'Duke' Of Deception

This column was written by Laura Rozen.

But in the Cunningham case nothing is quite what it seems. Two months have passed since he pled guilty to taking more bribes than any other legislator in U.S. history, yet no more indictments have been issued, not even against the four people described as "co-conspirators" in the Cunningham plea agreement. No other shoes have dropped — until now.

On January 6, 2006, Time magazine reported that in the days before Cunningham's plea agreement was publicly announced, he had been wearing a concealed recording device. "The identity of those with whom the San Diego congressman met while wearing the wire remains unclear, and is the source of furious — and nervous — speculation by congressional Republicans," Time wrote. To whom had Cunningham led the FBI as part of his cooperation agreement? A recent story in the Los Angeles Times cited Cunningham's attorney, K. Lee Blalack, as saying Cunningham had not recorded any other "public officials," but declined to clarify whether he had recorded others. The implication of the two reports is clear: Prosecutors have further targets in their crosshairs beyond Cunningham. In law enforcement, the standard procedure is for prosecutors to haul in the little fish first in order to net the big fish later. So there was something peculiar about the Cunningham case, where such normal logic had seemingly been turned on its head. Here the big fish — a ranking Representative — had pled guilty before the businessmen from whom he had admitted taking bribes. What the Time report suggests was that Cunningham might not be the biggest fish in this case after all.

The Cunningham case has revealed several lawmakers worthy of investigative scrutiny. Two men described but not named as co-conspirators in the original indictment — Brent Wilkes, the chairman of San Diego-based defense contractor ADCS Inc., and Mitchell J. Wade, the founder and until recently chairman and president of defense and intelligence contractor MZM Inc. — donated "more than a million dollars in the last ten years to a roster of politicians," including contributions from their employees and company political action committees (PACs), according to the Center for Responsive Politics. In some instances, those donations seemed to track closely with appropriations recommendations from politicians that benefited Wilkes' and Wade's companies.

Among the pols of potential interest to investigators is Representative Tom DeLay, whose Texans for a Republican Majority fund-raising committee received a $15,000 donation in September 2002 from Perfect Wave Technologies, a subsidiary of Wilkes' corporate umbrella, the Wilkes Corporation. Through another Wilkes' subsidiary, Perfect Wave also hired a lobbying firm, Alexander Strategy Group, set up by DeLay's former Chief of Staff Ed Buckham, and which employed DeLay's wife Christine, to lobby successfully for Perfect Wave to receive a Navy contract. In December, the Austin, Texas, District Attorney Ronnie Earle — already pursuing a campaign-finance case against DeLay — subpoenaed documents from Wilkes, Perfect Wave Technologies, ADCS, and associated companies. Popping up again on the radar as well is Congressman Bob Ney, the Ohio Republican who, like DeLay, is simultaneously under investigation in the rapidly expanding Indian gaming case that has led to guilty pleas by lobbyist Jack Abramoff and PR Executive Michael Scanlon. On October 1, 2002, Ney inexplicably entered praise of a San Diego-based charity headed by Wilkes, the Tribute to Heroes Foundation, into the Congressional Record — the same kind of service Ney performed for his benefactor Abramoff on more than one occasion.

Extensive reporting published by the San Diego Union-Tribune indicates that several other Republicans in southern California's congressional delegation may have drawn the attention of investigators in the Cunningham case. Among them are Representative Duncan Hunter, identified by a Defense Department Inspector General report — along with Cunningham — as actively intervening with the Pentagon to try to award a contract to a document-conversion company that had given him tens of thousands of dollars in campaign contributions for a program the Pentagon did not request or consider a priority; Representative Jerry Lewis, chairman of the powerful House Appropriations Committee, on which Cunningham sat; and former Congressman-turned-lobbyist Bill Lowery.

As the San Diego Union-Tribune reported in December, "Lewis has green lighted hundreds of millions of dollars in federal projects for clients of … Lowery. Meanwhile, Lowery, the partners at his firm, and their clients have donated 37 percent of the $1.3 million that Lewis' political action committee received in the past six years. … [Lewis and Lowery have] exchanged two key staff members, making their offices so intermingled that they seem to be extensions of each other."

According to the Center for Responsive Politics, Lewis has also accepted more than $60,000 in campaign contributions from Wilkes, Wade, and their companies' PACs over the years — money that he, like several other representatives and senators, announced would be donated to charity on December 6, after Cunningham's guilty plea. But in more significant ways, Lewis' reaction to the bribery revelations has been nothing short of peculiar.

There's little doubt that Cunningham, who sat on the defense appropriations subcommittee, possessed sufficient influence to steer defense contracts to those from whom he has admitted taking bribes. In repeated interviews with The American Prospect, however, the press spokesman for the Appropriations Committee has indicated that Lewis has decided to only "informally" investigate those "programmatic recommendations" made by Cunningham in the past — although Cunningham himself has admitted corrupting the program process. "There is an informal review going on," committee Spokesman John Scofield explained in December. "It's not something we had made a big announcement on."

This casual attitude contrasts starkly with the reaction of Michigan's Peter Hoekstra, the chairman of the House Permanent Select Intelligence Committee (HPSCI), the other committee on which Cunningham sat. Hoekstra has announced a thoroughgoing investigation of any corruption of the Intelligence Committee's work that Cunningham may have perpetrated, complete with a request to the Justice Department for a nonpartisan investigator to be seconded to the committee's probe.

"The chairman [Hoekstra] is very upset by this," said Jamal Ware, a spokesman for the House Intelligence Committee. "He wants to be certain that there was no attempt to do anything wrong to his committee. He honestly believes that given the very sensitive nature of what this committee does, there has to be certainty that there was no attempt to manipulate certain processes or abuse any information."

Hoekstra's spokesman hints at an area of concern that has scarcely been mentioned on Capitol Hill: the devastating counterintelligence questions raised by the Cunningham matter.

Viewed as a corruption case, the Cunningham matter has an arc that suggests the possibility of more high-profile indictments to come. But looked at from a counterintelligence angle, it is even more disturbing. The case is still more worrying if it is turned around, and focused not only on the congressman for sale, but on the defense contractors and foreign-linked financiers who cultivated Cunningham — and potentially other lawmakers — precisely because of their position on the Intelligence and Appropriations Committees.

Cunningham has admitted taking $2.4 million in bribes from two men who sought and received not only U.S. government contracts, but particular types of contracts. They were awarded defense and intelligence contracts, including counterintelligence and counterterrorism programs so sensitive their precise details are confined to those with security clearances. As Cunningham himself bragged in a February 8, 2001, letter to defense contractor executives after he was appointed to the Intelligence Committee, "I feel fortunate to represent the nation's top technological talent in the 'black' world," the Los Angeles Times reported. His letter went on to say that given his new position on the Intelligence Committee, Cunningham "appreciated the opportunity to work with you on key service funding priorities … [and] greater opportunities to work together in support of our national security and intelligence communities."

Some of the contracts awarded to companies whose executives Cunningham has admitted accepting bribes from are both national-security sensitive and highly controversial. Indeed, MZM Inc., the company founded and until recently chaired by Wade, the alleged number-two co-conspirator from the Cunningham plea agreement, has an active contract from the Pentagon's troubling Counterintelligence Field Activity (CIFA) agency to conduct domestic surveillance on Americans, according to The Washington Post's Walter Pincus.

Since Wade's exposure in the Cunningham case and subsequent departure from the company, MZM Inc. has undergone financial restructuring and a name change to Athena Innovative Solutions — which also has a contract from the Pentagon to run something called the Foreign Supplier Assessment Center in Martinsville, Virginia. What does that organization do, exactly? Opened in October 2004, the Foreign Supplier Assessment Center "is meant to check on the ownership of foreign companies that contract with the Defense Department," The Washington Post's Jeffrey Birnbaum reported.

It's worth noting that, according to the Center for Responsive Politics, Wade, MZM Inc., its corporate PAC, and MZM Inc. employees together contributed a total of $94,426 to Virginia Representative Virgil Goode Jr., who slipped the request for the creation of the Foreign Supplier Assessment Center to be run by MZM into the classified portion of a 2003 defense spending bill. (Martinsville happens to be in Goode's district.) He did so despite the fact that, as Birnbaum reported, the center was "not a Pentagon priority and was not requested by the Defense Department." And MZM also has a widely reported contract to provide linguists to Iraq to participate in interrogations of prisoners.

As for Brent Wilkes — the chairman of San Diego-based ADCS Inc., identified in press reports as "co-conspirator #1" in the Cunningham plea agreement — he has been best friends with the third-ranking official at the Central Intelligence Agency since their days on the Hilltop High School football team in Chula Vista, California (as The American Prospect and San Diego Union-Tribune have previously reported).

So close are Wilkes and Kyle Dustin "Dusty" Foggo, the executive director of the CIA, that they named their sons after each other and share a private wine locker at Washington's Capital Grille restaurant. The Prospect has previously reported allegations that a Wilkes-affiliated company called Archer Logistics, headed by Wilkes' nephew and former ADCS employee Joel G. Combs, received a contract from the CIA.

The third alleged co-conspirator in the Cunningham plea agreement, Thomas T. Kontogiannis, a Long Island–based, Greek-born financier and real-estate developer, was picked up in Athens by the private plane flying Cunningham and Calvert to Saudi Arabia in December 2004. Accompanying the group — and paying for the trip — was Ziyad S. Abduljawad, a naturalized American of Saudi origin living in San Diego. Calvert's press spokesman told the Prospect that no staff members went on the trip, during which the congressmen met with "the former Crown Prince, who is now King," as well as several other Saudi ministers and business leaders.

"The purpose [of their trip] was to improve relationships between Saudi Arabia and the U.S.," explained Calvert's spokesman in an e-mail. Such a broad-minded purpose is notable coming from Cunningham, who launched his political career in 1990 by outraging local Arab Americans "with a brochure bearing the picture of Libyan leader Moammar Gadhafi that accused his Egyptian-born opponent of having been influenced by oil interests," as reported by the San Diego Union-Tribune.

As for Kontogiannis, he previously pled guilty to bid rigging in a 2002 case involving a Queens, New York, school district. The New York Post reported that in 1994 Kontogiannis pled guilty to visa fraud, after he and an official from the U.S. embassy in Athens were arrested. His wife's nephew, John T. Michael, is described as co-conspirator number four in the Cunningham plea agreement. Michael officially heads the mortgage company, Coastal Capital Corporation, used to launder the bribes to Cunningham by Wilkes and Wade.

What does all this unappetizing detail mean? It is clear that companies belonging to Wilkes and Wade received a few hundred million dollars in sensitive defense and intelligence contracts. Who is investigating whether such companies should be performing such controversial tasks as conducting domestic surveillance on peace groups for the Defense Department? Who is investigating whether MZM and its successor Athena Innovative Solutions should be evaluating which foreign companies supply weapons to the Pentagon — when MZM may have gotten the initial contract through dubious means?

A close reading of the 33-page Cunningham plea agreement raises troubling questions about the relationships that connect Wilkes, Wade, Kontogiannis, and those whom the Cunningham plea agreement describes as "others." The indictment describes multiple instances when Wilkes and Wade used companies owned by Kontogiannis and his wife's nephew essentially as the banking vehicles to launder bribes to Cunningham through the purchase of real estate, boats, and other valuables. In other words, Wilkes and Wade would seem to have had some degree of knowledge of Kontogiannis being central to the corruption scheme. While we know how companies belonging to Wilkes and Wade benefited from their bribes to Cunningham — with several hundred millions of dollars in sensitive U.S. government contracts — it is still opaque what precisely Kontogiannis got out of the Cunningham arrangement. One is left to wonder what other interests Kontogiannis may have been representing, interests which could have benefited from his favors to Cunningham in ways that have not yet been revealed.

In short, who is investigating the counterintelligence implications of this case to protect against potential breaches of U.S. national security?

Laura Rozen is a Prospect senior correspondent.
By Laura Rozen
Reprinted with permission from The American Prospect, 5 Broad Street, Boston, MA 02109. All rights reserved