WASHINGTON – When Rep. Randy "Duke" Cunningham first responded to questions about his dealings with defense contractor Mitchell Wade, he stressed that his position on the House defense appropriations subcommittee did not enable him to secure contracts for Wade's company, MZM Inc.
"I do not have the authority or ability to award a contract to Mr. Wade's company and no single member of Congress, no matter how influential, can dictate to the armed services who will be awarded contracts," the Rancho Santa Fe Republican said during a June 23 news conference.
While Cunningham's claim is technically correct under the government's doctrine of separation of powers, it doesn't reflect the reality that many members of Congress, especially members of appropriations committees, have a great deal of say over how funds are allocated.
A federal grand jury in San Diego is probing Cunningham's dealings with Wade after disclosures that Wade bought and sold Cunningham's Del Mar home at a $700,000 loss and allowed Cunningham to live aboard his yacht in Washington. Wade has since resigned as head of MZM, and the company is in the process of being sold to a New York-based equity firm.
Since receiving its first federal contract in 2002, Washington-based MZM has collected more than $163 million in government contracts.
Cunningham's dealings with another defense contractor – Brent Wilkes, president of Poway-based ADCS Inc. – have also come under scrutiny. On Aug. 16, agents from the FBI, Internal Revenue Service and Defense Department raided the company's headquarters. Agents were seeking records pertaining to government contracts secured by ADCS, particularly deals related to the House defense appropriations subcommittee, according to sources familiar with the investigation.
The raid came seven weeks after a similar raid on MZM.
Like MZM, ADCS won millions of dollars of government contracts while making significant campaign donations to Cunningham and other members of the House defense appropriations subcommittee. The subcommittee repeatedly penciled in funding for projects involving the company, even though the Pentagon had not requested the money.
Cunningham's possible abuse of his clout has opened a window on the congressional appropriations process, giving the public a rare glimpse at the growing premium that contractors place on obtaining influence on Capitol Hill.
Cunningham's seats on the defense appropriations subcommittee and the House Permanent Select Committee on Intelligence give him influence over the kinds of military-intelligence contracts MZM has been seeking, said Nathan Facey, a former aide to Rep. Marcy Kaptur, D-Ohio, a senior member of the House Appropriations Committee.
"It's one-stop shopping," Facey said of Cunningham's potential usefulness to Wade. "He can get an earmark lined up in the intelligence committee, and then he can walk it over to appropriations and say, 'It's classified, so I can't talk about it, but it's a good program.' "
Earmarks are relatively small provisions that members of Congress insert into a bill to fund specific programs that often benefit their districts or supporters. They typically write them cryptically to obscure the lawmaker and the beneficiary.
Wade poured $272,426 into the political process in the past five years, with the help of political action committees, employees and friends, according to data provided by the Center for Responsive Politics. Wilkes orchestrated $499,200 in contributions during the same period, according to the center's data.
"They know the process," Rep. Jeff Flake, R-Ariz., said of contractors. "They come in and say, 'This is what we need, so can you ask for this? Can you write a letter to the appropriators?' It's really pernicious because once you get an earmark in a bill, you're going to support the bill, or your earmark is removed. . . . Members are getting hooked on earmarks quickly. They are led to believe that that is the way you get re-elected."
News accounts contribute to the problem, said Jacques Gansler, former undersecretary of defense for acquisition, technology and logistics.
"The problem with pork is that in the local press it's always viewed as a plus. It's 'Congressman Jones just got us a $20 million project and isn't that wonderful' – even though the executive branch didn't ask for it and it's not necessarily a priority in terms of the nation's interest."
Pork-barreling has always been a feature of the federal budget process, but as the budget has expanded in recent decades, so has the pork. The mounting pressure on lawmakers to raise large sums of money for campaigns has further accelerated the trend. In the past decade, the process has become more ingrained and efficiently managed, and has spread to parts of the budget previously untouched.
In 1998, the 2,000 earmarks in all 13 appropriations bills had an overall value of $10.6 billion, said Keith Ashdown of Taxpayers for Common Sense. By 2004, the numbers had reached 15,584 earmarks worth $32.7 billion.
Rep. Virgil Goode, R-Va., a member of the House Appropriations Committee, has been another target of Wade's political contributions. MZM has given $87,476 to Goode, mostly in the form of individual contributions from employees.
Goode was instrumental in getting funding beginning this year for a new program awarded to MZM – the Foreign Supplier Assessment Center.
The program, created to monitor the participation of foreign companies in U.S. defense programs, is based in Martinsville, Va., which is in Goode's district. When MZM increased its presence there, Goode touted the jobs the move would bring to the rural community in southern Virginia.
Goode grew testy in an interview when asked why he sought the provision even though the Pentagon didn't want it.
"I've probably put in 30 or 35 requests over the last five or six years," he said, including some affecting other agencies. "And the Defense Department hasn't come by on a single one and asked me to put it in."
In March, Wade hosted a fundraiser for Goode at MZM's headquarters. Employees queued up to hand over more than $50,000 in contributions.
"It was just like any other fundraiser," Goode said. "Stuff to eat, stuff to drink. They had hors d'oeuvres. I made a talk about the importance of our military and having them supplied with good information. It was a pro-defense talk."
Asked if he thought Wade intended the contributions as a reward for Goode's support in pushing through the Foreign Supplier Assessment Center over Pentagon objections, Goode said, "I can't read his mind. But my support for MZM stems from the fact that they had a large presence in the district."
Winslow Wheeler, a former Senate staff member and frequent critic of the appropriations process, looks ruefully at the proliferation of pork.
"In the mid-'70s, a defense appropriations bill, conference report and the statement of managers would be 30 pages and the bill 30 pages, so the entire document was about 60 pages," he said. "Each pork item would get about a paragraph and there might be 100 or 150 of those items.
"Today, you're talking about a document that is 200 to 250 pages." You find so many earmarks that "if they did a paragraph on each one, we'd be talking about a real tree killer."
Cunningham's suggestion that he could not significantly influence the outcome of relatively small military-intelligence contracts worth a few million dollars, doesn't square with reality, Wheeler said.
"If he did line-items in committee reports or conference reports for MZM, he understands perfectly well that he required the Department of Defense to do exactly that or there would be hell to pay," Wheeler said.
The kind of payback a spurned lawmaker can deal the military was amply illustrated by former Rep. Charlie Wilson, D-Texas, who used his position on the defense appropriations subcommittee during the 1980s to steer billions of defense dollars covertly to help Afghan fighters dislodge Soviet forces from Afghanistan.
"We would have never won the war if it hadn't been for earmarking because the (CIA) would have never spent the money the way we wanted it to," Wilson said in a recent interview. "There are three branches of the government and you have to explain that to the executive branch every once in a while and earmarking is the best way to do that."
He recalled one such lesson from the 1980s.
Wilson had talked his girlfriend out of a trip to Paris to accompany him to Pakistan. A U.S. spy plane was supposed to fly them from one end of Pakistan to the other.
However, an Air Force colonel working for the Defense Intelligence Agency refused to transport Wilson's girlfriend on the spy plane, saying it was against the rules. Wilson got even with the Defense Intelligence Agency in the next appropriations bill.
"I just removed two planes from their inventory," he said. "The Louisiana National Guard was very glad to get them."
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