Marcus Stern discusses The Wrong Stuff: The Extraordinary Saga of Randy "Duke" Cunningham, the Most Corrupt Congressman Ever Caught.
Duke Cunningham was an American success story, but today he's in prison as one of the most corrupt Congressmen in U.S. history. These journalists won the Pulitzer Prize for the story uncovering Cunningham's crimes. They provide new details on a story that is still unfolding- Book Passage
Marcus Stern is a journalist and the author of The Wrong Stuff: The Extraordinary Saga of Randy "Duke" Cunningham, the Most Corrupt Congressman Ever Caught.
We are extremely fortunate today, to have with us Marcus Stern who, as far as I am concerned is amodern day American hero. We don't get many and this story in this book, I think and we have beenso discouraged about the performance of the press. So just last night, we listened to Thomas Ricks getbeat about the head and shoulders for the failures to expose the lead up to Iraq. But here is a reporterwho did the deal. And not only did the deal, he set the sleeze bag after the joint, which is one of thereally great achievements of all times as far as I am concerned. I mean it really is, I am a bit earnest,this is a marvelous accomplishment. Now I picked this up off to American journalism review, and sothe gum shots out of this is not quite of what one would think it turns out, searching nexus propertyrecords turned to learn that Cunningham had sold his Del Mar home to something called 1523 NewHampshire Avenue. An address not a person.Another search revealed this address was the name of a Nevada company that listed Wade who wasone of these players as his only officer. Stern then discovered that Wade had registered a secondcompany in Nevada. A defense contracting company named MZM Inc.. Wow - world is reallychanged. A Google search turned up a Washington DC address on MZM's website. The site boastedabout MZM's recent influx of federal contracts. Languishing previously, the company began receivingtens of millions of dollars in contracts from the Pentagon, around the time of the sale of the Del Marhouse.Now isn't that fabulous, that began the unraveling as Mr. Stern says, now the Cunningham Scam andit's a wonderful story, it's a grand book and we are very fortunate to have it as I say a legitimateAmerican hero with us tonight.Well, thank you thank you for that introduction and I don't know if any of you know about DaveRichards there gave Anne Richards her last name and so she is one of my heroes one of my politicalheroes. Can you hear?It's just here for show. All right can you hear me okay. And if you have trouble just let me know. I amgoing to start off by talking just a little bit and and then what I hope we can do is we get into aconversation. Duke Cunningham is a sort of corky political figure in America. And after his misdeedswere exposed, there was an effort to sort of paint him as an outlier as there is nothing wrong with thesystem. And so one of the things I feel strongly about is if there are some real institutional problems.It's not just one guy who happened to be flawed, have a flawed character. So I hope we can talk little bitabout him, but if you want to talk about earmarks, if you want to talk about the appropriation's process,to procurement process and corruption and how do we attack corruption in government and I have ahope again that's where we will go with this.But let me start off do does everybody here know the story of Duke Cunningham or should I shalljust okay well the idea of being a hero. Thank you very much but that's a scary thing because DukeCunningham went off to Vietnam and on May 10th 1972, he shot down three MIGs in one day over inseven minutes. And nearly got himself and his backseater killed during a couple of things that were akind of dumb, he admits - and retrospect. But he knocked down - he shot down three MIGs giving himfive and made him the first ace in the Vietnam war and the first navy Ace since the Korean war.And that for him, those seven minutes, ended the war. After that he went to state side and he did, hewent to parades and he was on the Today show and he was a professional war hero. And so you sayhero, in the beginning of this we have a little saying, by F. Scott Fitzgerald, "show me a hero and I willwrite you a tragedy". So I will sort it. I will turn down the hero thing, but thank you.And let me start off by just telling you a little bit about how I got on to the story because that'ssomething that I get asked a lot. There are a lot of people who sort of speculated that there was a tipinvolved and - or somehow, but there wasn't it was just you know, I was in my office one afternoonand Duke Cunningham who represented a district in San Diego had taken two trips to Saudi Arabia.And if you know anything about Duke Cunningham, Duke Cunningham is you know, tried on that, hereally wore the mantle of war hero, he was conservative, he was supposedly a family man and he wasvery pro defense and very-very much into the war and terrorism after 9/11 that became you know, acause that lead for him. I couldn't understand why he would go to Saudi Arabia twice, he liked todrink, he liked to hang out with women, not his wife. As Saudi Arabia is not a place where somebodydoes that. And so I could see him going to Saudi Arabia once by accident. But twice, and hisexplanation for why he went was that he was trying to improve relations between the United States andSaudi Arabia. And I have never known him to want to improve relations between anything. And hetook so I was so skeptical of that and I went online and I tried to figure out "why did he go to SaudiArabia?". I thought it must be have to do with an arms sale, I knew it had to do with money. Right thisin my mind I knew that.And I spent a couple of hours trying to find a connection between Duke Cunningham, the guy whotook him which was a constituent Saudi-American named Abduljawad and Boeing or Northrop or youknow, the F-18 or something. I didn't find anything, but I thought well let me do one last thing before Igo off and get my latte. And so I went to see if he upgraded his living accommodations. And you know,as something that I had done in the past with members of the congressional delegation from San Diegobecause we have a main paper in San Diego. So I did, I looked, I went into you know, check theproperty records. And it turned out, he had purchased a house, a year and half earlier for $2.55 millionin a place called Rancho Santa Fe.And Rancho Santa Fe has residents like Bill Gates you know, and it's not our congressmen and his wifewho happens to be a school administrator, that was just it was a stretch to see Duke Cunningham whowas basically a public servant and his wife an administrator to see them living in the same communitywith Bill Gates. So and it was remarkable to be that nobody had noticed this in a year and half. But Isaid okay, what's wrong with this picture, I said "let back track, let me look and see how he purchasehis house?", may be he sold his old house which was in a community called Del Mar Heights. May behe sold it. Got a big profit and that allowed him to buy the Rancho Santa Fe house. So I looked and Isaw that he sold his Del Mar House Height's House for $1.675 million which was a big windfallfrom what he paid, I mean that's a big increase. He walked away conceivably with a million dollars ormore and so I thought well may be that's you know it's how he did it. he just got but then I noticedthat it was, the purchaser wasn't just a average you know, John Blow it was or Mary Jane orwhatever it was 1523 New Hampshire avenue Inc. which I recognized, having grown up in DC, aspossibly being a Washington DC address.You know, that's really curious that a company bought his house. Let me see what this company is.And so I went on, and I just found - I went through the records of the secretary of states. Records inNevada, found it registered and it was to a guy named Mitchell Wade and if he had just put MitchellWade on that first transaction, if it's rather than 1523 New Hampshire avenue Inc. I am sure I wouldhave just walked away and gotten my latte. But it's but anyway and I never heard of MitchellWade, so I saw Mitchell Wade, and then I saw that there was a second company registered in Nevadato Mitch Wade and it was something called MZM Inc. and so I then did as I said I turned to thatsuper sophisticated new tool of investigative reporters and I Googled MZM Inc. and I found thiscorporate website and it was boasting about how it had gone from no prime contracts just two yearsearlier to having more than a 100 million in the time frame rough time frame for this sale.Now defense, Duke Cunningham sat on something called the Defense Appropriation Subcommittee.And that allowed him to have a pretty big sway over who got what contracts. He denies it and hedenied it to me when I interviewed him. He told me "Marc I don't have anything to do with contracts".But as a member of the defense appropriation subcommittee, he surely did. He was very influential onthat score and so I figured out pretty much right there that this you know, basically that Cunninghamwas getting paid off by this defense contractor in return for his help steering 100s and millions ofdollars in defense contracts to that contractor who had never had prime contract before.By the way I then looked to see what Mitchell Wade, this man I didn't know what he did with thishouse. and I saw that he put it right back on the market, almost immediately for the same price and itlanguished on that in that San Diego's market and it was sizzling, double digit increases every year. Itlanguished on the market for eight months before selling at a $700,000 loss. So what I needed at thatpoint was to - is a formal assessment, appraisal of the properties. And so I contacted an appraiser andSan Diego was going to do it and the appraiser said I will get you the results in a week and then halfway through the week he said you know, - oh, not half way through the week. Half way through theweek, we got Comps what are called Comps you know, the listing of the prices of the houses in thatneighborhood at that time of the sale.But at the end of the week he told us, he was not going to deliver a appraisal, a formal appraisal. Andwe said "why?" And he said "I am not going to do this I am not going to talk about it, I am just notgoing to do it." so we called another appraiser in San Diego and that appraiser was accommodatinguntil we told him the address. And then he said, he wasn't going to do the appraisal. And so we called athird one. And he wouldn't explain why. We called a third one and the third appraiser did the samething, until we mentioned the address, everything was fine. The moment we mentioned the address,you know, it was no deal you know, deal was off. So we said "why?" and he finally said because theappraiser's association of Sacramento has told us that we shouldn't get involved.So we called the appraiser's association of Sacramento, and they didn't call us back for a really longtime, but when they finally did, they said, "Well, that's just sort of generic advice we give not to getinvolve in second party transactions I think they call it. So what we had to do was send somebody overtake a look at the house our self, take pictures and establish that this house belonged in the lower endof the spectrum of prices for Del Mar at that time rather than the higher end. And it was pretty clear Imean unfortunately he didn't take care of the house - they didn't take care of the house. It was prettydeteriorated; it did not have an ocean view. So we could establish, it should have been at the lower endof the spectrum of house prices. And after that it was simply a matter of calling Mitchell Wade up andconfronting him, I still didn't know at that point, are they going to be able to explain this, may be theywill have a perfect explanation for it and also Cunningham and so I called Mitch Wade's office andwhen I told him what I was interested in, they hung up on me so I thought that's a pretty encouragingsign and then they gave me totally bogus story, then I said you know, "hey I think you might want togo back to the well on that one" so you can come up with something better. And they didn't. So then Icalled Cunningham. Cunningham and I had a nice conversation. That lasted about seven minutes,excuse me for just a second.Thank you. And it was a low, key conversation. But I knew going into that conversation that I neededhim to tell me one of the thing. I needed him to tell me that he had helped Mitchell Wade and MZMInc. get contracts and that's all I needed really for my story, I mean that at that point I knew I wasgood at least for this the first story. Was he the one after that but I knew I have a story if I couldestablish that Cunningham had sold his house to a defense contractor at an inflated price and then alsohad helped this defense contractor get contracts. So Cunningham delightfully just wondered and said"oh yeah I helped him just like I have helped any contractor". A lot of contractors, he mentioned anumber of other contractors that he helped. And at that point I said "okay my job is done here and Ididn't mention him okay. Well, okay but did any of them buy your house from you at an inflated price?Because now what I had had was I have what we call a quid pro quo, you know, you need to establishthat the congressman got something in exchange for doing an official duty. And that's what I call, Imean that's turns out to be an indictable offense and so anyway so we hung up and he had no idea thathe had hung himself. He had absolutely no idea.And we reviewed our story on June 12 2005 and two days later the conservative republican editorialpage of the San Diego union tribune was just filled with angry letters from retired military, and youknow, you would think, oh they must be angry at the press for defiling their hero, disparaging him atthis. And no they were angry at Duke Cunningham, they were just furious. I mean this was a kind oftransaction that was so clear to them. And to the reader, that was like a punch in the nose. There wasnothing confusing about this at all or questionable about this. Lot of hard facts from public records arereally bad explanation from Duke Cunningham. They made it clear that he had in fact engaged in somekind of improper conduct. And so the readers you know, I was surprised, but the readers were veryupset about this. And within a week, there was a grand jury convened in San Diego to begininvestigating. Within three weeks they were issued executing search warrants and they weresearching his house, Mitchell Wade's house, the yacht that congressman Cunningham was living on thatwas paid for by the contractor. And you know and it didn't take long before he was finally headmitted his guilt, he resigned his office and he is now serving eight years and four months in prisonin Tucson.Now there are other players in this scandal and one of them is another defense contract or - MitchellWade, the guy who did the bribing. He has pled guilty, and he is waiting sentencing. He will do someserious jail time. There is a guy, defense contractor, the company's ADCS, Brent Wilkes he is fromPoway in San Diego. His trial is upcoming, he is also probably going to do some serious I believe hewill get convicted - the evidence is pretty overwhelming and you know, well okay you know, with theinitials OJ sort of you know, as caveat there and just anybody can get off I suppose, but the evidence ispretty compelling that he bribed Cunningham. And then there is the numbered three guys at the CIAuntil recently. The guy named Dusty Fogo and he also has been indicted, he is awaiting trial. There is afellow named Tommy Kontogiannis, he as a New York developer who basically laundered the bribes.He has pled guilty and then his nephew is being indicted, he has pled not guilty. So there is still lot of thisto play out on the court the criminal courts. And the worst fear I think for someone like Karl Rovewould be if someone like Brent Wilkes the second defense contractor were decide to plea guilty andwork with the government because Brent Wilkes was given three quarters of a million dollars torepublicans. And he has flown Tom Delay around on his private jets and I believe that there is a goodchance of Brent Wilkes to talk.And really cooperate with the government that someone like Rove would be worried about that puttinga few more republican seats in jeopardy. So Rove would not want that. Anyway so I don't want to sithere and talk for an hour so just anybody go ahead, yeah.