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Friday, June 24, 2005 | Rep. Randy “Duke” Cunningham, R-Escondido, denied any wrongdoing Thursday regarding the unlisted sale of his home to “friend” Mitchell Wade, the owner of MZM, Inc., a defense contracting firm.. As reported by Copley News Service, Wade purchased the congressman’s Del Mar Heights home for $1.675 million in 2003 only to turn around nine months later to sell the house for $700,000 less. Since the report, a federal grand jury has launched a study into the transaction and several of Cunningham’s House colleagues have asked for an ethics investigation.
The following statement was released by Cunningham’s office Thursday in response to the controversy surrounding the sale:
“In recent weeks, serious questions have been raised about my conduct in office. First and foremost, I want my constituents to know that I have acted honorably and honestly. I recognize, however, that I showed poor judgment in selling my home in Del Mar to a friend who does business with the government. At the time of the sale, I failed to adequately consider how this transaction might be perceived by others who don’t know me. However, my work in Congress is and has always been directed at programs and policies that I believe are in the best interest of our nation and my constituents. I have always felt a duty to this country and its people – a duty that motivated me to volunteer for the Navy, serve in combat in Viet Nam, and run for office. I would never put the interests of a friend or a contractor above the interests of my country. I trust that the facts will bear out this truth over time.
“Mr. Wade and I have been friends for many years and continue to be friends today. Though I first met Mr. Wade in connection with his work as a defense contractor, Nancy and I came to know Mitch and his wife Christiane personally over the years. My family and I have socialized with the Wades on numerous occasions. The Wades have also occasionally asked Nancy and me to support important charitable causes with which they are affiliated and we have willingly done so. This includes the Sure Foundation, which offers financial assistance to refugee children dislocated by war or civil unrest. Nancy and I have been pleased to assist the Sure Foundation’s important mission with our time, charitable contributions and political support. I want my constituents to know that, despite my personal friendship with Mr. Wade, I gave his company, MZM, no preferential treatment.
“MZM provides highly classified human intelligence support to the U.S. Military. While I am not at liberty to discuss the specifics of MZM’s classified work, I can say that in 2003 MZM was actively seeking space for its operations close to Miramar Marine Corps Air Station. Mr. Wade shared with me that his company hoped to acquire space where he could locate highly secure communications equipment along with quarters for employees visiting from other cities. I informed Mr. Wade that Nancy and I were contemplating selling our home in the Del Mar Heights neighborhood, which is close to Miramar. After learning about the size and location of our property, Mr. Wade advised me that MZM would be interested in purchasing our house. I understood that MZM wanted the property for use as an office and as corporate housing until such time as MZM could locate more secure facilities for its operations at one of the military installations in the San Diego area. However, my understanding was that MZM would retain ownership of the property for use as corporate housing even if Mr. Wade was able to locate a more secure facility for their office operations at Miramar.
“Elizabeth Todd, a realtor with the Willis Allen Company in Del Mar, set the asking price for our home. Ms. Todd and her husband are friends of mine and as a friend, she was kind enough to research the sale prices of similar homes in my neighborhood. Our home in Del Mar Heights was located in a desirable area west of Interstate 5 between the highway and the ocean. It was a large, two-story home measuring 3,826 square feet with 4 bedrooms, 3.5 baths and a limited ocean view from a loft on the top floor. My understanding is that the asking price recommended by Ms. Todd was very close to the average sale price per square foot of other homes sold in my neighborhood in the six months prior to the sale. Based on the information provided by Ms. Todd about comparable sale prices in my area, I thought the asking price was fair and reasonable. When I gave Mr. Wade the asking price, he requested that I provide him with evidence of comparable sales to substantiate the price. I then asked Ms. Todd to send Mr. Wade the information he requested and my understanding is that she did so. After reviewing the information provided by Ms. Todd, Mr. Wade confirmed that he wanted to purchase our home in Del Mar Heights for use by MZM.
“I did not list my home in Del Mar Heights for sale or hire a real estate agent to sell the property because Mr. Wade had already indicated an interest in the property and, like most people selling their own home, I hoped to avoid the additional costs associated with selling a house through a broker. Again, I recognize that I showed poor judgment in not listing the house publicly for sale. I should have given more thought to the perception that it might create.
“Recent press reports have incorrectly suggested that I secured a government contract for Mr. Wade’s company or that I improperly influenced the awarding of contracts to MZM. These reports are simply false. 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. In fact, my understanding is that the Defense Department awarded MZM a contract in May 2002, a full year and half before Mr. Wade purchased my home in Del Mar Heights. I advocated funding of a human intelligence program that was supported by the military, and confirmed with the Defense Department that the program had significant value to military effectiveness. Funding for this program was also supported by the full House Appropriations Committee, both Houses of Congress and the President. In short, I categorically reject any suggestion that I secured a contract for Mr. Wade’s company or that I supported funding of this important human intelligence program because MZM purchased my home in Del Mar Heights.
“Finally, recent news reports have questioned whether it was appropriate for me to live on a boat owned by Mr. Wade while I was working in Washington. It is important to note that I first came to Congress in 1991, and I only began living on Mr. Wade’s boat in roughly April 2004. Mr. Wade and I agreed that, in return for me staying on the boat, I would pay the monthly dock fees and maintenance costs associated with keeping Mr. Wade’s boat at the marina. There was nothing improper about my arrangement with Mr. Wade because I paid these monthly fees and costs in lieu of rent. Based on the records that I have been able to locate to date, I have paid well over $8,000 for the dock fees and well over $5,000 for service and maintenance. My attorneys are collecting the full payment records now and will make them available when they are all gathered.
“I am deeply saddened by this distraction from my regular duties. However, I intend to focus my time and attention on the needs of the people of the 50th district. I ask only that my constituents reserve judgment until any investigation is concluded and I have had the opportunity to defend myself against these false allegations.
“This year will mark the 36th year that I have stood in service to this nation – first as a young man volunteering to join the U.S. Navy at a time of war and great unrest, and more recently as a United States Congressman. I have had many proud moments in my career.
“I am most proud of the work I do for and with the people of my district.
“I continue to lead Congress’ work to dramatically increase federal funding for health and medical research – promoting both our national healthcare needs and the economic health of our local bio-technology industry.
“I work for economic security in San Diego and our vital national security through funding for important defense and homeland security programs that have created and protected jobs for thousands of my San Diego County constituents. And through road, rail and other transportation funding, I work to help get hard-working San Diegans home to their families as quickly as possible every day so they can continue to enjoy all the life that our beautiful region has to offer.
“Perhaps most importantly, I believe the work I am doing with educators and policy makers nationwide to improve education in San Diego and across the country will help lead our children to a better life than their parents enjoy today.
“I have always done this job in the interest of my nation and my constituents. And I want the people of California’s 50th Congressional district to know that my drive to continue this work on their behalf is as strong today as it was when I first ran for Congress 15 years ago. I have always been humbled by the faith that my district has had in my leadership, and I will continue to work to earn their respect and endorsement.”
Rep. Duke Cunningham is the congressman representing the 50th District, which includes several San Diego neighborhoods such as Clairemont Mesa, Mount Soledad, Mira Mesa and Carmel Valley as well as the North County cities of Escondido, Carlsbad and Encinitas. He was elected to his eighth House term in November.