Bribery in the Beltway

 
 
By Baselinemag  |  Posted 2007-04-02
 
 
 

A year after U.S. Congressman Randall "Duke" Cunningham was sentenced to prison in one the biggest federal information-technology scandals ever, details about the case continue to emerge.

Story Guide:

  • A Shroud of Corruption
  • A High Stakes Game
  • Outsourcing the Government
  • Pay to Play
  • The Money Trail
  • Enter Mitchell Wade
  • Busted
  • Another Chapter?

    Also in this Package:

  • Beltway Insiders
  • Public and Private Sector: The Revolving Door

    Next page: A Shroud of Corruption


    A Shroud of Corruption

    On March 3, 2006, Randall "Duke" Cunningham was sentenced to eight years and four months in federal prison. Cunningham, who in March 2005 resigned in disgrace from Congress, had admitted taking at least $2.4 million in bribes from information-technology contractors in exchange for helping them secure hundreds of millions of dollars in contracts from the Pentagon and the intelligence community.

    The case received enormous publicity. A Navy flying ace during the Vietnam War, Cunningham had demanded and received expensive gifts, a yacht, a Rolls-Royce, the services of prostitutes and even had one of the contractors foot

    The bill for his daughter's graduation party, according to charges filed in the U.S. District Court, Southern District of California. Cunningham had taken payoffs on a scale that is unprecedented in the history of Congress. "In the sheer dollar amount, he is the most corrupt [in the history of Congress]," Deputy House Historian Fred W. Beuttler told CBS News at the time of his sentencing.

    One year later, the case has seemingly run its course. Cunningham is in prison. And, of the two contractors the government says bought Cunningham's influence, one, Mitchell J. Wade, chief executive officer of Washington, D.C., high-tech company MZM, pleaded guilty in February 2006 to conspiring to bribe Cunningham, among other charges; the other, Brent Roger Wilkes, president of ADCS, a Poway, Calif., data conversion and information management company, was indicted on Feb. 13, 2007, for bribing Cunningham. Wilkes issued a statement through his lawyer saying he is innocent of the charge.

    But in recent months, it has become clear that the information-technology scandal that rocked Washington may be more far-reaching than had been initially recognized. The names of other members of Congress, along with a senior Defense Department official, have surfaced in relation to the case, at the heart of which are government charges that Cunningham and co-conspirators caused hundreds of millions of dollars in defense and intelligence I.T. contracts — a number of them involving national security — to be awarded to companies that in many instances, the government claims, weren't the best qualified for the job.

    What is perhaps most alarming about this story, however, is the window it provides into the kind of corruption that can develop in an environment where projects are often funded through "black budgets"; the number of vendor choices is shrinking; accountability is minimal or nonexistent; and buying decisions can be driven by cronyism, massive campaign contributions — some of them illegal — influence peddling and pork barrel politics.

    "I think that the Cunningham example is unique because of how deeply entrenched MZM was with a member of Congress," says Scott Amey, general counsel of the Washington, D.C.-based Project on Government Oversight (POGO), "but overall it does highlight the cozy relationship that many contractors have with members of Congress, senior government officials and the executive branch."

    "This case raises a lot of issues about the conduct of a lot of people who hold high office," adds Scott Lilly, senior fellow at the Center for American Progress, a progressive Washington think tank, and a longtime congressional staffer.

    Next page: A High Stakes Game

    High Stakes

    To grasp how a scandal of this magnitude could have occurred — and gone undetected for almost 10 years — you have to understand how the defense and intelligence market works, the companies and the competition, and the size of the contracts involved.

    Of course, what drives the market in the post-Sept. 11 world is money, lots and lots of it. In the wake of the terrorist attacks on New York and Washington, D.C., the Bush administration has substantially boosted spending on Pentagon and intelligence systems. According to Input, an independent federal government market research firm, the Department of Defense's spending on information-technology services and solutions is expected to increase from $31.5 billion in federal fiscal year 2005 to $36.4 billion in federal fiscal year 2010. While spending on intelligence-related activities by the federal government remains highly classified, Input estimates that total addressable information-technology spending for U.S. intelligence agencies in federal fiscal year 2005 was $10.9 billion. Input projects that will jump to approximately $13.6 billion by fiscal year 2011.

    In addition, according to Input, the so-called Intelligence Community Management Account (ICMA) has been given $580 million in discretionary budget authority in fiscal 2007, almost three times what it had in fiscal 2006. These funds are earmarked to pay for the infrastructure and personnel required to support the newly created Director of National Intelligence and implementation of the Intelligence Reform and Terrorism Prevention Act of 2004, which President Bush has said will make the country's "vast intelligence enterprise ... more unified, coordinated and effective."

    According to John Slye, a senior analyst with Input, much of the Defense Department spending is earmarked for what the market research firm calls "warfighting" systems and so-called Network Centric Warfare Systems. The latter utilize information technology via real-time networks to allow increased information sharing, collaboration and shared situational awareness. The hoped-for end result: greater self-synchronization, speed of command and mission effectiveness by the military.

    To implement these initiatives, the Defense Department will spend almost $9 billion in 2007 on tactical data links, combat support systems and information processing systems, according to Input. Another $14.2 billion is slotted for leased communications lines, computers, servers and networks, and an information warehouse, according to Input. The remainder of the budget is to be spent on business systems, computer security, and program office support and CIO executive support. "The DOD has changed from an emphasis on ships, guns, and tanks and planes to a focus on information knowledge and timely, actionable intelligence," Input noted in one of its recent reports.

    Based on Securities and Exchange Commission filings by a number of vendors that deal with the intelligence community — including ManTech International and L-3 Communications — the CIA and other intelligence agencies, including the National Security Agency (NSA), the Defense Intelligence Agency (DIA) and the National Reconnaissance Office (NRO), are increasing their demand for data and text-mining solutions to enable them to extract, analyze and present data gathered from the massive volumes of information available through open sources such as the Internet. This increased focus on national security, homeland security and intelligence has also reinforced the need for interoperability among the many disparate information-technology systems throughout the federal government, specifically for enterprise systems that enable better coordination and communication within and among agencies and departments.

    Intelligence agencies are also adding secure and non-secure voice, data and video communication for office, battlefield and other network applications as well as intelligence data collection, surveillance and reconnaissance.

    The spending on classified, or "black box," systems and services attracts a variety of vendors, many of which, like MZM, started out small and quickly fattened. Among them: CACI International, SRA International, ManTech International and L-3 Communications.

    But these days, defense and intelligence are relying increasingly on big integrators like EDS, Raytheon, Computer Sciences Corp. and Science Applications International Corp. (SAIC), as well as divisions of large defense contractors such as General Dynamics, Lockheed Martin and Northrop Grumman, and consulting firms such as Accenture and BearingPoint.

    There has also been consolidation in this market, according to Input's Slye. As an example, L-3 Communications merged in 2005 with San Diego-based defense contractor Titan in a $2.65 billion, all-cash deal. "Titan was a major player in this market," Slye says. That same year, ManTech acquired Gray Hawk Systems, which provides critical infrastructure protection, counter-intelligence/counter-terrorism mission support, information processing and warfare systems engineering. In announcing the acquisition, ManTech stressed that more than 90% of Gray Hawk's 500 employees had security clearance and 70% had high-level clearance, a key asset in dealing with mission-critical national security programs.

    CACI acquired the defense and intelligence divisions of American Management Systems for $415 million earlier this year.

    "The danger of these consolidations," says POGO general counsel Amey, "is that ultimately the government is going to have less and less choice when it comes to selecting vendors." That, of course, would mean that the remaining contractors would have increasing leverage in dealings with the feds. "The procurements have gotten bigger and bigger," Slye says. "The scope of the systems is so huge that the intelligence agencies are using integrators not only to implement them but to act as program managers."

    Next page: Outsourcing the Government

    Outsourcing the Government

    Today, the intelligence community and the Defense Department are also relying increasingly on the vendor community to oversee their own projects, according to Input. This is due in large part to both the Bush and Clinton administrations' decisions to downsize, privatize and outsource more and more government functions.

    Consequently, there's a dearth of I.T. talent and experienced people on the federal payroll. The National Academy of Public Administration estimates that approximately 50% of the federal government information-technology workforce is near eligibility to retire, and that there will be a shortage of technically skilled replacements.

    The CIA in its heyday had a Directorate of Science and Technology (DS&T) that was, says former CIA senior analyst Melvin Goodman, comprised of the "strongest technical team in the history of the intelligence community." Its accomplishments were the stuff of legend: Its surveillance systems ensured that Russia never procured a strategic weapons system that had not been monitored by the CIA in its deployment, resting or even developmental stage, Goodman says. It pioneered data mining and retrieval systems, developed microwave technology that increased the speed of computers, and developed a system to project so-called ghost aircraft on enemy radar, he says.

    But in recent years, the storied DS&T has fallen on hard times, according to Goodman, losing many of its resources and top people. "The Pentagon was never in favor of the CIA," says Goodman, who notes that the military has now taken control of all technical collection systems while former CIA director George Tenet appointed a non-scientist to the post of deputy director for the DS&T in 2001. This, Goodman claims, further demoralized scientists and technicians in the intelligence community. At presstime, the CIA had not responded to Baseline calls about DS&T.

    But it's not just the loss of people. It's also the loss of key skills. More specifically, there's a growing shortage of experienced procurement and acquisition officers in the government. According to a December 2006 report by the congressionally appointed Acquisition Advisory Panel, made up of experts in acquisition law and government acquisition policy, "Since the mid-1990s, the federal acquisition workforce has been reduced by 50%, and hiring virtually ceased, creating what has been termed the Ôbathtub effect,' a severe shortage of procurement professionals with between five and 15 years of experience and the knowledge to serve as a watchdog for potential problems. The impact of these events has left its mark on government operations, creating a shortage of certain capabilities and expertise in government ranks."

    The upshot: an increasing reliance on technology service providers and a diminishing capacity to evaluate technology vendors and their offerings, supervise their performance, and hold them accountable for delivering on time and within budget. That, say Amey and other government watchdogs, leaves the doors wide open to the kind of contracting abuses that occurred in conjunction with the Duke Cunningham scandal.

    The damage that government downsizing can cause is perhaps underscored most vividly at the General Services Administration (GSA), the federal government's acquisition agency, which evaluates contractors and has the authority to suspend a contractor from government work if the company is pursuing illegal or unethical practices. By December 2005, when the Cunningham scandal broke, the entire staff of GSA's so-called Supervision and Disbarment function had either been transferred or had retired, a source close to the agency says. The Supervision and Disbarment function has subsequently staffed up, but in 2005 the GSA didn't have the resources to go after the contractors that were dealing with Cunningham. The GSA, when contacted by Baseline, had no official comment.

    Next page: Pay to Play

    Pay to Play

    For 20 years Steve Charles, the executive VP and co-founder of the ImmixGroup, a provider of enterprise technology and services in the government market, representing more than 150 I.T. vendors, has been helping technology companies sell to the government. Charles says that what really matters in selling to the feds is the ability of the would-be contractor to come up with an application or service that's effective in the public sector. "The other stuff — campaign contributions, who you know — they don't really matter at all," Charles says.

    Ideally, perhaps, but there is a virtual revolving door between government contractors and government agencies. Virtually all of the I.T. contractors selling their wares to Defense and the various intelligence agencies contribute heavily to political campaigns, especially if the candidates they're backing are in a position to help them get business.

    All of which is entirely legal — as long as it is documented and the contributions are reported.

    In 2006, defense contractors contributed $16,308,831 to various candidates, 37% to Democrats and 61% to Republicans, according to the Center for Responsive Politics (CRP), a nonpartisan, nonprofit research group based in Washington that tracks money in politics and its effect on elections and public policy. "Most defense-sector contributions are concentrated on members of the House and Senate Appropriations Defense subcommittees, which allocate federal defense money, and the Armed Service committees, which influence military policy," CRP notes on its Web site. "Contributions as a whole favor Republicans, but many of the top contributors within the sector give to both parties fairly evenly, a reflection of the fact that it is important to have friends in high places in both parties when competing for federal contracts."

    Typically, the integrators and I.T. solutions providers doing classified business have in-house lobbyists. Their donations are also often channeled legally through outside lobbying firms — or "stealth rainmakers," as they're sometimes called — that specialize in, or focus heavily on, defense contractors. These include the PMA Group, American Defense International (ADI), and Copeland Lowery Jacquez Denton & White. The largest of these firms, PMA, represents dozens of defense contractors including L-3, CACI and DRS Technologies.

    L-3, a self-described "leading provider of comprehensive information and communications products, solutions and services for National Security, the Department of Defense, intelligence agencies and other government customers," gave $360,000 through PMA in 2006. In total, it contributed $600,465, according to CRP.

    Meanwhile, DRS, a supplier of integrated products, services and support to military forces, intelligence agencies and prime contractors worldwide, chipped in $480,000; CACI, an information systems and high technology services company that sells to the Defense Department and the intelligence agencies, doled out $80,000, CRP says.

    The payback from these lobbying efforts can be enormous. Between 1998 and 2004, the 41 defense contractors that paid fees to PMA collectively won $266 billion in contracts from the Pentagon, according to CRP. That amounts to almost 30% of the dollar value of all contracts awarded by the Department of Defense. Moreover, of this amount, $167 billion — nearly two out of three dollars — was received from contracts that were awarded without "full and open" competition. In fact, PMA clients account for 47% of all such non-competitive contracts — contracts in which the government negotiates with a single contractor — handed out by the Pentagon since 1998.

    SAIC, which provides everything from geospatial information and signals intelligence to data mining software and visualization tools to the intelligence community on a mostly classified basis, has its own political action committee (PAC). The SAIC Voluntary Political Action Committee contributed $170,000 to Democrats and $226,750 to Republicans in 2006.

    These numbers are dwarfed by contributions from the big integrators. Lockheed Martin, whose Integrated Systems & Solutions (IS&S) division's products are utilized by Defense and various intelligence agencies, contributed more than $2 million in 2006, according to CRP. At $1.4 million, General Dynamics, whose Intelligence Solutions (IS) group is a worldwide developer and integrator of mission solutions for U.S. national intelligence interests and selected foreign intelligence communities, wasn't too far behind, according to CRP.

    In 2004, the year before he was apprehended, Randy Cunningham was legally taking in campaign contributions as fast as he could count them. Lockheed and Titan, now part of L-3, each put $15,000 into his campaign kitty. Peregrine Semiconductor, which manufacturers semiconductors used in military satellites, came in with $14,500; Cubic Corp., which provides realistic live combat training systems for military forces as well as virtual training systems, constructive simulation support, force modernization, battle command training and education, and engineering and technical support, donated $12,000. Northrop Grumman, Raytheon, SAIC, L-3, defense and aerospace contractor Alliant Techsystems and United Defense each gave Cunningham between $9,400 and $10,000, according to CRP.

    Of course, says Larry Noble, an independent ethics expert for CRP, there's nothing illegal about defense contractors making campaign contributions as long as they remain within the legal limits. And there's nothing illegal about buddying up to government officials who will listen to their sales pitch. The difficulties occur when the acquisition process is short-circuited, and when contractors and government officials conspire to circumvent the rules to benefit themselves.

    That, of course, was what happened in the Cunningham case.

    Next page: The Money Trail

    The Money Trail

    In 1995, San Diego businessman Brent Roger Wilkes started ADCS (an acronym for Automated Document Conversion Systems), a systems integrator and software vendor specializing in solutions for information transformation.

    Soon after, Wilkes began making friends with some powerful people in government and passing out campaign contributions like, well, campaign buttons. One of the recipients was Rep. Duncan Hunter, a San Diego Republican who then chaired the House Armed Services Committee. (He is currently a ranking member.) Wilkes and his associates gave Hunter, a Vietnam veteran like Cunningham, $40,700 in campaign contributions, according to a story in USA Today. With various business associates, Wilkes also doled out $88,252 in campaign contributions from 1993 to 2005 to another California Republican, House Appropriations Committee Chairman Jerry Lewis, according to the Federal Elections Commission. Additionally, Wilkes served as a "Pioneer" for George Bush's 2000 presidential campaign, meaning he collected more than $100,000 in contributions for the president.

    Nothing improper has been suggested with the contributions. Both Hunter and Lewis are said to have donated their money to charity.

    According to the Justice Department, Wilkes, around 1996, began aggressively courting Duke Cunningham, then a member of the House of Representatives from California's 50th Congressional District, which covers part of north coastal San Diego County. Cunningham, elected to the House in 1991, was well positioned to help his fellow Californian open doors in the Pentagon, having at various times served as a member of the Appropriations and Intelligence committees, and chaired the House Intelligence Subcommittee on Human Intelligence Analysis and Counterintelligence during the 109th Congress.

    To win over Cunningham, the Justice Department claims, Wilkes plied the congressman with thousands of dollars in meals at Washington's Capital Grille, The Palm, Ozios and numerous other restaurants. Duke liked to eat well and travel first class. Wilkes hired Shirlington Limo to drive Duke around town and directed an ADCS employee to purchase a fiberglass-hulled Sea Doo Speedster boat costing $11,225 for Cunningham, according to the Justice Department.

    Concurrently, the Justice Department charges, Cunningham began to pressure the Pentagon to provide ADCS with work. In late September 1996, Cunningham informed the Deputy Under Secretary of Defense (Logistics) that he wanted a Defense Department document conversion program funded, according to the Justice Department. This initially was a $5 million program to digitize Pentagon documents and engineering drawings. Soon after, Wilkes got a $1 million Pentagon contract in 1997, which Cunningham proclaimed "an asset" to San Diego in a full-page newspaper ad in the San Diego Union-Tribune, according to the newspaper.

    Subsequently, ADCS won several contracts to work on the Facilities, Infrastructure and Engineering System (FIRES), a computer program to collect blueprints of facilities worldwide to create an intelligence database; it was initially operated out of the National Ground Intelligence Center (NGIC), a support facility for the Army, and later the Joint Counterintelligence Assessment Group (JCAG), a Defense Department component. On or about May 21, 1998, Cunningham wrote to the chairman of the House Appropriations Subcommittee on National Security, requesting $64 million for digital conversion, about $10 million of which went to ADCS, according to Justice.

    When the ADCS's qualifications were questioned by rival vendors, such as software provider Audre, in an article in the San Diego Union-Tribune, the combative Republican claimed he believed flat-out that ADCS had the best software available. Anyone saying otherwise, he bristled, "can go to hell," the Union-Tribune reported.

    After a report from the Pentagon's Inspector General came out stating that "little demand exists" for automated data conversion systems, Cunningham warned that the Republic of China might try to take over the Panama Canal once U.S. forces left in 1999. If that happened, Cunningham argued, it would be vital to have digitized blueprints of public buildings, the Union-Tribune reported.

    In addition to the 1997 Pentagon contract, in 1999 ADCS was awarded another $9.7 million contract to convert documents related to the Panama Canal Zone, according to the Copley News Service. Subsequently, the company began collecting more than $20 million a year in defense business.

    Cunningham not only used his influence to get much of this work, the Justice Department says, but he helped Wilkes collect funds when the Pentagon was tardy in paying. In April 2001, he tried to get a Deputy Assistant Secretary of Defense fired for not awarding to ADCS all the funds appropriated to the NGIC FIRES program.

    With the backing of Cunningham and some of his other friends in Congress, Wilkes, who used to boast he had ties to the CIA, according to several published accounts, didn't hesitate to throw his weight around. He even went so far as to threaten a FIRES program manager in Panama on March 1, 1999, warning him "that people disappear in Panama all the time and never make it back home," according to the Justice Department.

    When Wilkes didn't get the results he wanted, Cunningham is said to have had his back. On or about Nov. 18, 1998, Wilkes threatened Defense's Document Conversion Program manager with congressional reprisal if he did not allocate sufficient funding to ADCS projects and immediately pay all outstanding ADCS invoices, even when it could not be verified that the work had been done, the Justice Department charges. The following day, Cunningham called the manager, urging him to pay all ADCS invoices.

    And Cunningham wasn't hesitant to bully high-level government officials when Wilkes' interests were on the line. On March 23, 2000, during a hearing held by the House Appropriations Committee on Defense, he angrily confronted Secretary of the Army Louis Caldera, according to the Justice Department. Cunningham was concerned that the Defense Department had not yet released $4 million in funds that were slated to go to ADCS. ADCS soon had its money.

    In a 2001 letter to Wilkes, Cunningham wrote, "I feel fortunate to represent the nation's top technology talent in the Ôblack' world," referring to classified government programs. Wilkes likely felt even more fortunate. Between 1996 and 2005, ADCS, thanks largely to Cunningham, the Justice Department charges, received at least $80 million in federal contracts.

    Next page: Enter Mitchell Wade

    Enter Mitchell Wade

    Even though it was relatively late getting on the gravy train, MZM, a high-tech national security outfit headed up by Mitchell Wade, did even better. It collected in excess of $163 million between 2002 and 2005, thanks largely to Cunningham and other political leaders Wade supported.

    MZM was a small-time Pentagon consulting firm in 2002 when Cunningham began using his considerable clout on its behalf. By 2005, the publication Washington Technology ranked MZM among the top 100 Federal Prime Contractors by revenue. The company listed its revenue as $66,181,872, but declined to list its major customers or projects, which were classified.

    Shortly after Sept. 11, MZM began to experience an influx of government contracts, the Justice Department charges. It expanded its counter-intelligence and national security efforts and opened a computer center in Charlottesville, Va., to develop classified engineering intelligence in a digital mapping and architecture analysis system for the Pentagon. In September 2003, MZM and 16 other contractors received a five-year, $252 million contract to provide engineering and information warfare services to the Air Force. It was brought in to work at the NGIC, the Army support facility; and Global Infrastructure Data Capture, a program to convert government documents into a digital format.

    Some of these contracts were highly sensitive and critical in protecting the country in the post-Sept. 11 world. As an example, MZM participated in a top-secret program created in 2002 by the Pentagon called Counterintelligence Field Activity (CIFA), according to Knight Ridder. Its mission is to develop and manage Defense Department counter-intelligence programs and functions that support the protection of the department, including counter-intelligence support to protect Defense personnel, resources, critical information, R&D programs, technology, critical infrastructure, economic security and U.S. interests against foreign influence.

    Despite a seeming lack of experience in counter-intelligence work, MZM got a piece of this program early on. Business was booming. Mitchell Wade told the Richmond Times Dispatch that the company was projecting a 35% growth rate from 2003 and planned to hire 230 new employees over the next few years.

    In large part, MZM's surging revenue had to do with Duke Cunningham. The government believes that Cunningham began taking bribes from both Wilkes and Wade as early as 2000, but in the wake of the attacks on the Pentagon and the World Trade Center, these payments accelerated, according to charges filed in the U.S. District Court for the District of Columbia. In some instances, these bribes came in the form of rare antiques — three nightstands, one leaded-glass cabinet and four armoires for which Wade paid $12,000 and had delivered. Though the "top-gun" former fighter pilot didn't seem the type to collect antiques, Wade spent another $14,000 on a Louis Philippe commode, circa 1850, and a Restoration period commode plus a sleigh bed in early 2002.

    Beginning in April 2002, the Justice Department charges, Wade upped the stakes significantly, buying Cunningham a vintage Rolls-Royce for $13,500 (unfortunately for Wade, the car proved a lemon and he had to shell out another $17,889.96 to have it repaired), and a yacht for $140,000 called the "Buoy Toy." When Cunningham wanted to unload his house in Del Mar, Calif., in November 2003, Wade purchased it for just under $1.7 million. Eight months later, Wade sold the place, taking a $700,000 loss. Soon after, he sent an additional payoff, a check to Cunningham's company, Top Gun Enterprises, which sold memorabilia from Duke's heroic piloting days, for $115,000. In May 2004, Wade even shelled out $2,081.30, using his corporate American Express card, according to the Justice Department, to pay for Cunningham's daughter's graduation party at a Washington hotel. The money kept on flowing while the funds went unreported to the government or the IRS, and were often laundered through shell companies including Top Gun Enterprises.

    For Wade and Wilkes, who partnered on several Pentagon defense contracts, the government charges, the ROI on their investments was substantial. At one point during one of their extended lunches, Cunningham wanted to remind Wade of his worth. He produced a napkin and in one column jotted down the ten of thousands in bribes Wade had given him. On the other side, Cunningham listed the tens of millions in contracts he'd helped MZM win, the Justice Department charges. He made his point.

    The government charges that Cunningham made recommendations and took other action to "influence the Congress's appropriations of funds to benefit Wade, other co-conspirators and MZM." It also charges that Cunningham "used his public office and took other official action to pressure and influence Department of Defense personnel to award and execute government contracts in a manner that would benefit Wade, other co-conspirators and MZM." Cunningham acted, the Department of Justice charges, because of the payments and benefits he received, and "not because Cunningham believed that using MZM was in the best interest of the country."

    Next page: Busted

    Busted

    For almost 10 years, Cunningham and his friends in the contracting world operated with impunity, but on June 12, 2005, their conspiracy began to unravel after the Copley News Service and the San Diego Union-Tribune revealed that Wade took the $700,000 loss on the purchase of the congressman's Del Mar house.

    As the result of the ensuing investigations, Cunningham pleaded guilty on Nov. 28, 2005, to two counts: conspiracy to commit crimes against the United States (including fraud and bribery) and tax evasion. Prosecutor Phillip Halpern said at the time that every "worthless" contract Cunningham got for his cronies came at the expense of other programs that could have helped the country during war.

    On March 3, 2006, Cunningham was sentenced to eight years and four months incarceration out of a possible 10-year sentence. It is the longest sentence ever meted out to a member of Congress. Duke was immediately taken into custody.

    Wade pleaded guilty on Feb. 24, 2006, in the U.S. District Court for the District of Columbia, to conspiring both to bribe Cunningham and to tax evasion; use of interstate facilities to promote bribery; conspiring to deprive the Defense Department of the honest services of its employees; and election fraud. Wade is said to be cooperating with federal investigators and faces up to 11 years and three months incarceration. MZM was sold to an investment firm, Veritas Capital, in August 2005 and now operates as Athena Innovative Solutions. The company says it has taken on some of MZM's old work.

    Brent Wilkes was indicted on Feb. 13, 2007, by the U.S. District Court, Southern District of California, and will be tried sometime in the near future. He could not be reached, and his attorney did not return phone calls. However, two days after he was indicted, he sent out a news releases through his attorneys, Geragos & Geragos, saying that he "never bribed Cunningham or anyone else … I guarantee you, I will be vindicated."

    His company, ADCS, no longer exists.

    Next page: Another Chapter??">

    Another Chapter?

    A week before Duke Cunningham was sentenced to prison, he told the court that a number of other lawmakers had also helped arrange funding for the defense contractors who bribed him, according to a report in the San Diego Union-Tribune and other media outlets. These include Reps. Katherine Harris of Florida, Virgil Goode of Virginia and John Doolittle from California. In court, Wade also admitted trying to curry favor with Harris and Goode, according to the Justice Department.

    None of the three has since been charged with criminal wrongdoing. And all maintain they have done nothing wrong. However, some of their actions have caused concerns among government watchdogs such as attorney Stanley Zubel, who heads Californians for a Cleaner Government. On learning that Wilkes gave Doolittle $118,000 in legal campaign funds, and Doolittle in turn helped get Wilkes at least $37 million in business, according to the San Diego Union-Tribune, Zubel expressed concern about the relationship, especially since Doolittle's wife personally received at least $14,400 of these campaign funds. As Doolittle's campaign consultant, she receives a 15% commission on all contributions.

    Neither Doolittle nor his spouse has commented on this matter.

    In early 2005, Wade contacted Harris and, according to the Orlando Sentinel, took her to a $2,800 dinner at Citronelle, one of Washington's priciest restaurants. (Members of Congress are prohibited from accepting meals valued at more than $50.) As Florida's Secretary of State, you'll recall, Harris oversaw the recount that gave George Bush the White House. She had since become a rising star in the Republican Party, and by 2005 was preparing to make a run for the U.S. Senate.

    Over dinner and the $800 bottles of Bordeaux that Wade favored, the MZM owner told Harris he'd back her with campaign contributions and even host and pay for a fund-raiser when the time came, according to the Orlando Sentinel. There was also talk that MZM would establish a facility in her district in Florida. In return, Wade wanted Harris to push through a $10 million appropriations request. Despite objections from former members of her congressional staff, who noted that MZM had missed the deadline for submitting, Harris instructed them to forward the request, they later told FBI and Defense Department investigators who were looking into the Wade allegations.

    At this point, MZM money began pouring into Harris's campaign, some $50,000, making MZM her biggest contributor. Problem was that all but $12,000 of these funds were illegal, so-called straw contributions, the Justice Department charged as part of its investigation into MZM. In a March 4, 2005, meeting in MZM's office, Wade had given MZM employees cash, $2,000 each, which is the maximum contribution allowed from any one individual under federal law, according to the Justice Department. The employees in turn wrote checks for contributions of the same amount in their names or their spouse's. Wade then personally handed over the checks to Harris.

    Wade allegedly did the same thing with Virgil Goode, giving him $90,000, says the Justice Department. In turn, Goode supported MZM's efforts to get contracts in Congress, and brought an MZM facility to Martinsville, W.Va., winning the company unusually generous financial perks, including $500,000 in state economic incentive grants, according to the Roanoke Times. Most of MZM's contributions to Goode, like those to Harris, Justice later found in the course of the MZM investigation, were illegal.

    Harris and Goode claim they did not know that portions of MZM's funds were illegal. Both have strongly denied any wrongdoing. Harris has donated the cost of the dinner with Wade to charity.

    Today, there are still a number of questions about the scandal, including Wade's enlistment of an unnamed Department of Defense official and Defense employees, "to knowingly conspire, confederate and agree … to defraud DOD," the U.S. District Court for the District of Columbia charges.

    At this juncture, however, it is unlikely that any further legal action will be taken. Just two days after she announced the indictment of Wilkes, U.S. Attorney Carol Lam, who oversaw the Cunningham probe, was fired, along with seven other U.S. attorneys, by the Justice Department. A number of her critics, including Rep. Darrell Issa, a Vista, Calif., Republican, said that Lam should have done more to pursue border crimes and focused less on white-collar malfeasance. Lam has declined all requests for interviews.

    If Lam had been allowed to stay on, however, some government watchdogs believe further investigation would have been put on hold. "I think that even if Lam had remained as U.S. Attorney, the investigation would have reached a point where difficult questions about scope and resources would have had to have been addressed," says Scott Lilly. "[The] Justice Department is not likely to be rushing to ensure that the resources necessary to answer those questions will be forthcoming. In fact, Congressman Issa's insistence and the DOJ's apparent concurrence that more should be spent on illegal immigration and gun crimes has a clear corollary, that less be spent on public corruption. As a result, questions that might have been answered under the stewardship of one U.S. Attorney may go unanswered by a different U.S. Attorney."