bring attention to the property," Burke said, "and that's every Realtor's dream." Current vacancies Offices of the CA 50th cong. dist. remain open to serve and assist constituents 12.2.05   press release U.S. House of Representatives Wash.DC   The Washington, D.C. office and the district office of the Honorable [ sic ] Randy “Duke” Cunningham will continue to serve the people of the Fiftieth Congressional District of California under the supervision of the Clerk of the House of Representatives. Representative Cunningham resigned effective close of business December 1, 2005. Staff members of Representative Cunningham remain on the House payroll under the supervision of the Clerk of the House to receive and undertake constituent casework, to help in handling business with the departments of the executive branch of the government, to provide general status information on pending legislation and to offer other general constituent services provided by House offices. The Clerk of the House is Karen L. Haas. The Washington, D.C. office and the California district office are presently open on a daily basis to accommodate congressional business. Under House rules, the Clerk manages the offices when a Member dies, resigns, or is expelled. This authority, which does not include voting representation, continues until a successor is elected to fill the vacant seat. This is the fourth vacancy to occur during the 109th Congress. Eight vacancies occurred in the 108th Congress due to resignation or death. The Washington office is located in 2350 Rayburn House Office Building, telephone (202) 225-5452. Mail addressed to the Office of the Fiftieth Congressional District of California, Washington, D.C. 20515, will be delivered through the internal House mail distribution system. The district office is located at 613 W. Valley Parkway, Suite 320, Escondido, CA 92025, (760) 737-8438 . Requests for further details should be directed to the Office of the Clerk (202) 225-7000. Cunningham questioned over commercial use of congressional seal 7.1.05   Marcus Stern, Jerry Kammer SD UT Wash.D.C.   Rep. Randy "Duke" Cunningham, already in legal and political hot water over his dealings with a defense contractor, might have run afoul of the law by using a likeness of the congressional seal for commercial purposes. Cunningham, a highly decorated Navy pilot in Vietnam and former instructor at the Navy's Top Gun academy, has operated a commercial Web site for years that sells memorabilia, including a $595 "Randy 'Duke' Cunningham Fighter Ace Kalinga Style Buck Knife." The blade of the 10-inch knife is emblazoned with three emblems etched in gold, according to the Web site, including the "Official Seal of the United States Congress." A chorus of still-unanswered questions has been raised in Washington this week about the legality of the Rancho Santa Fe Republican's use of the congressional seal for commercial purposes. Cunningham and his attorney have refused to comment on the matter, but, after four days of questions from Copley News Service, the Web site's commercial operations were shut down yesterday afternoon with a message stating that a new Web site is under construction. Under federal law, any member of Congress can be fined and imprisoned for up to six months if he or she "knowingly uses, manufactures, reproduces, sells, purchases for resale . . . any likeness of the seal of the United States Congress" without the approval of the clerk of the House. When asked if the clerk had approved Cunningham's use of the seal, his office referred calls to his attorney, Lee Blalack, who declined to comment. Numerous calls to the clerk's office this week either went unanswered or were referred to the House ethics committee. Calls to the ethics committee also went unanswered or resulted in no comment. However, a source close to Cunningham said that the likeness of the seal on the knife wasn't, as advertised, the "Official Seal of the United States Congress." Instead, the source said, it was an unofficial seal not subject to the criminal statute barring commercial use. The source declined to be identified because of the ongoing FBI and federal grand jury investigations into Cunningham's dealings with defense contractor Mitchell Wade, founder of MZM Inc. Wade purchased Cunningham's Del Mar-area house in November 2003 and later sold it at a $700,000 loss. At the same time, MZM was growing its federal contracting business and Cunningham, who sits on the defense appropriations subcommittee, was supporting MZM's efforts to get tens of millions of dollars in contracts. Questions have also been raised about Wade's purchase of a yacht that he has allowed Cunningham to live aboard while in Washington. The Library of Congress, in a written statement that it keeps on file, confirmed yesterday that there is no current official seal of Congress. Instead, the House and Senate each have their own seals. The official House seal depicts the House side of the U.S. Capitol. But the House also has an "unofficial" seal created for members "to use on stationery and other office-related items." The unofficial seal depicts an eagle and stars in gold with a blue border and cream background, which is similar to the image emblazoned on the 1,000 collector knives Cunningham offered for sale. However, congressional ethics experts expressed doubts about the legality of Cunningham's use of the likeness, even if it was the unofficial seal of the House. "You can't use the seal for commercial purposes," said Jan Witold Baran, a Washington lawyer who specializes in ethics and has represented members of the Senate and House before their respective ethics committees. While the issue of the seal being used on a collector's knife hasn't arisen before, as far as Baran knows, he said questions have arisen in the past over use of the unofficial seal on stationery. "In the '80, some political party organizations used something that looked like the Great Seal (of the United States). The Justice Dt said, 'Stop it,' and they did," said Baran, who served as the general counsel to the Republican National Committee from 1989 to 1992 and worked on the 1988 presidential campaign of former President George H.W. Bush. The Great Seal of the United States, like the unofficial seal of the House, depicts an eagle. Although the law carries criminal penalties, including fines and prison time, Baran could recall no instance in which a case was prosecuted. "I don't know of anyone who has gone to jail for it," he said. "It is a statute that has been on the books a long time . . . I have never heard of the Department of Justice bringing a case against someone criminally under the statute." The Web page still features a picture of Cunningham, a fighter ace in Vietnam, striking a pose in his flight jacket with his helmet under one arm and a likeness of his fighter jet underneath. Cunningham has always listed Top Gun Enterprises on the annual financial disclosure form he is required to file as a member of Congress. During Cunningham's years in Congress, the company has always been valued on the form at up to $500,000. But the form Cunningham released recently for 2004 valued Top Gun Enterprises at up to $1 million. Cunningham's office referred questions on the company's increase in value to his attorney, who declined to comment.

Titan   new bookings explicit indictment list IRC Sourcewatch Stephen Cambone grand design Set America Free SCUD in a bucket Echelon rebuttal more 9.11.01 ties PBS FDD Benador Associates ISL Palladin Capital Ex-CIA dir.: U.S. faces 'World War IV' 4.3.03 & Charles Feldman & Stan Wilson CNN Los Angeles & Former CIA dir. James Woolsey said Wednesday the U.S. is engaged in World War IV, and that it could continue for years. In the address to a group of college students, Woolsey described the Cold War as the third world war and said "This fourth world war, I think, will last considerably longer than either World Wars I or II did for us. Hopefully not the full four-plus decades of the Cold War." Woolsey has been named in news reports as a possible candidate for a key position in the reconstruction of a postwar Iraq. He said the new war is actually against 3 enemies: the religious rulers of Iran, the "fascists" of Iraq and Syria, and Islamic extremists like al Qaeda. Woolsey told the audience of about 300, most UCLA students, that all 3 enemies have waged war against U.S. for several years but the United States has just "finally noticed." "As we move toward a new Middle East," Woolsey said, "over the years and, I think, over the decades to come ... we will make a lot of people very nervous." It will be America's backing of democratic movements throughout the Middle East that will bring about this sense of unease, he said. "Our response should be, 'good!'" Woolsey said. Singling out Egyptian President Hosni Mubarak and the leaders of Saudi Arabia, he said, "We want you nervous. We want you to realize now, for the fourth time in a hundred years, this country and its allies are on the march and that we are on the side of those whom you, the Mubaraks, the Saudi Royal family, most fear: We're on the side of your own people." Woolsey, who served as Clinton CIA dir., was taking part in a "teach-in" at UCLA, a series of such forums at universities across the nation. A group calling itself "Americans for Victory Over Terrorism" sponsors the teach-ins; UCLA GOP campus org Bruin Republicans co-sponsored Wednesday night's event. The group was founded by former Education Sec. Wm Bennett, who took part in Wednesday's event along with Paul Bremer, a U.S. ambassador during the Reagan administration and the former chairman of the National Commission on Terrorism. Titan gets extension on interpreters contract Small businesses will get bid chances later 7.20.05   David Washburn SD UT The Army has given Titan Corp. an 8 month extension on a $600 million-plus contract under which the San Diego company provides thousands of linguists for troops in Iraq. The extension, which is worth $380 million and runs through May 2006, was done so small businesses will have a chance to bid on portions of the contract when it goes out for re-bid, said Army spokeswoman Deborah Parker. "It allows us time for an orderly transformation of services," Parker said of the contract, which has grown dramatically since 1999 when it was first awarded to BTG, a small VA based co. that Titan bought in 2001. Titan employs more than 5,000 translators and interpreters in Iraq, Afghanistan and other parts of the Middle East under the contract. Before the extension, the contract had a ceiling of $657 million. It has become the company's biggest revenue producer, accounting for 15 percent of Titan's $559 million in first-quarter revenue, or nearly $84 million. Titan spokesman Wil Williams declined to comment, saying the company has not gotten official word on the extension from the Army. This is the second time in a year that the contract has been extended. The Army's Intelligence and Security Command was on the verge of awarding a contract renewal last July when it was hit with a formal protest that the solicitation process had unfairly excluded small businesses. So it scrapped its bidding process and eventually decided to break up Titan's single worldwide linguists contract into 3 smaller ones. The largest of the 3 requires more than 6,000 interpreters to serve in Iraq; the second calls for 525 interpreters to work in Afghanistan, Guantanamo Bay, Cuba, and elsewhere; and the third contract requires 300 mostly Arabic speakers to participate in military training exercises in U.S.. Small businesses will be eligible to bid on the 2 smaller contracts, Parker said. On June 3, New York-based L-3 said it would buy Titan for $1.97 billion. Titan shareholders will vote on the sale on July 28. Shares of Titan rose 1 cent to $22.99 yesterday. L-3 to buy Titan for about $2 billion in cash   ¹ 6.3.05 &nbwsp; Dan Burns, Christian Plumb Reuters NYC   L-3 Communications Holdings Inc. Friday said it would buy San Diego-based Titan Corp. for about $2 billion in cash, expanding its reach in defense-intelligence services. The deal is the latest by acquisition-hungry L-3, which has grown into one of the U.S.'s leading defense technology companies with dozens of deals since its formation in 1997. L-3, which makes secure communications systems, chiefly for the U.S. military, hopes the deal will capitalize on the Pentagon's increased emphasis on networks and information technology rather than traditional military hardware. "Titan's defense technology, intelligence and communications programs complement and expand L-3's presence in these markets," said Merrill Lynch analyst Byron Callan, in a research note. "L-3 intends to continue growth by acquisition and there could be another $1 billion or more in deals in 2005." The deal follows Britain's BAE Systems Plc's (BA.L) $4 billion purchase of United Defense Industries Inc. (UDI.N) in March, as the defense industry continues consolidating in the face of slowing growth in U.S. military spending. As a condition of the deal, Titan agreed to settle shareholder suits in California & \Delaware relating to a foreign bribery probe. In March, Titan pleaded guilty to making illegal payments to officials in Benin, paying $28.5 million to the federal govt to settle the matter. Titan's failure to settle that investigation led to defense giant Lockheed Martin Corp. scrapping its $20-a-share offer to buy Titan in June last year. Titan, which provides translators & interrogators used by the U.S. Army in Iraq, has also come into the spotlight for work at Iraq's Abu Ghraib prison ¹ ² ³, which became notorious for abuse of prisoners. L-3 is also subject of a U.S. federal investigation after one of its units supplied defective parts for emergency radios to locate downed military pilots. Under the terms of the deal, Titan shareholders will receive $23.10 per share in cash, a modest 1.4 percent premium to the stock's closing price of $22.79 on Thursday on the New York Stock Exchange. The stock had run up in recent weeks in anticipation of a transaction. L-3 will also take on Titan debt, making the deal worth about $2.65 billion overall. The deal is scheduled to close in the second half of 2005. Titan shares fell 36 cents, or 1.6 percent, to $22.43 in early trade on the NYSE. L-3 shares rose $1.43, or 2 percent, to $72.45. L-3 said it expected the takeover to add about $2.7 billion in sales and 25 cents to earnings per share in 2006. New York-based L-3 said it planned to finance the deal with a combination of cash, borrowings under its existing credit facility, and the sale of new bonds. It has won commitments for $2 billion in interim financing pending the bond sale. Titan also postponed its annual shareholder meeting, which had been scheduled for next Tuesday, pending shareholder consideration of the deal with L-3. Business space making a move Region headed for best office-leasing year since the tech bubble burst in 2001   7.31.05   Mike Freeman SD UT In the past few months, Intel, Pfizer, Capital One, Sony and chip seller Memec have said they are vacating at least some of the office buildings they occupy in San Diego County. Will this hurt the region's office landlords, who rely on companies creating jobs to fill their buildings? So far, the answer is no. According to several recent reports on San Diego's office market, the region is poised to have its best year for office leasing since the technology bubble burst in 2001. Vacancy rates are falling and rents have edged upward, brokers say. Landlord incentives such as a few months of free rent, a common carrot for prospective tenants in recent years, have all but disappeared. Moreover, construction of office buildings is on the rise, reaching its highest level in 5 years. Major projects include more than 830,000 sq ft in2 new towers that cellular giant Qualcomm is building in Sorrento Mesa, 2 high-rise office towers downtown and a couple of speculative office buildings in Carmel Valley. It seems like a contradiction, high profile companies discarding office space amid a recovery in the local office market. But according to experts, the discrepancy highlights how San Diego's current economy is not firing on all cylinders. Landlords rely on job growth to fill their buildings. In some industries, such as defense, enough jobs are being added to justify new construction and higher rents. But in other industries, such as electronics, job growth has been spotty at best. "Biotechnology has not been robust as of late, but defense has been going gangbusters," said Brett Gossett, a broker with CB Richard Ellis. "Telecom is back. Tech is still a little bit on its ear. But you do have some companies, such as Intuit, that are growing. So it seems like when one industry shuts off, another one picks up." Defense companies have the big appetite for space right now, brokers say. Northrup Grumman recently moved into 175,000 sq ft of new buildings in Kearny Mesa. Several other defense companies are in the market looking for space, say brokers. On top of that Qualcomm is not only building its two towers in Sorrento Mesa, it's also seeking to lease more than 200,000 square feet of additional buildings, brokers say. "I think we're seeing some pent up demand because of a lack of construction in the past few years," said Rick Reeder, a broker with Grubb & Ellis/BRE Commercial. "Most people realize there's been a strong return to business growth, so they're finally letting go and doing some expansion." Reeder added that new housing developments, particularly in North County and South County, have spurred demand for office space. "All the service industries, the banks, stock brokers, insurance, are seeing more business because of the residential growth," he said. During the first half of the year, the county posted 940,000 square feet of "net absorption," a real estate term which calculates the difference between total new space leased versus the amount abandoned. "If the current pace of activity continues, net absorption should reach 2 million square feet by year end," said Mark Wayne of Burnham Real Estate Services. "This will be the most net absorption recorded since the all-time high of 4.6 million square feet set in 2000." This demand has resulted in an increase in construction. Brokers say between 2.6 million and 3.5 million square ft of new office buildings will be under way by year end – more than double the amount built two years ago. Some of these projects are speculative, meaning they're being built without commitments from tenants to lease the entire structure. Among the new projects are the 264,000-square-foot DiamondView Tower and 372,000 sq ft Broadway 655 buildings downtown, the 153,000 sq ft Rio Vista Plaza buildings in Mission Valley and the 160,000 sq ft High Bluff Ridge at Del Mar projects in Carmel Valley. With most of these buildings, a percentage of the space is already leased. For these developers, one risk is that companies now shedding space will end up competing with them for tenants, offering to sublease their buildings, usually at low rental rates. There are several companies in the process of downsizing. Intel is moving 200 to 300 jobs from San Diego to Portland and consolidating its local operations from two buildings, plus some leased space, into one building that it owns. Pfizer has said it will abandon 2 buildings totaling 235,000 sq ft in its nine building campus in Torrey Pines Mesa. In addition, the drug company will move out of three leased buildings totaling 175,000 sq ft. Memec, a semiconductor distributor, was purchased by rival Avnet of Phoenix and is shutting down its San Diego HQ. It's trying to sublease a 113,000 sq ft building in Carmel Valley. Newgen Results, a software company, laid off 235 call center workers this month, leaving much of its 100,000 sq ft building in Sorrento Mesa unoccupied. Capital One Auto Finance said that it is moving its Internet lending office with 290 employees to Plano TX as part of an effort to streamline operations. Sony Electronics moved out of a 93,000 sq ft leased building overlooking Interstate 15 in Rancho Bernardo. The company relocated to buildings it owns a few miles away. No jobs were lost. Even with this downsizing, many real estate experts say the additional space isn't enough to seriously derail the rebound in the local office market. "I think genuine growth is still here," said Colliers Intl sr vp Brian Driscoll. "This consolidation is occurring because the market is demanding efficiency. It's so competitive out there. I think it will continue. But it's not an Achilles heel issue" for the local office demand. Others brokers aren't so optimistic. They say demand from defense contractors and Qualcomm have painted a picture of a red-hot office market. Strip out these companies and demand doesn't run very deep. "There are 3 or 4 tenants that have created a lot of the absorption," said Irving Hughes broker David Marino specializing in representing tenants. "But for the most part in San Diego it's a big shell game, tenants moving from one building to another." While some of these companies are moving to larger buildings, Marino said most are not expanding. New companies starting up here are often small, cost conscious firms that can't afford to pay hefty rents. "There is marginal new business creation in San Diego, but there is nobody moving to San Diego because the cost of living is among the highest in the country," he said. Marino said high costs, particularly for housing, make it harder for companies to recruit employees and expensive for them to retain back-office operations. Capital One, for example, was looking to add 80,000 sq ft in San Diego 6 months ago, Marino said, until it decided it could do business cheaper in Texas. "What you're seeing is a lot of important but lower-wage jobs, such as the call centers, leave," Marino said. He thinks these high costs have contributed to making San Diego's economic future less certain, which makes demand for offices less certain. "We're not out of the woods," he said. "At best we've hit equilibrium." Cushman & Wakefield Alliance broker Eric Northbrook said he's optimistic about office demand overall. "The fundamentals are very strong," he said. "Unemployment is low. There's job growth. And last time I checked, nobody is making any more land." But Northbrook added that, other than defense contractors and Qualcomm, the current upturn in the market is not as widespread as he would like to see it, especially for well-financed, so called "credit" companies. "Activity is good. But the benefit to one landlord is a detriment to another," he said. "So it continues to be musical chairs. I'd feel a little better if we started to some other credit tenants." Contractor 'knew how to grease the wheels' ADCS founder spent years cultivating political contacts 12.4.05   D.Calbreath, J.Kammer Copley News Service In govt documents, he is referred to as "co-conspirator No. 1": a man who gave more than $630,000 in cash and favors to former Rep. Randy "Duke" Cunningham for help in landing millions of dollars in federal contracts. Poway military contractor Brent Wilkes, whom Justice Dept officials identify as the co-conspirator, has long been active in local political circles, serving as the San Diego County finance co-chairman of Gov. Arnold Schwarzenegger's campaign and the state finance co-chairman for President Bush. Wilkes has not been charged with a crime in the Cunningham case. The former Rancho Santa Fe congressman announced his resignation Monday after pleading guilty to charges of tax evasion and conspiracy. Three other men, Washington defense contractor Mitchell Wade, businessman Thomas Kontogiannis and financier John T. Michael, both of New York, also have been identified as co-conspirators. Wilkes' story shows how gifts, favors and campaign contributions can be used to gain lucrative business from the govt. Over the past 20 years, Wilkes has devoted much of his career to developing political contacts in Washington. He and his associates have spent at least $600,000 on political contributions and $1.1 million on lobbying beyond the gifts mentioned in the Cunningham plea agreement, as they cultivated such politicians as House Majority Leader Tom DeLay and Appropriations Committee Chairman Jerry Lewis. Since 1996, he has received at least $95 million in govt contracts for the small family of firms based in his $11 million headquarters in Poway, including ADCS Inc. and Group W. Those who know Wilkes describe him as gregarious and ambitious, a person who can make friends easily and toss them aside just as quickly. Born in San Diego County in 1954, Wilkes graduated from Hilltop High School in 1972, along with his football teammate and best friend Kyle Dustin "Dusty" Foggo, currently third-in-command at the Central Intelligence Agency. Wilkes and Foggo were roommates at San Diego State University, were best men at each other's weddings and named their sons after each other. Wilkes' career in political relations dates to the early 1980s, shortly after Foggo joined the CIA. Foggo was sent to Honduras to work with the Contra rebels who were trying to topple the Sandinista govt of Nicaragua, according to sources within the CIA. Wilkes had moved to Washington, D.C., and opened a business named World Finance Corp. about 3 blocks away from the White House. One of his chief activities, sources say, was to accompany congressmen, including then-Rep. Bill Lowery of San Diego, whom Wilkes met during his participation in the SDSU Young Republicans organization, to Central America to meet with Foggo and Contra leaders. A number of sources who have had business dealings with Wilkes say he hinted at that time and afterward that he was affiliated with the CIA. CIA sources say he was never employed by the agency. By the time Wilkes returned to San Diego in the late 1980s, he had established relationships with members of the House Armed Services, Intelligence and Appropriations committees. Neither Wilkes, Foggo nor Lowery responded to requests for comment. By 1990, Wilkes was working for Aimco Financial Management in La Jolla. His chief duty was to bring in politicians, including Lowery, to talk to Aimco clients about how new laws might affect their finances. Aimco ran into trouble after securities regulators accused its founder, Marvin I. Friedman, of taking $268,000 of a client's funds in 1991. Wilkes left Aimco in 1992 to take a job as a political consultant for Audre Inc., a Rancho Bernardo firm that specialized in automated document conversion systems, which converted maps and engineering drawings into a format that could be edited via computer. Audre, which was nearly bankrupt at the time, was eager to get more federal contracts. Shortly after Wilkes' arrival, the 35-person firm, headed by San Diego businessman Tom Casey, began donating thousands of dollars to key members of Congress. "Wilkes was a political operator," said former Audre engineer Dirk Holland. "He was pretty slick. He knew how to grease the wheels." Said a former business associate of Wilkes: "He knew that it pays to get a sponsor. He knew that's the way the game is played, and he convinced Tom Casey that that's what it's all about." Between 1992 and 1997, Audre employees and family members donated $77,000 to members of Congress. Rep. Duncan Hunter, R-El Cajon, who got $7,250, and Cunningham, who got $5,050, became prominent backers of automated document systems in Congress. "Our job as San Diego congressmen is to do our best to make sure our guys get a fair shot," Hunter said recently. "And Brent Wilkes and Tom Casey were aggressive and enthusiastic promoters of a breakthrough technology." Audre was able to increase its influence by teaming up with Evergreen Information Technologies, a Colorado company that specialized in computerizing federal contract information. Casey had been one of the founders of Evergreen in the early 1990s and served on its board of directors. Evergreen gave $22,000 in political donations, often targeting the same politicians on the same dates as Audre. According to charges filed by the Securities and Exchange Commission, $20,000 of Evergreen's donations were illegal. Evergreen Chief Executive Barry Nelsen asked staffers to write $1,000 checks, leaving the "payee" line blank, according to SEC documents. Nelsen then gave the checks to lawmakers and repaid his workers in violation of federal law, the SEC charged in 1993. Nelsen did not fight the charges and was fined $65,000. He says he made the donations, none of which went to Hunter or Cunningham, so Congress would push the Navy to work with his firm. "I went to Tom Casey and said, 'How do we get some money or political heat or something to make the Navy do what they should do?' " Nelsen said. "So up pops Brent Wilkes." Nelsen said Wilkes identified which politicians should be given donations. The lobbying by Audre, as well as that of other software companies, was effective. Congress created an automated document conversion program, which provided $190 million in contracts between 1993 and 2001. Audre won more than $12.5 million of those contracts, largely provided through earmarks that let legislators add pet projects to the budget. "An earmark is usually devoted to a particular company or particular project that is tied to a particular congressman," said govt watchdog group Common Cause ethics campaigns dir. Michael Surrusco. Earmarks are typically added to budget bills after they have been passed by the Senate and the House and the differing versions are being resolved in a conference committee. Because those meeting occur outside public view, the earmarks can be a way of avoiding scrutiny or accountability. The earmarks were included in the budget even though the Pentagon never asked for funds for automated document conversion. In 1994, the General Accounting Office, now known as the Govt Accountability Office, which monitors federal spending, found that the military did not need automated systems because it already had its own systems to digitize documents. That did not dissuade Audre's supporters in Congress "I operate under the idea that not all good ideas come out of the Pentagon," Hunter said. Two dozen firms vied for funding from the automated document conversion program. Their success depended on lobbying influential legislators, said Richard Gehling, who headed Audre's federal sales in the late 1990s. Once Congress has appropriated money for programs, Pentagon officials decide how to apportion the money among prequalified contractors. These officials are very mindful of the desires of members of Congress who were crucial in funding the program, contractors and program managers said. Gehling described Audre's technique for obtaining govt contracts during a deposition in a lawsuit he filed in 2000 to gain back pay from the company. A successful sale to the military, he maintained, "normally boiled down to who the House or Senate member was and how much pressure they put on the undersecretary (of Defense) about getting the funding for their constituents." Audre attorney Ian Kessler asked: "That, in turn, depends upon how much political muscle, how much influence (a company has) with a particular congressperson?" Gehling: "The majority of the time, it's (whichever company) has the most clout." Kessler: "You mean the most political clout?" Gehling: "Who's paid more." Kessler: "Paid more in terms of political contributions?" Gehling: "Fundraisers. Sponsoring." To build more political backing for Audre, Wilkes asked Casey in 1994 to budget at least $40,000 a month for lobbying, far beyond what the money-losing company had been spending, according to 2 sources at the company. When Casey balked, Wilkes quit the firm. 6 months later, Wilkes launched ADCS Inc., customizing a German system called VPMax to compete for contracts to convert govt documents. It was a family affair. Most of the company's top executives were related to Wilkes or his wife, Regina. The Pentagon rated VPMax as faster, easier and cheaper than Audre. VPMax cost $6,035 per unit, compared with $11,479 for Audre's PC system and $29,950 for its Unix system. Even so, Hunter backed Audre, partly because it was a U.S.-made product. "I did oppose having a German firm get the business," he said recently, although the German creator of VPMax was getting little more than licensing fees for the ADCS project. Casey played on that sentiment. When talking to Hunter about ADCS, Casey called it "the German software." Hunter, in turn, asked Maj. Gen. John Phillips, the Pentagon's chief purchasing officer, to "whenever possible, use [document conversion] products that are made in the United States by American taxpayers." In May 1995, just as Wilkes was launching ADCS, Hunter, who had just been named chairman of the Armed Services Committee, let Audre use his office for two weeks to demonstrate its newest release to Pentagon officials. 2 weeks after the demonstrations ended, Audre sold $1.2 million of the software to the military for testing. "When you're in a position like Hunter was, you have a lot of clout, and we're not supposed to rock the boat," said a former Pentagon procurement official who declined to be named. At that point, Wilkes started donating money to Cunningham, who sat on a House Appropriations subcommittee overseeing the Pentagon budget. Since October 1995, he and his associates have given $71,500 to Cunningham's campaign and political action committee. Cunningham became an ADCS booster. "The success achieved by ADCS Inc. is an asset to the San Diego business and technological communities," Cunningham said in a 1997 endorsement that was printed in ADCS' pamphlets and press releases. He predicted VPMax would lead to "a stronger, more efficient national defense." In 1996, Casey pressed Hunter to find out why the military was not buying more of Audre's software. Hunter demanded a Pentagon investigation. A report from the Pentagon's Inspector General responded that "little demand exists" for automated document conversion systems. Aside from a Navy base in Ventura County, Port Hueneme, no military installation said it needed the systems. Much of the software Congress had funded was languishing in storage. Such criticism did not dissuade Hunter. According to Gehling's deposition, Hunter pushed the military to buy $2.5 million in Audre software in February 1997. "There were still problems with the software," Gehling said. "It's always been flaky. It's still flaky." Under pressure from Cunningham, the Pentagon shifted the money from Audre to ADCS. At the time, Cunningham said he only wanted the military to pick the best contractor possible. Donald Lundell, who was then Audre's chief executive, accused Cunningham of being swayed by Wilkes' campaign contributions. At the time, Cunningham rejected any criticism of his actions. "I'm on the side of the angels here," he said then, adding that anyone who questioned his role "can just go to hell." By then, the document conversion program was drawing fire from Arizona Republican Sen. John McCain, who included it on a list of $5.5 billion "objectionable" earmarks that Congress had tacked onto the military budget. In July 1997, McCain accused the Senate Armed Services Committee and the House National Security Committee, where both Hunter and Cunningham sat, of "virtually ignoring the request of the Pentagon and impeding the military's ability to channel resources where they are most needed." McCain said that "with military training exercises continuing to be cut, backlogs in aircraft and ship maintenance, flying hour shortfalls, military health care underfunded by $600 million, and 11,787 service members reportedly on food stamps," Congress should not be funding "a plethora of programs not requested by the Defense Dept." McCain was largely ignored. 3 months later, Congress earmarked $20 million for document conversion systems. The earmarks hit $25 million the next year, including ADCS' biggest project: a $9.7 million contract to digitize documents in the Panama Canal Zone, which was to be handed to Panama in 1999. The idea for the project came about at a time that Hunter and Cunningham were both warning that the People's Republic of China might try to take over Panama once U.S. forces left. The project was based on the idea that the U.S. should have blueprints of public buildings in Panama in case of a Chinese takeover. Wilkes began lobbying for the project in early 1998, targeting Rep. Robert Livingston of Louisiana, who chaired the Appropriations Committee, and Rep. Jerry Lewis of Redlands and Cunningham, who served on the subcommittee on defense. As the Appropriations Committee earmarked the budget, Wilkes, his wife Regina, Wilkes' nephew and lobbyist Joel Combs, attorney Richard Bliss and Rollie Kimbrough, a Democrat who headed a Washington, D.C., company that partnered with ADCS on the project, contributed a total of $28,000 to the 3 GOP lawmakers. The project passed without the Pentagon's support, since most of the documents in Panama had little military value. Many of the documents that were of military value already were being photocopied, faxed or scanned into computers. But Wilkes got a contract to convert millions of documents into computer-readable format, including reams of papers that dated to the administration of President Theodore Roosevelt. By Wilkes' own description, ADCS was using its most expensive technology to scan engineering drawings from the 1870s and images of boats from the 1910s. Asst undersecretary of defense Louis Kratz tried to block funding for the project, arguing there were more pressing needs at the Army's Missile Command, the Air Force's Logistics Center and an Air Force Pacific Base project. Kratz was rebuffed by Cunningham as well as Hunter, who wanted the Pentagon to give Audre a $3.9 million contract to perform document conversion on an Abrams tank project. Kratz later told The Washington Post  that he had never encountered such "arrogance" and "meddling" as he had from Cunningham and Wilkes. John Karpovich, who helped run the document conversion program at the Defense Dept before his retirement, said Wilkes infuriated Pentagon staff by claiming that the document conversion money belonged to him. "Brent came in and said, 'That's our money,' " Karpovich recalled. "He said, 'The congressmen put the money in there for us.' " Kratz eventually freed the funds, delaying the Air Force and Missile Command projects. But he also asked the Inspector General to investigate how the projects got funding. In June 2000, the Pentagon Inspector General reported that several important projects had lost funding because "2 congressmen" pressured defense officials to shift the money to the Panama and Abrams tank projects. The shift in funding was causing some military officers to "lose confidence in the fairness of the selection process," the Inspector General reported. The money from Panama and other ADCS contracts, ranging from Gateway computer systems to military sound technology, helped fund a heady lifestyle for Wilkes and his associates. In 1999, Wilkes and his wife bought a $1.5 million home in the Poway hills. He soon bought a second home: a $283,500 town house in the Virginia suburbs near Washington, D.C. During his visits to Washington, he made his rounds in a chauffeur-driven Mercedes. At the Capital Grille, a favored hangout of legislators and lobbyists, he rented a personalized wine locker with his best friend Foggo. Wilkes spread his taxpayer-provided funds throughout his company, taking executives on periodic retreats to Hawaii and Idaho. In Honolulu, Wilkes stayed at suites at the Royal Hawaiian Hotel or rented the beachfront mansion of the late hairstyling mogul Paul Mitchell, which typically goes for $50,000 a week. In Idaho, Wilkes' team stayed at the posh Coeur d'Alene Resort, where Wilkes paid $2,500 a night for a 2,500 sf penthouse suite, featuring an indoor swimming pool and outdoor Jacuzzi, said former employees and sources in Idaho. For dinner, Wilkes would take his team to Beverley's restaurant, where a group meal could easily cost several thousand dollars. For recreation, they would fish, Jet Ski or play at the resort's exclusive golf course, famed for its 14th hole on a man-made floating island in Lake Coeur d'Alene. There were retreats to Hawaii and Idaho at least once a year, said one source inside the company, with visits to Idaho typically occurring in spring or summer and visits to Hawaii in fall or winter. Wilkes made no bones about where his money was coming from. His jet-black Hummer bore a license plate reading MIPR ME, a reference to Military Interdepartmental Purchase Requests which authorize funds in the Pentagon. Wilkes shared the benefits of his largesse with the politicians who helped him. He took Cunningham on several out-of-state trips on his corporate jet. Cunningham has produced no records showing that he paid for food, lodging or transportation while traveling to resorts with Wilkes, although he does have receipts for several campaign trips on Wilkes' jet. Wilkes also bought a small powerboat that he moored behind Cunningham's yacht, the Kelly C, at the Capital Yacht Club in Washington, D.C. The boat was available for Cunningham's use anytime Wilkes was not using it. But what landed Wilkes in trouble with federal prosecutors was his gifts to Cunningham. According to Cunningham's plea agreement, "Co-conspirator No. 1," gave $525,000 to Cunningham on 5.13.04, to pay off the second mortgage on Cunningham's home in Rancho Santa Fe. Co-conspirator No. 1 also gave $100,000 to Cunningham on 5.1.00, which went into Cunningham's personal accounts in San Diego and Washington, D.C. He also paid $11,116.50 to help pay Cunningham's mortgage on the Kelly C. The plea agreement charged that in return for the payments, Cunningham "used his public office and took other official action to influence U.S. Defense Dept personnel to award and execute govt contracts." Wilkes befriended other legislators, too. He ran a hospitality suite, with several bedrooms, in Washington, first in the Watergate Hotel and then in the Westin Grand near Capitol Hill. He also kept his donations flowing, targeting people with clout over the Pentagon budget: $43,000 to Jerry Lewis, who now heads the Appropriations Committee; $35,500 to Hunter, who heads the Armed Services Committee; and $30,000 to Tom DeLay, who flew on Wilkes' jet several times and has been a frequent golfing buddy. Over the past 3 years, Wilkes' lobbying group in Washington, Group W Advisors, also paid about $630,000 in lobbying fees to Alexander Strategy Group, a firm headed by DeLay's former chief of staff Ed Buckham and staffed with former DeLay employees. The firm has a well-publicized reputation in Washington as a conduit to DeLay's office. "The Alexander lobbyists' sales pitch was, 'Either you hire me or DeLay is going to screw you,' " an anonymous source identified as a top GOP lobbyist told the Congressional Quarterly weekly last month. "It was not really a soft sell." Besides donating money to DeLay's campaign, Wilkes also has given money to a political action committee that DeLay helped organize: Texans for a Republican Majority. The group is under investigation for allegedly breaking Texas law to divert corporate contributions into its drive to redraw the state's election districts. DeLay was indicted in late September over his activities with the group. One of the group's biggest contributors was PerfectWave Technologies, one of Wilkes' companies, which donated $15,000. House Speaker Dennis Hastert also flew on Wilkes' jet several times, sources say, although Hastert's expense records show no payments for such trips. Besides its military work, ADCS also vied for state and municipal contracts, both for document conversion services as well as mapping systems to help speed police, firefighters and emergency workers to crime sites or fires. As Wilkes vied for contracts, he donated to state and local politicians, such as San Diego County Supervisor Ron Roberts and Assemblyman George Plescia of Poway. The kickoff for Plescia's political campaign was held in ADCS' headquarters; Plescia was about to marry Wilkes' govt affairs manager Melissa Dollaghan. Other than Wilkes' donations to federal campaigns, his biggest contributions went to Gov. Arnold Schwarzenegger. Besides helping coordinate the Schwarzenegger campaign's finance activities in San Diego County during the 2003 recall election, Wilkes and his wife donated $42,400 to Schwarzenegger, the maximum allowable. The next year, Wilkes allowed Schwarzenegger to use ADCS' headquarters as a local office for his 2004 workers' compensation initiative campaign. Schwarzenegger appointed Wilkes as a board member of the Del Mar Race Track Board in 2004 and the State Race Track Leasing Commission this year. Despite the recent negative publicity, ADCS remains in operation. At the company's glass & steel HQ in Poway one day last week, about 20 cars were in the parking lot. None of the employees would comment, and company officials shooed a reporter and a photographer away from the property. The headquarters building was erected in 2003 at a cost of $11 million when the company was receiving a steady stream of govt contracts. According to the architectural firm that built it, the building boasts a 100-seat theater, a 2,000 sf kitchen, and 32,000 sf of office space, including a large sandbox lined with surfboards, which was designed to bring an element of fun into the workplace. Sources who have worked at or done business with ADCS say the company has shrunk in size from more than 135 employees at its heyday to about 45 or fewer today. The headquarters is largely empty, the sources say. Contractor spends big on key lawmakers 11.30.05   Matt Kelley & Jim Drinkard USA Today A San Diego businessman under investigation in the bribery case of former congressman Randy "Duke" Cunningham is a well-known GOP fundraiser whose generosity to key members of Congress came at the same time his company saw large increases in its govt contracts, public records show. Brent Wilkes, the founder of defense contractor ADCS Inc., gave more than $840,000 in contributions to 32 House members or candidates, campaign-finance records show. He flew Republican lawmakers on his private jet and hired lobbyists with close ties to those lawmakers. Wilkes' charitable foundation, which aids sick children and military families, honored congressmen at black-tie banquets and donated to their favorite causes. Wilkes was also a "Pioneer" for President Bush's 2004 re-election campaign, meaning he raised at least $100,000. With help from two committee chairmen, ADCS got more than $90 million in govt contracts since its founding in 1995, helping propel Wilkes from an obscure businessman to a millionaire prominent in GOP circles. Neither Wilkes nor any other congressmen have been charged with crimes, and the donations and contributions are legal so long as they weren't intended to influence official actions. The links illustrate the connections between lawmakers who oversee defense spending and a contractor seeking some of that money. Cunningham resigned Monday after pleading guilty to tax evasion and conspiracy to accept bribes. He admitted accepting $2.4 million in bribes from two defense contractors and two other businessmen in exchange for helping those companies get contracts. Wilkes, whose home & co. HQ were searched by federal agents this year during the Cunningham investigation, wasn't named in the plea documents. The documents say "co-conspirator No. 1" spent more than $636,000 on Cunningham. Wilkes' atty Michael Lipman acknowledged that his client is "co-conspirator No. 1." He declined to comment further about the case. Since 1994, Wilkes and ADCS gave $40,700 in campaign contributions to Rep. Duncan Hunter, San Diego GOP who chairs the House Armed Services Committee. Hunter has acknowledged that he joined with Cunningham in 1999 to contact Pentagon officials who reversed a decision and gave ADCS one of its first big contracts, for nearly $10 million. Hunter spokesman Joe Kasper said the congressman was unavailable for comment Tuesday. California GOP Appropriations Committee chair Jerry Lewis led panels that ordered the Pentagon to continue programs that aided ADCS when Pentagon officials wanted to cut them. Lewis got $71,253 from Wilkes and his employees in donations since 1993. Wilkes gave Lewis donations and met him at various events, Lewis spokesman Jim Specht said, but "he never talked with him about a defense project." Before becoming the Appropriations chairman this year, Lewis led the subcommittee that oversees defense spending. In the late 1990s, that panel directed the Pentagon to continue converting paper documents to computer records, the work that ADCS does. Pentagon officials had tried to end the program's funding. The 1999 defense budget, for example, directed $45 million be spent on document conversion. Wilkes and his employees gave Lewis $7,000 in campaign contributions the day after his subcommittee's first hearing on the bill. After the Pentagon declined to give ADCS a contract, it awarded the company a $9.8 million deal in mid-1999 after "inquiries from two members of Congress," a Defense investigation found. Hunter and Cunningham have said they asked Pentagon officials about the program. The money went to ADCS instead of projects for the Army's UH-60 Black Hawk helicopter, Air Force bases, and a parts center in Oklahoma, according to the report by the Pentagon inspector general, prompted by a request from a Defense official. Wilkes' ties to Hunter and Cunningham go beyond campaign contributions. In 2003, the businessman's foundation hosted a "Salute to Heroes" gala to give Hunter an award, just as it did for Cunningham a year earlier. The Wilkes Foundation gave $1,000 in 2003 to a charity run by two of Hunter's staffers, records show. Wilkes also provided a jet that Cunningham and other Republicans used for more than a dozen flights to campaign fundraising events since 2001, records show. Providing flights gives donors a chance for hours of one-on-one contact with the lawmaker they want to influence, said Taxpayers for Common Sense watchdog group's Keith Ashdown. "Most other lobbyists would give up their second lung to get that kind of access," Ashdown said. "It's not always illegal, but it's definitely a strategy of influence that's unparalleled." Over the past 8 years, the defense appropriations subcommittee has repeatedly added funding for ADCS-related projects to the Defense Dept budget, even criticizing the Pentagon for not requesting the money itself. Wilkes, who also runs Group W Advisors, a Washington, D.C.-based lobbying firm, declined to answer phone calls and e-mails seeking comment on the issue. Cunningham's ties to another defense contractor, Mitchell Wade, founder of MZM Inc., are currently the subject of investigations by a federal grand jury in San Diego, the FBI and the U.S. Attorney's Office in Washington. Wade also has ties to ADCS, listing himself as recently as 2000 as an ADCS employee on political donations, according to FEC records. The investigations were launched after articles in the Union-Tribune  raised questions about Cunningham's sale of his Del Mar-area home to Wade, who later sold it for a $700,000 loss. Cunningham also lived aboard Wade's yacht, called the Duke-Stir, while in Washington. MZM has received $163 million in federal contracts since 2002. Cunningham has said that as a member of the House defense appropriations subcommittee, he supported funding requests benefiting MZM. Since launching ADCS in the late 1990s, Wilkes has built relationships with key legislators on Capitol Hill. He and his close family members and business associates have donated more than $600,000 to congressional campaigns, mostly targeted at members of the Senate and House appropriations and armed services committees, which oversee the Pentagon budget. In addition, Wilkes has spent $440,000 on lobbying activities, according to the Center for Public Integrity, a Washington, D.C.-based nonprofit that monitors govt ethics issues. He also has repeatedly provided the use of his corporate jet to Cunningham and DeLay. Technically, Wilkes does not own the jet. Instead, he has a fractional ownership from Bombardier Flexjet, which sells time-share ownership of jets. Federal Aviation Administration records show that until March, Wilkes was one of 16 co-owners of a Lear 31A jet, whose registered owner was Jon Fossel, former chairman and chief executive of Oppenheimer Funds. Wilkes has since dropped his ownership in that jet and become one of 8 co-owners of a different jet. Fossel says he never met the co-owners of the jet, never heard of Group W and was surprised to learn that the jet had been used for congressional flights. "The way these things work is that you're all grouped together by Flexjet," he said. "Even though you officially own a specific plane, you don't necessarily travel on the plane you own. You call up Flexjet and tell them you need a charter, and they will send you whatever plane is closest to your location." Fossel said each owner of the plane was entitled to 50 hours per year of flight time, although Group W upgraded its ownership this spring to one-eighth of a jet, guaranteeing 100 hours per year. Filings with the FEC show that in 2001 and 2003, Group W used much of its flight time to transport politicians. During one weekend campaign swing in July 2003, DeLay used at least a quarter of Group W's 50-hour annual allotment on the jet. DeLay flew the Group W jet from Dulles Airport in Washington, D.C., to John Wayne Airport in Orange County to appear at a campaign dinner for Rep. Dana Rohrabacher, R-Huntington Beach. When the dinner was over, DeLay flew from Orange County to Seattle, where he appeared at a campaign event for then-Rep. Jennifer Dunn. Once that event ended, DeLay used the Group W jet to fly back to Washington, D.C. The DeLay, Rohrabacher and Dunn campaigns, which jointly funded the trip, paid Group W a total of $3,057, about what DeLay would have paid for a single hour on the jet, if he were paying for it on his own. DeLay's spokeswoman, Shannon Flaherty, declined to answer questions regarding the Group W flight. "He has a lot of other things on his mind these days," she said. Bill Allison, managing editor at the Center for Public Integrity, said that any money that companies such as Group W lose when subsidizing campaign travel pales in comparison to the benefits they might receive by solidifying relationships with legislators. "The company is donating something of value to a politician, a cheap flight on a charter jet – and it's getting something with potentially even greater value in return: face time with somebody who handles the purse strings of federal budget," he said. "In the end, the money that the company spends on the jet flights is a fraction of the benefits that can come out of it." FEC records show that DeLay took his first Group W flight in June 2003 on a trip with Cunningham. The two legislators paid a combined total of $3,765 for the trip. DeLay also used the Lear jet to fly to a campaign event for Rep. Buck McKeon, R-Santa Clarita, in July 2004 at a cost of $2,350. The political action committee of Rep. Roy Blunt, a Missouri Republican, also paid $1,590 for tickets on the plane. However, Cunningham spent the most time of any legislator on Group W's jet. In August 2003, Cunningham used Group W to fly to Coeur d'Alene, Idaho, where Idaho Republican Sen. Larry Craig was holding a golf tournament and fundraising dinner. Besides Craig's fundraising events, Cunningham's visit to Idaho included a hunting trip that he described as a fundraiser for his own campaign. According to Cunningham, the hunting trip almost cost him his life. He and the other hunters used 4 wheel, all-terrain vehicles to maneuver through the thick forests of the Rockies. But it was Cunningham's first time on a 4 -wheeler, and he was not adept at steering. On a tight curve, he lost control. The 4 wheeler ran downhill through the underbrush and the left side of Cunningham's chest slammed into a tree. "I almost got killed on that thing," he said. "I was lucky to walk away." He ended up missing the golf tournament as he recuperated from his injuries, although he joined Craig for dinner at the country club afterward. Cunningham's record of campaign expenses, which generally are so meticulous that they include his dues and single dinners at the tony Capitol Hill Club, do not reflect any campaign-related expenses for food or lodging in Idaho. And there is no FEC record of Cunningham paying for a flight to Idaho in the summer of 2003.

Politicians' private-jet use raises questions Cunningham among those who flew on tiny S.D. air carrier   8.5.05   Dean Calbreath SD UT San Diego's Group W Transportation is a private air carrier so small that until recently its entire fleet consisted of a one-16th ownership stake in a Lear jet. Yet Group W, owned by Poway defense contractor Brent Wilkes, has provided personal air transportation for some high-profile passengers, incl House Majority Leader Tom DeLay and Rep. Randy "Duke" Cunningham, who has flown on the jet to such locations as Idaho for a hunting trip and Hawaii for a golf tournament. Although the flights may be legal, critics say they serve as prime examples of how federal contractors and lobbyists use travel and other perks to make friends on Capitol Hill. "Making a corporate jet available for key members of Congress to use for their personal and business travel is a nice way to curry favor with people who can help get earmarked appropriations included in massive spending bills, not to mention the chance to put your lobbyist on a 5 hour flight in the next seat," said Sen. Russ Feingold D-WI best known for crafting campaign finance laws with Arizona's Republican Sen. John McCain. Congressional travel expenses have been in the spotlight since February, when it was reported that DeLay had accepted free trips from lobbyists. In the past 5 months, more than 200 members of Congress, incl DeLay's Democratic counterpart, Minority Leader Nancy Pelosi, have revised their travel reports to reflect trips that were paid for by special interests. Although members of Congress are permitted to take all-expense-paid travel related to their legislative work, they are required to disclose the trips within 30 days. Members of Congress cannot take free trips for campaign activities. Campaign laws require candidates to pay the equivalent of first-class commercial air fare when flying aboard corporate jets. However, since private jet travel is far more expensive than commercial air fare, politicians who comply with the law are getting an expensive gift from the company that owns the jet. Feingold introduced a bill in the Senate last month that would require lawmakers to pay charter fares for such flights, rather than first-class fares. "It's time to end the charade that says that the fair market value of a flight on a Lear jet is the same as the cost of a first-class plane ticket," Feingold said. "If that fiction is eliminated, the use of corporate jets as a lobbying tool will be history." Cunningham, R-Rancho Santa Fe, defends his trips, saying they were related to political fundraising activities and were paid for by his campaign. "Everything we've done that way has been paid for and is legitimate," he told The San Diego Union-Tribune. "When you go to a campaign fundraiser, it doesn't just involve raising funds. There can be other things involved, such as hunting or golfing." Federal Election Commission records show that Cunningham has paid for nine flights aboard Group W's jet since 2001, at a total cost of $15,674. But the FEC records – which only show the dates and amounts of the checks, not the dates or destinations of the flights – do not completely match up with Cunningham's trips. Additionally, there is no record that Cunningham paid for his own food or lodging on the trips. "Duke believes that all of his congressional and campaign travel has been properly reported," said his attorney, K. Lee Blalack. But he added that Cunningham is checking his campaign filings "and will amend those filings if any travel expenses were inadvertently omitted." At the time Cunningham was taking the trips, Wilkes' company, ADCS Inc., was winning multimillion-dollar contracts on projects approved by the House defense appropriations subcommittee, on which Cunningham sits. ADCS, a private company in Poway that specializes in converting paper records into computer records, has received tens of millions of dollars in military contracts since 1996. Pact aided by Cunningham is challenged FL software company seeks an accounting   7.29.05 Marcus Stern SD UT A Florida software company will ask a San Diego receivership judge today to order an accounting of $3.5 million in federal money that Rep. Randy "Duke" Cunningham helped a small group of political contributors and constituents obtain through a contract with the Internal Revenue Service. Integrated Actuarial Services of Ormond Beach, Fla., says the Rancho Santa Fe Republican, acting in his role as a member of the House Appropriations Committee, pressed the IRS to pursue an auditing project that led to a contract benefiting the San Diego group. The group, which includes two residents of Cunningham's district, incorporated in 1999 as First Auditors for the express purpose of pursuing the IRS auditing contract. None of them had an accounting background, and First Auditors had no other projects or clients. IAS, the Florida company, claims that First Auditors acted as little more than a shell company and used a Washington lobbyist and Cunningham's help to win the contract. IAS also claims that First Auditors improperly pocketed most of the money the IRS paid out in connection with the auditing contract, despite having almost no responsibilities under it. First Auditors denies any wrongdoing but is resisting an audit of how it spent the roughly $3.5 million it received from the IRS before the agency decided not to renew the program earlier this year. The cancellation came against the backdrop of IAS complaints to the IRS that First Auditors was not making payments to IAS. The software company had developed the specialized actuarial software needed to complete the contract and, acting as a subcontractor, was doing all of the work, including training, updates and support. Kenneth Noorigian, a San Diego bankruptcy attorney and one of three principals of First Auditors, said the company had assumed all the risk and had borne the cost of waging a lobbying effort in Washington to create the federal program. An undetermined amount of the $3.5 million the IRS paid First Auditors under the contract went to cover lobbying expenditures, legal fees and travel costs incurred by First Auditors before the contract began, he said. First Auditors relied on loans and investors until 2003, when it received its first disbursement under the IRS contract. It geared its activities during that time toward building support in Congress and the IRS for the auditing program that led to the contract. After the IRS canceled the program and the contract, First Auditors went into receivership. Today, IAS will urge receivership Judge John Meyer to find out how First Auditors spent the taxpayers' money before he closes the books on the company and its finances. "There will be no final resolution of this until we find out where the money went," said IAS Vice President James Kavanagh. Kavanagh, a software writer, and his brother Brian, an actuary, developed the actuarial software that is the basis for the program and the contract. They are former residents of Coronado. Cunningham, who wrote at least 5 letters to the IRS commissioner between 2001 and 2003 urging the agency to sign a contract for the program, wasn't available for comment. But his attorney, Lee Blalack, who said he knew nothing of the project, said he was certain his client would support an accounting by the judge. "If public money is involved, then I am sure he would support an accounting," Blalack said of Cunningham. "It's like asking if he supports apple pie." First Auditors' 3 principals and their Washington lobbyist donated a total of $11,600 to Cunningham's campaign and political action committee between 2001 and 2005. Of the principals, Noorigian gave Cunningham's campaign $5,500. San Diego attorney Michael Dicks contributed $2,000 to his campaign and an additional $1,500 to his leadership PAC, American Prosperity PAC, and Irwin Mandel gave Cunningham $1,000. Lobbyist Stephen Amitay, who masterminded First Auditors' lobbying campaign, gave him $1,600. Among the letters Cunningham wrote to 2 successive IRS commissioners on behalf of First Auditors was one to Charles Rosotti dated 5.16.01, in which he wrote, "I would like to request a meeting with you on behalf of my constituents, the principals of First Auditors' L.L.C., of San Diego." Other Cunningham letters sought updates on the program, which he said he was following "anxiously." Cunningham was instrumental in getting language into the appropriations committee report accompanying the annual IRS funding bills in 2002, 2003 and 2004 that called on the agency to spend $3 million, $4 million and $4 million, respectively, on the project. About $5 million was spent, including $3.5 million paid to First Auditors and $1.5 million spent internally by the IRS, before the IRS halted the program. The program was supposed to save taxpayers potentially billions of dollars each year by giving the IRS the ability for the first time to audit deductions claimed by the insurance industry for money set aside to pay off expected life insurance claims. The IRS hasn't reported any savings under the program. Noorigian and Amitay blame the failure on poor management by the IRS. Kavanagh blames First Auditors for not making the payments so that IAS could continue the needed support and updates. Official put price on favors, U.S. says   Rep. Cunningham 'demanded and received' an inflated amount for his home in return for political patronage, prosecutors allege. 8.26.05   Tony Perry L.A. Times San Diego   Rep. Randy "Duke" Cunningham (R-San Diego) "demanded and received" a bribe from a defense contractor who paid an inflated price for Cunningham's home in exchange for official favors, the U.S. attorney's office alleged in documents filed Thursday. The allegation was filed as part of a civil lawsuit in which federal prosecutors are attempting to seize Cunningham's current home in Rancho Santa Fe. It was the first public accusation by federal prosecutors of criminal acts by Cunningham, who has been under investigation by a federal grand jury in San Diego. Cunningham's attorneys called the allegation outrageous and denounced prosecutors' use of a civil lawsuit in advance of a possible criminal indictment as a violation of their client's rights. Mark Holscher, one of the lawyers, said the 8 term member of Congress "strongly denies these allegations, and we will contest them in court as soon as the judge permits us to do so." Prosecutors declined to comment on the case. But in the documents filed Thursday, they allege that Cunningham and his wife, Nancy, took the illegal gains from the sale of their previous home in Del Mar Heights and used them to buy their current house. As a result, the new home should be forfeited, much as the govt seizes property from drug dealers and other criminals, prosecutors say. Cunningham "demanded and received" the inflated price from defense contractor Mitchell Wade "in return for being influenced in the performance of his official acts as a public official," in violation of federal law, prosecutors say in the documents. Though the filing does not use the word "bribe," the law the documents cited as having been violated is the one covering bribery and graft. The documents filed by the U.S. attorney's office also indicate that the Internal Revenue Service is involved in the investigation. Cunningham sits on two House committees that review the Pentagon budget, and could influence the flow of defense contracts. The filing does not indicate what kind of favors Cunningham allegedly did for Wade. Wade's former company, MZM Inc., which Cunningham has said he championed, has received $163 million in federal contracts, mostly for classified defense projects involving the gathering and analysis of intelligence. The govt's suit seeking forfeiture of the Cunningham home remains sealed. A hearing is set for 10.9.05 on Cunningham's demand that the lawsuit be thrown out. One issue at the hearing will be a demand by his lawyers to unseal the suit. The allegations against him involve the sale of the Del Mar Heights house in November 2003. Wade paid Cunningham $1.67 million for the house, then sold it eight months later for a $700,000 loss. A month after selling the Del Mar Heights home, the Cunninghams bought a 5 bedroom, 8 bathroom house in exclusive Rancho Santa Fe for $2.55 million. Prosecutors allege that the couple made a $1.4-million profit on the Del Mar Heights sale, which they used to "buy up" to Rancho Santa Fe. After weeks of controversy, Cunningham on July 13 tearfully announced that he would not seek reelection next year and would sell the Rancho Santa Fe house and distribute some of the profits to local charities. The home has been listed for sale at $3.5 million. Days later, prosecutors in U.S. Atty. Carol Lam's office in San Diego filed a sealed lawsuit to seize the home. No documents were put in files open to the public. The lawsuit became public knowledge when a document was filed in the recorder's office warning prospective buyers of the Rancho Santa Fe home about a pending lawsuit. If Cunningham is unable to sell the Rancho Santa Fe house, he could have trouble raising funds to hire lawyers. In a related move, he has sought approval from the Federal Election Commission to start a legal defense fund, a common tactic for politicians under investigation. So far, no criminal charges have been filed in the case. Wade's company has been sold. In one of his few public statements, Cunningham has called Wade a close friend. Part of the federal probe involves the fact that Cunningham has lived aboard Wade's 42-foot boat, renamed the Duke Stir, while in Washington. Advocacy groups have demanded that Cunningham immediately resign from Congress, but he has refused. Several Republicans are jockeying for their party's nomination to succeed him in the 50th Congressional District, which covers much of affluent northern San Diego County. Cunningham's opponent in last year's election, Democrat Francine Busby, is seeking her party's nomination. Federal agents have raided the headquarters of MZM and the Poway headquarters of a second defense firm. In both cases the companies had contributed to Cunningham's election campaigns. It cost arms & legs when Duke killed the Armadillo   A San Diego co. almost got their land mine killer into the military's hand's but corruption stopped them cold.   12.05   San Diego Observer (sic) …   San Diegan Dan Wolf (created) a machine called the "Armadillo", a simple device that looks like a rototiller on steroids. The Armadillo fed on landmines, both the small ones intended to maim somebody by blowing off a foot or a leg, and the big anti-tank mines that can spin an M1 Abrams tank like a top. A chance meeting at the Big Kitchen café in Golden Hill introduced him to Floyd Fronius, a maker of prototypes of all kinds whose Aeolus Machine shop built the Armadillo and oversaw the refinements that turned it into a dependable, easily repaired, quality piece of equipment intended to go onto most any vehicle and get pushed into battle where it was needed at a moment's notice. Over much of 2001, testing and refinement of the Armadillo occurred at the Sheriff's Firing Range and later at Camp Pendleton. Both law enforcement and the Marines were exuberant in their praise of the Armadillo. It blew up every mine it found and kept on rolling. Wolf received congratulations from high ranking Marine officers as well as Navy Seals who recognized it as a portable system that could fit their needs well. The future seemed bright for Wolf and his fire-eating Armadillo. All he had to do was get in front of the military in Washington & Congress which would decide whether or not to buy. Wolf had to convince Cunningham of the merits of his machine. Details differ among the principals over that meeting. Wolf is adamant that Cunningham let him know, in effect, that, unless Wolf "could bring something to his (Cunningham's) table", the Armadillo would go nowhere. Another associate recalls a friendlier meeting with Cunningham's staff who later became impossible to contact and froze the Armadillo out of Cunningham's office. Whatever the details, what is known is that a place in a procurement bill that earmarked some money for acquisition of the prototype Armadillo and development for others was erased by Cunningham at a later stage in the House. …

Wilkes given overnight furlough for daughter's graduation   6.13.08   Greg Moran SD UT Former Poway defense contractor Brent Wilkes was let out of jail for one night yesterday so he could attend the high school graduation of his daughter. The unusual, though not unprecedented, move by U.S. District Judge Larry Burns came after Wilkes penned a personal plea to the judge on Monday and over objections from prosecutors at a hearing yesterday morning. Burns set several conditions, among them that Wilkes would be outfitted by federal marshals with a GPS device when he was released before the evening graduation. He also has to be at his Poway home, now owned by a relative, by midnight, and he can't engage in any monetary transactions or sign documents transferring property. Those latter conditions stem from ongoing disputes between the government and Wilkes over his finances, and Burns' previously stated concerns that Wilkes, convicted of economic crimes and who the judge has said misled him on a financial disclosure affidavit, poses a financial threat to the community. Wilkes was convicted of conspiracy, fraud and bribing former U.S. Rep. Randy “Duke” Cunningham and was sentenced by Burns in February to 12 years in prison. At the time, Burns denied a request that Wilkes remain free while he appeals. But 10 weeks ago, an appeals court reversed that decision and said Wilkes was entitled to post bond. But he has been unable to pull together $1.4 million in collateral Burns wants to secure a $2 million bond. The struggle has played out in a half-dozen hearings since March. Prosecutors have objected to some real estate Wilkes put up. Wilkes' relatives were ready to pledge funds in retirement accounts but backed off when told by prosecutors that they might face a substantial tax bill of up to $100,000. Wilkes eventually asked to be released on a lower $500,000 bail but Burns denied that. Wilkes' lawyer could not be reached for comment yesterday and prosecutors, who opposed his overnight release, also declined to comment. But several defense lawyers not connected to the case said short releases of prisoners are not unheard of. Knut Johnson said he once had a client who was awaiting sentencing who Burns allowed out for a holiday dinner with his family. “I think Judge Burns has shown that he's sensitive to important events in people's lives,” Johnson said. He said the fact that Burns has said that Wilkes is not a risk to flee the jurisdiction, and that the appellate court had said he should be released on bail, probably also weighed in the decision. Defense lawyer Bob Rose also said he knew of instances where someone in custody serving a sentence was furloughed for a short time. “It happens, but not for trivial things,” he said. Wilkes has to report back to court by 10 a.m. today, when he will be returned to jail. \

Prosecutors blast Wilkes, seek 25-year prison term Poway defense contractor called a 'war profiteer' 2.16.08   Greg Moran SD UT Federal prosecutors say Brent Wilkes is a war profiteer, a lecher and a liar whose decade-long bribery of former Rep. Randy “Duke” Cunningham netted him $46 million. For that, and for orchestrating the largest congressional bribery scheme in history, they say the Poway defense contractor should be sentenced to 25 years in prison. In court papers filed this week, prosecutors from the U.S. Attorney's Office threw the book at Wilkes, 53, who is scheduled to be sentenced Tuesday. They blasted his once-high-flying lifestyle, belittled his claims of innocence and branded him an “overgrown frat boy” fueled by greed and avarice. At minimum, Wilkes should receive no less than 16 years and eight months in prison, prosecutors said. That would be exactly twice the length of the sentence Cunningham received after pleading guilty to conspiracy and tax evasion. Wilkes should get a longer sentence because he was the “architect” of the scheme and his profit was fatter and lack of remorse far greater than Cunningham's, prosecutors said. They describe the disgraced former Republican congressman from Rancho Santa Fe as “a broken old soldier” and Wilkes as an “unrepentant war profiteer.” Prosecutors said Cunningham should be blamed for his role, but in a footnote said, “There can be little doubt Wilkes was the spider, and Cunningham the fly, in this web of corruption.” The sentence sought by prosecutors is less than the 60-year term recommended by probation officials, but it's substantial for white-collar crimes. The recommendations differ because prosecutors have a different analysis of the complex federal sentencing rules. Wilkes' lawyer, Mark Geragos, could not be reached for comment yesterday. Geragos has objected to the sentencing calculations of the probation officials and has submitted motions requesting a new trial for Wilkes based on what he described as prosecutorial misconduct and errors made by U.S. District Judge Larry A. Burns. A jury convicted Wilkes 11.5.07 of conspiracy, bribery, fraud and money laundering. Evidence at the trial showed he showered expensive meals, gifts, fancy trips and cash bribes on Cunningham. In one now-infamous instance, prosecutors said Wilkes paid for two prostitutes for himself and Cunningham while on a lavish vacation in Hawaii. During his testimony, Wilkes denied hiring them or having sex with them. In the court papers, prosecutors said Wilkes was “a frequent and enthusiastic patron of prostitutes” and said he kept in his office safe a tape of him having sex with two prostitutes. In exchange for the gifts and money, the veteran congressman, who had a seat on a powerful defense committee, used his influence to earmark money in budgets and steer projects that benefited ADCS Inc., the Poway defense contracting firm that Wilkes owned. The government said that the contracts were not only corruptly gained but that Wilkes gouged taxpayers and delivered shoddy work, all to increase his profits.

In one instance, an example of what prosecutors called “war profiteering”, Wilkes got Cunningham to divert $4 million originally budgeted in an anti-terrorism bill after 9.11 and channel it to a program for ADCS. In total, an investigator said in court papers that the federal government lost at least $30 million and as much as $60 million on the contracts that ADCS was involved in.
Geragos will probably contest those amounts. Under federal rules, the amount of the loss to the government, or the amount of the benefit the briber received, are factors that can increase a sentence.

et al

Wash.D.C.   In a case that echoes the Jack Abramoff influence-peddling scandal, 2 N. California GOP congressmen used their official positions to try to stop a federal investigation of a wealthy Texas businessman who provided them with political contributions.
Reps. John T. Doolittle and Richard W. Pombo joined forces with former House Majority Leader Tom DeLay of Texas to oppose an investigation by federal banking regulators into the affairs of Houston millionaire Charles Hurwitz, documents recently obtained by The Times show.

The Federal Deposit Insurance Corp. was seeking $300 million from Hurwitz for his role in the collapse of a Texas savings and loan that cost taxpayers $1.6 billion. The investigation was ultimately dropped.
The effort to help Hurwitz began in 1999 when DeLay wrote a letter to the FDIC chair denouncing the investigation of Hurwitz as a "form of harassment and deceit on the part of govt employees." When the FDIC persisted, Doolittle and Pombo, both considered proteges of DeLay, used their power as members of the House Resources Committee to subpoena the agency's confidential records on the case, including details of the evidence FDIC investigators had compiled on Hurwitz.

Then, in 2001, the two congressmen inserted many of the sensitive documents into the Congressional Record, making them public and accessible to Hurwitz's lawyers, a move that FDIC officials said damaged the govt's ability to pursue the banker.
FDIC chief spokesman characterized what Doolittle and Pombo did as "a seamy abuse of the legislative process." But soon afterward, in 2002, the FDIC dropped its case against Hurwitz, who had owned a controlling interest in the United Savings Assn. of Texas. United Savings' failure was one of the worst of the S&L debacles in the 1980s.

Doolittle and Pombo did not respond to requests for interviews last week. They publicly defended Hurwitz at the time, saying the inquiry was unfair. Hurwitz's lawyer said Friday that the FDIC had been overzealous. This summer, a judge in Texas agreed and awarded Hurwitz attorney fees and other costs in a civil suit he filed. "They sought to humiliate him," U.S. Dist. judge Lynn N. Hughes said in the ruling. The govt is appealing the decision.

In key aspects, the Hurwitz case follows the pattern of the Abramoff scandal: members of Congress using their offices to do favors for a politically well-connected individual who, in turn, supplies them with campaign funds. Although Washington politicians frequently try to help important constituents and contributors, it is unusual for members of Congress to take direct steps to stymie an ongoing investigation by an agency such as the FDIC.
Actions of the two Californians reflect DeLay's broad strategy of cementing relationships with individuals, business interests and lobbyists whose financial support enabled GOP to extend their grip on Congress and on govt agencies as well.

The system DeLay developed and Abramoff took part in went beyond simple quid pro quo; it mobilized whatever GOP resources were available to help those who could help the party.
In the Hurwitz case, Doolittle & Pombo were in a position to pressure the FDIC and did so. Pombo received a modest campaign contribution. In another case, Pombo helped one of Abramoff's clients, the Mashpee Indians in Massachusetts, gain official recognition as a tribe; the congressman received contributions from the lobbyist and the tribe in that instance.

Austin TX based nonpartisan electoral reform group Texans for Public Justice research dir. Andrew Wheat put it this way: "DeLay and Hurwitz seem like natural allies in that they have geographic and ideological proximity. Mr. Hurwitz is a guy who has a reputation of being willing to pay to play. And DeLay likes to play that game too, so there's a natural affinity."
DeLay announced Saturday that he was giving up his efforts to regain the majority leader position. He was majority whip when he first became involved in helping Hurwitz.

In the Abramoff scandal, members of Congress allegedly did favors for the politically connected lobbyist's clients, including Indian casinos, and received campaign contributions and lavish free entertainment. Last week, the lobbyist pleaded guilty in separate cases in Miami and Washington in a deal that govt investigators hope will lead to more prosecutions. Others involved have also made deals to cooperate, and Washington is braced for new criminal charges to come.
The episode involving Hurwitz and the two California congressmen took place with little public notice just before the Abramoff scandal began to escalate. The Sacramento Bee published a story when Doolittle inserted FDIC investigative documents into the Congressional Record, noting that it occurred at a time when Congress was distracted by 9.11.01 attacks and the anthrax episode.

But what lay behind Doolittle's action, and the actions of Pombo and DeLay, did not become clear until recently, when govt documents and copies of letters between the congressmen and FDIC officials were obtained by The Times. J. Kent Friedman, the general counsel for Hurwitz's vast Houston-based holding company, said last week that the FDIC was overzealous in its dealings with his boss.
"Their case was weak from the start. They had a terrible case," Friedman said. He said anyone trying to connect the congressmen to the fact that the case fell apart would be "attempting to put a bow on a pig."

The Texas S&L in which Hurwitz held a controlling interest of about 25% collapsed in 1988 as part of a financial fiasco that took federal regulators years to untangle. The investigation of Hurwitz began in 1995 and continued for about 7 years before it was dropped.
After DeLay's 1999 letter attacking the investigation failed to dissuade the FDIC, Doolittle weighed in with a statement on the House floor in 2001, saying the FDIC investigators were "clearly out of control" and should have "dropped the case, period."
Pombo, in his own 2001 floor statement, suggested that the banking regulators were using strong-arm methods against Hurwitz, or what Pombo called "tools equivalent to the Cosa Nostra, a mafia tactic."

Doolittle, 55, an 8 term congressman, represents California's fourth district, the Sierra Foothills region and the eastern suburbs of Sacramento. He has a consistent conservative voting record, opposing gun control and abortion and siding with property rights, timber and utility interests against environmental groups.
By 2000, he had grown close to DeLay, working with the GOP leader to oppose proposed changes to campaign finance law and restrictions on fundraising. When DeLay was indicted in Texas last year, Doolittle distributed about 100 lapel pins in the shape of tiny hammers as a tribute to the man nicknamed the "Hammer" for his ability to pound congressional Republicans into line.
Doolittle also was closely aligned with Abramoff. Records show that Abramoff gave Doolittle tens of thousands of dollars in contributions and employed the congressman's wife for other fundraising activities.

Pombo, the son of cattle ranchers, plays up his cowboy roots, often appearing in his district wearing a ranch-hand's hat and ostrich-skin boots. Forty-five years old, a seven-term congressman, he represents the fertile farming expanse of the Central Valley.
He had impressed DeLay with his fundraising prowess, garnering about $1 million for his 2002 House reelection, which he won easily. Not long after his role in helping Hurwitz, the GOP House caucus, led by DeLay, helped get Pombo elected Resources Committee chair over several more senior Republicans.

Hurwitz has been a prolific campaign donor since the early 1990s. He has contributed personally and with funds provided by his Houston-based flagship company, Maxxam Inc., through subsidiaries such as Kaiser Aluminum, and through a company political action committee, Maxxam Inc. Federal PAC.
In the last three federal elections cycles, those entities have given about $443,000 in political contributions, most of it to conservative politicians, including President Bush, for whom Hurwitz pledged to raise $100,000 in the 2000 campaign and also helped during that year's vote tally deadlock in Florida.

Hurwitz has been generous with DeLay too. Starting in the 2000 election cycle, the businessman and his committees have distributed at least $30,000 to DeLay and his federal causes, including $5,000 for his current legal defense fund in the Texas money-laundering case.
Hurwitz also contributed $1,000 to Pombo for his 1996 reelection campaign. Through the Maxxam PAC, Hurwitz gave Doolittle $5,000 for his 2002 reelection campaign and then followed up with $2,000 more for his 2004 race.

When DeLay went to bat for Hurwitz, he was particularly critical of reported internal govt discussions that would have pressed Hurwitz to settle his obligations for the collapsed S&L by selling the govt vast forest areas and redwood trees in Northern California near Scotia. The forest land was owned by Hurwitz's Pacific Lumber company
"I am extremely concerned," DeLay told then-FDIC Chairwoman Donna A. Tanoue, "about the apparent abuse of governmental power and what appears to be misconduct in the form of harassment and deceit on the part of govt employees."
Tanoue responded by telling DeLay "we can assure you that the FDIC lawsuit against Mr. Hurwitz was not filed for political reasons."

The investigation pressed on, and a year later the House Resources Committee, which had jurisdiction because of the forest area, set up a special Headwaters Forest Task Force and launched its own review. Doolittle was appointed task force chairman, and Pombo one of its members.
The committee's general counsel Duane Gibson , who later went to work for Abramoff, was named the chief investigator. They immediately subpoenaed internal records from the FDIC and the Office of Thrift Supervision, which also had responsibilities for S&Ls.
Both agencies were wary and, although complying with the subpoenas, repeatedly urged the lawmakers not to make the documents public or share them with Hurwitz. William F. Kroener III, general counsel at the FDIC, warned the committee that Hurwitz and his lawyers were not entitled to see many of the documents. Kroener told the panel that, should the material end up in their hands, it "could significantly injure our ability to litigate this matter and reduce damages otherwise recoverable to reimburse taxpayers."

Office of Thrift Supervision chief counsel Carolyn J. Buck also wrote the committee emphasizing that "we note our objection to any publication or release of these documents." The task force was set up for 6 months, and disbanded in December 2000. It held one hearing, and called FDIC and Office of Thrift Supervision officials as witnesses.
At that hearing, Tanoue defended the FDIC's investigation.
"I have listened to and considered the arguments made directly to me by representatives of Mr. Hurwitz," she testified. "However, I have found no compelling reason to take the extraordinary step of … taking this case out of the hands of the judicial system."

Kroener testified that the FDIC was not interested in a trees-for-debt swap, saying his agency "has expressed its preference for a cash settlement." Six months later, in June 2001, Pombo submitted a portion of the subpoenaed documents that filled 14 pages in the Congressional Record.
Six months after that, in December 2001, Doolittle did the same, even though he was no longer a member of the committee. And his submission was much larger, filling 111 pages. The documents were so voluminous that Doolittle and Pombo had to pay a total of about $20,000 from their congressional accounts to cover the extra printing costs.

The FDIC was outraged over the documents' release. Its chief spokesman, Phil Battey, said in a statement to the Sacramento Bee at the time that the publication of the materials was a "subordination … and a seamy abuse of the legislative process."
Not long afterward, the FDIC dismissed its case, and the Office of Thrift Supervision settled with Hurwitz for about $200,000 in administrative costs.

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