Democrats are calling for a full-scale investigation of Rep. Duke Cunningham’s (R-Calif.) sale of his San Diego home to a defense contractor.
Cunningham sold his home in San Diego in November 2003 to a Nevada-based corporation owned by Mitchell Wade. Wade is president of MZM Inc., a defense contractor specializing in classified intelligence work. The Nevada corporation, for which Wade is the only officer, lost nearly $700,000 when it resold the home more than eight months later.
As a senior member of the House Appropriations and Intelligence committees, Cunningham helps oversee contracts awarded to MZM. The Defense Department reported that MZM received $65 million in federal contracts in fiscal year 2004, placing it 37th among all defense-contracting firms.
The San Diego Union-Tribune first reported Cunningham’s home sale on Sunday.
In a statement released Monday, Cunningham denied any wrongdoing in his dealings with Wade. Cunningham insisted that the house he sold to Wade went for a price that was in line with other home sales in the area.
Cunningham used a local real estate firm to help establish the sale price, although the actual sale was a private transaction between Cunningham and Wade’s Nevada company. The San Diego realtor, Elizabeth Todd, and her husband, Whitney, donated $3,000 to Cunningham’s re-election campaign in the 2001-02 election cycle, according to federal campaign records.
“Mr. Wade was interested in purchasing our home,” said Cunningham’s statement. “[Wade] received comparables from an independent source establishing the value of the home. He made an offer based on that evaluation. Nancy and I accepted that offer. I have no reason to believe the value of the house was inflated then, and I have no reason to think so today.” Nancy Cunningham is the lawmaker’s wife.
Cunningham added: “I am proud of my 35 years of public service in both the U.S. Navy and the House of Representatives and can assure my constituents that this was an aboveboard transaction.”
Still unclear are the nature of his contacts with Wade regarding the home sale, where these discussions took place and how they originated. Why Wade used the Nevada corporation to purchase the home is also unexplained.
In an interview with the San Diego Union-Tribune, Cunningham said he was already planning on selling his home when Wade expressed interest in purchasing it.
“I tried to sell my house,” Cunningham told the newspaper. “And I told a bunch of other people I wanted to sell it when Mr. Wade said, ‘Hey, I’ll buy it.’”
Democrats immediately pounced on the news of Cunningham’s home sale, suggesting it was a sweetheart deal structured to improperly benefit the eight-term lawmaker.
“It looks like a bribe from this distance,” said Bob Mulholland, communications director for the California Democratic Party. “It smells, and hopefully the Congressional ethics committee will take this issue up.”
Jennifer Crider, press secretary for House Minority Leader Nancy Pelosi (D-Calif.), used the controversy around Cunningham’s home sale to both bash Cunningham and prod Republican leaders to break a six-week stalemate within the ethics committee over staffing. The ethics panel has not been able to undertake any investigative work this session as GOP and Democratic leaders have struggled over ethics rules and staff makeup.
“This is precisely the sort of allegation that a non-partisan, functioning Ethics Committee would consider: Did Mr. Cunningham receive an illegal gift and or violate provisions of the criminal code that prohibit the receipt of something of value in return for official action? Or was this a fair market value home sale?” Crider wrote in an e-mailed statement. “Republicans should immediately stop blocking the Ethics Committee’s organization and allow the Committee to do its work.”
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