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US: Defense Contractor Admits to Bribes

A defense contractor admitted Friday he paid a California congressman more than $1 million in bribes in exchange for millions more in government contracts in a scandal that prosecutors say reached into the Defense Department.


by Mark ShermanAssociated Press
February 24th, 2006

A defense contractor admitted Friday he paid a California congressman more than $1 million in bribes in exchange for millions more in government contracts in a scandal that prosecutors say reached into the Defense Department.

Mitchell Wade pleaded guilty in U.S. District Court to conspiring with former Rep. Randy "Duke" Cunningham to bribe the Republican lawmaker with cash, cars and antiques over four years, and to help him evade millions of dollars in tax liability.

The payments helped bring MZM Inc. of Washington, which Wade started in 1993, more than $150 million in government contracts since 2002.

"I take full responsibility for my actions," Wade told Judge Ricardo Urbina after entering his plea to four corruption charges that carry a maximum prison sentence of 20 years.

Cunningham quit Congress last year after he pleaded guilty to taking bribes from Wade and others.

Wade, MZM's former president, also admitted making nearly $80,000 in illegal campaign contributions in the names of MZM employees and their spouses to two other members of Congress, identifiable from Federal Election Commission records as Rep. Virgil Goode, R-Va., and Rep. Katherine Harris, R-Fla.

"Wade targeted these two members of Congress because he believed that they had the ability to request appropriations funding that would benefit MZM," U.S. Attorney Kenneth Wainstein of Washington said at a news conference following Wade's plea hearing.

The lawmakers apparently were unaware the donations were illegal, prosecutors said. Goode and Harris have said they would donate campaign funds to charity in the amount of contributions they received from MZM.

Wade also admitted his role in a second, separate conspiracy in which he did favors for a Defense Department official, including hiring his son at MZM, and other employees in return for their help in awarding contracts to his company.

The Pentagon employees were not named in court filings, but The Washington Post has identified the official as William S. Rich Jr., who until 2003 was executive director of the Army's National Ground Intelligence Center in Charlottesville, Va. Rich was later hired by MZM.

Wade has been cooperating with federal prosecutors in Washington and San Diego since last summer and is required to continue to do so as part of his plea agreement with the government, federal prosecutor Howard Sklamberg told the judge.

Wade is one of four coconspirators in the plea agreement and sentencing memorandum for Cunningham. The coconspirators are not named in court papers, but they have been identified elsewhere.

Among Wade's gifts to Cunningham was the purchase of the congressman's California home for a price inflated by $700,000. Cunningham, 64, used the money to move into a $2.55 million, seven-bath mansion in the exclusive San Diego County community of Rancho Santa Fe.

A bribe of a $140,000 in the form of a 42-foot yacht, the Duke-Stir, brought Wade an offer of $16 million in contracts, according to Cunningham's sentencing memorandum, which calls for a 10-year prison term.

Wade bought Cunningham $190,000 in antiques over two years from one store alone, records show. Cunningham used the antiques "to feather his nest in San Diego," prosecutors said.

The former "Top Gun" flight instructor and Vietnam War flying ace is scheduled to be sentenced March 3 in U.S. District Court in San Diego.

Besides Wade, the three other coconspirators are: Brent Wilkes, founder of San Diego-based ADCS Inc.; New York businessman Thomas Kontogiannis; and John T. Michael, Kontogiannis' nephew.





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