Cunningham Stripped $700 Million from U.S. Defense

The MadCowMorningNews has learned that California Republican Congressman Randy ‘Duke’ Cunningham steered $500 million in defense contracts in less than a decade, according to the company’s own website, to a start-up San Diego software firm which—and here’s the beauty part—doubled as a lobbying firm.

The lobbying firm then gratefully kicked back—at a bare minimum—hundreds of thousands of dollars annually to a Jack Abramoff-directed Washington D.C. lobbying and consulting firm run by two former senior staffers of Texas Republican Tom DeLay.

1stop It offered, in other words, one-stop shopping.

While the focus was on the $2 million in bribes paid to Cunningham after his guilty plea, the question of just what the Congressman had done for all that long green received scant media attention.


cornucopiadssThe GOPMOB's Magic Horn of Plenty

But as the extent of the damage to America’s national security wrought by the bribes which crossed Cunningham’s greasy palm begins to come into focus, the fraud being revealed is orders of magnitude greater than has been hinted at so far.

Here’s how it worked:

Money budgeted for U.S. Defense went in at the ADCS end of something called the “Wilkes Corporation” for services which the Pentagon protested it never requested, and out the other end came a magical cornucopia of bribes, kick-backs, campaign contributions, yachts, Lear jets and Rolls Royce’s.

Over the course of almost an entire decade, from 1994 to 2001, Cunningham’s Appropriations Committee repeatedly added funding to the Pentagon budget for a previously non-existent (prior to 1995) software company, ADCS, owned by the “Wilkes Corporation,” a private company (natch) owned by San Diego businessman Brent Wilkes.

The money then made a short trip—courtesy the wonders of modern accounting—from one of Brent Wilkes’ pants pocket to another, called “Group W Advisors,” which proceeded to obligingly send hundreds of thousands of dollars in ‘client fees’ annually to The Alexander Strategy Group, a lobbying and consulting firm currently under scrutiny in the Justice Department's investigation of Casino Jack Abramoff.


"A little trouble keeping the company names straight, is all."

 indexq1Wilkes himself even seems to have had trouble distinguishing between his various legal fictions…

Newspaper reports state his deal grew out of requests from the House National Security Committee, of which Cunningham was then a member, for the military to add an automated-document program to its budget.

His firm ADCS, according to Government Computer News, began by selling $5 million in document conversion software to the Pentagon. But the website of his lobbying firm, Group W Advisors, claims it is the entity "instrumental in introducing (digital document) technology to the Department of Defense,” as well as that the company's document-automation work, which began as a small “congressionally-mandated pilot project," has since generated more than $500 million in appropriations. 

chin2If you're wondering which company deserves the "credit," you may be missing the point.

Picture the memorable scene in the movie “Chinatown” where Fay Dunaway explains to Jack Nicholson what may have been a similarly-complicated state of affairs…

“She’s my sister! (Slap.) She’s my daughter! (Slap.) She’s my sister AND my daughter!”

See, the pea is under one of the shells; it doesn't really matter which.

 bushfellastledxIn its blatant disregard for anything resembling reality, the scheme resembles nothing so much as the blatantly phony Abramoff-sponsored Institutes, Foundations, and political “think tanks” (whose ‘scholars in residence” turn out to be lifeguards and yoga instructors) which were exposed in recent Senate Hearings as vehicles used to move money through the bank accounts of a network of DeLay cronies and former aides.


"Thinking outside the think tank"

Not one to rest when America's national security can be used as a cover for making a buck, Cunningham was also steering Pentagon money to a second tiny “defense contractor,” MZM Inc, which had the great good fortune to go from zero dollars in Federal contracts to $169 million in two short years, through the simple expedient of indulging Cunningham’s taste for expensive yachts and a new $2 million dollar mansion in ritzy Rancho Santa Fe, California, to go with the trophy wife, also on the payroll.

Here's a photo taken of a Washington D.C. bask thrown by MZM Inc to further U.S.-Panama friendship. MZM Inc founder Mitchell Wade is the beefy fellow with the self-satisfied smile. 

mitchell wadeAnd why not? He's dining out on your money.

While the story has its humorous aspects, the money involved is nothing if not serious… A (highly preliminary) total of almost $700 million earmarked for national security going to “defense contractors” which just a few years earlier didn’t exist which provide services the Pentagon didn’t ask for or presumably need.

The companies involved would also share another characteristic as well: they were very very grateful.

The point man on the Group W “account” for the Alexander Strategy Group, which received almost $200,000 of gratitude for "client services," was former DeLay aide Karl Gallant, who apparently made a specialty of stealing money from widows and orphans, having signed Enron Corp. to a $750,000 lobbying contract a few years earlier.

(Maybe he can someday share a cell with Ken Lay. We hope its not in one of those federal tennis camps. Pelican Bay might do nicely.)


"Eschewing the soft sell"

"Buckham and that crew, they were Tom DeLay,” a senior GOP House member, careful to remain anonymous, told Congressional Quarterly Weekly.

“The Alexander lobbyists' sales pitch was, ‘Either you hire me or DeLay is going to screw you,’” said a top Republican lobbyist. "It was not really a soft sell."

Alas for Karl Gallant, his chances of pleading lack of premeditation are dimmed somewhat by his participation way back in 1990 in a Heritage Foundation report entitled, no doubt with tongue place firmly in cheek, “A CONSERVATIVE AGENDA FOR COMPREHENSIVE CAMPAIGN REFORM.”

 RaceTrack(1)We only mention this because we found it so funny: "Defense contractor cum lobbyist" Brent Wilkes was recently appointed by California Governor Arnold Schwarzenegger to the State Race Track Leasing Commission, which oversees thoroughbred racing at Del Mar Race Track near San Diego.

Del Mar of course was where FBI head J. Edgar Hoover used to vacation yearly as the guest of Texas oil man Clint Murchison. A Senate committee discovered in 1955 that 20 per cent of Murchison’s Oil Lease Company was owned by Mob Boss Vito Genovese.

A sordid episode involving Hoover at Del Mar was relayed to author Anthony Summers in “The Secret Life of J Edgar Hoover," by veteran film producer Joe Pasternak.

"He was a homosexual," Pasternak told Summers. "Every year he used to come down to the Del Mar racetrack with a different boy. He was caught in a bathroom by a newspaperman. They made sure he didn't speak. . . Nobody dared say anything because he was so powerful."

La plus ca change.


"Great humanitarians know how to spread it around."

Wilkes is also the proud papa of his very own foundation (de rigueur in certain circles.) The Wilkes Foundation sponsored the second annual San Diego Tribute to Heroes Gala recently, we discovered. It honored the no doubt heroic Congressman  Duncan Hunter, who just happens, as they say, to currently be chairman of the House Armed Services Committee.

For the Congressman's sake, we hope he doesn't dock a yacht anywhere near Duke Cunningham's

We thought he was exaggerating when former Ambassador Wilson wrote in his recent book that the sordid spectacle we have all been forced to witness has been caused by “a small pack of zealots whose dedication has spanned decades, and that through years of selective recruitment has become a government cult with cells in most of the national security system.”

gungadanaGuess what? He's not… 

A news account in the San Diego Union-Tribune about the Lear jet used by Cunningham and DeLay, paid for by you and I from money "passed through" to San Diego "businessman" Wilkes, told of a flight DeLay flew from Dulles Airport in Washington, D.C., to John Wayne Airport in Orange County to appear at a campaign dinner for Rep. Dana Rohrabacher, R-Huntington Beach.

Dana Rohrabacher will appear again (several times) in our story… He gave a sterling personal recommendation, for example, to Adam Kidan, the "dunsky (John Gotti's phrase) about to be indicted for paying for the brutal murder of Sun Cruz Casino Line owner Gus Boulis… with a check.


The original bad penny

Rohrabacher was there when the cult first began to do business as The Enterprise, in Angola, for example, with Jack Abramoff… and Oliver North.

The same group involved in the Cunningham affair will soon be seen to have their fingerprints all over the Boulis hit, as well as a host of recent activities of individuals for whom the noun “baseball bat” is a verb…

As in: "We shoulda baseball-batted him."

Emilia DiSanto is a staffer on Capital Hill working for Senator CharlesbaseballbatGrassley, currently investigating Abramoff. She was attacked with a baseball bat on November 8 by a mysterious masked man trying to hide his identity by wearing a hood and black gloves, who said nothing and made no demands before attacking the 49-year-old staffer. The FBI is investigating it as being “work-related.”

Or FRANK Mosco, a whistleblower whose testimony convicted another figure in the Cunningham scandal, a man named Thomas Kontogiannis, to whom Cunningham sold his yacht at an inflated price, just as he’d sold his house to Mitchell Wade of MZM Inc.

Today Mosco won't leave his home without his bulletproof vest. He started wearing body armor a few months ago after four goons attacked him on a Queens street, bashing him on the head, pummeling him to the ground and throwing him into a van, where he was threatened to "keep [his] mouth shut."

The brazen beating occurred just days after Queens District Attorney Richard Brown issued grand jury subpoenas to targets of a massive kickback and corruption probe which eventually fingered Duke Cunningham.

When Cunningham learned that the prosecutor in the case against Kontogiannis knew of the attack, he wrote telling him that there may be a political agenda against the school official (who he now admits had been paying him bribes) by what he termed a "disgruntled contractor (Mosco.)


A crime spree by the "baseball bat boys"

A short list of recent violent crime suspected of having been committed by Abramoff associates makes for fascinating reading, and we will regale you with it at a later date. But we just wanted to mention it now, in case anyone thinks we may be being too hard on a former war hero who's become a broken man who simply misplaced his moral compass, or as Rush Limbaugh characterized it, "made a mistake."

Locking your keys in your car is "making a mistake."

When the San Diego Union-Tribune detailed charges of Congressman Cunningham’s questionable activates in December 1997, Cunningham told the paper’s reporter that anyone who questioned his actions in lobbying for ADCS could “go to hell.”

After Cunningham's sniveling performance yesterday, its safe to assume he  was still at that point exhibiting the bravado of the not-yet indicted.

Less we forget, most of this happened during a time period in which the U.S. was to war, after 3000 innocent people were murdered in an attack which our nation, which spends more on defense than most of the rest of the world combined, was unable to thwart.

Its a good thing for Cunningham that people seem willing to cut him some slack, because of his service as an ace Navy pilot during the Vietnam War, a decade-long attempt to keep the U.S. West Coast from being invaded by fleets of Viet Cong sampans that somebody must have feared mightily, given the costs of that struggle to our nation.

Otherwise there might be calls for Cunningham to be indicted for treason.

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Daniel Hopsicker

Daniel Hopsicker is an investigative journalist and the author of two books on transnational crime, Welcome to Terrorland and Barry & the Boys.

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  1. September 29, 2016

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