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US: The Duke Stir and the Defense Contractor

When Mr. Cunningham wanted to sell his house in 2003, he didn't bother to put it on the market. Instead, according to reporting by Marcus Stern of Copley News Service, Mr. Cunningham -- who sits on the defense appropriations subcommittee -- turned to a defense contractor. The contractor, Mitchell Wade of MZM Inc., bought the house for $1,675,000. He then put the house back on the market, where it languished for 261 days before selling for $700,000 less than the original purchase price.


by EditorialThe Washington Post
June 17th, 2005

IF ANY MORE PROOF were needed that it's imperative to resolve the standoff preventing the House ethics committee from functioning, it arrived this week in the form of news stories about Rep. Randy "Duke" Cunningham, a San Diego Republican.

When Mr. Cunningham wanted to sell his house in 2003, he didn't bother to put it on the market. Instead, according to reporting by Marcus Stern of Copley News Service, Mr. Cunningham -- who sits on the defense appropriations subcommittee -- turned to a defense contractor. The contractor, Mitchell Wade of MZM Inc., bought the house for $1,675,000. He then put the house back on the market, where it languished for 261 days before selling for $700,000 less than the original purchase price.

Mr. Cunningham, meanwhile, upgraded to a $2.55 million house, with 7 1/2 baths and a five-car garage. MZM, one of Mr. Cunningham's top campaign donors, obtained millions in government contracts; the congressman, who also sits on the House intelligence committee, acknowledged to Mr. Stern that he had helped MZM win contracts, as he said he has helped other firms. Government contracts for the company, whose Web site describes it as helping solve "enigmatic problems . . . in the areas of intelligence collection and analysis," grew from $41 million in 2003 to $66 million in 2004, according to Washington Technology magazine.

Mr. Cunningham said in a statement that he didn't do anything wrong. He said the sale price was based on "comparables from an independent source" -- but it turns out that source was a real estate agent whose family also has contributed heavily to Mr. Cunningham; Mr. Wade simply paid the asking price. "I have no reason to believe the value of the house was inflated then, and I have no reason to think so today," Mr. Cunningham said. So why did Mr. Wade take such a loss, when the San Diego housing market was booming? And why does Mr. Cunningham, when in Washington, live on a yacht, the Duke Stir, owned by Mr. Wade?

These questions cry out for an ethics investigation. Unfortunately, the committee is sidelined by a dispute between its chairman and ranking Democrat. The chairman, Rep. Doc Hastings (R-Wash.), wants his longtime chief of staff to serve as staff director; the ranking Democrat, Rep. Alan B. Mollohan (W.Va.), says that contravenes committee rules that require bipartisan agreement on committee hiring. As we've said before, on this one, Mr. Mollohan has the stronger argument; the last thing the committee needs is another whiff of politicization.

House Speaker J. Dennis Hastert (R-Ill.) this week called the gridlock "unconscionable" but said he won't get involved in trying to end it. "Two adult chairmen ought to be able to sit down and hire staff and go to work without somebody meddling in how they operate," Mr. Hastert said. Maybe so, but since they can't, and since the House needs a functioning ethics committee, it's time for the speaker to lead.





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