FEC Levels $1 Million Fine on Contractor Wade

Posted October 31, 2007 at 6:23pm

Defense contractor Mitchell Wade, who pleaded guilty to bribing ex-Rep. Duke Cunningham (R-Calif.) in 2006, has agreed to pay a $1 million fine to the Federal Election Commission, the second-highest civil penalty in the commission’s history.

The FEC announced Wednesday that Wade agreed to a conciliation agreement in which he admitted to knowingly violating campaign finance law by funneling $78,000 in illegal corporate contributions to Rep. Virgil Goode (R-Va.) and ex-Rep. Katherine Harris (R-Fla.).

The former CEO of MZM Inc., Wade and his ex-office manager, Richard Berglund, pleaded guilty to funneling money to other MZM employees and their spouses that was then contributed to the lawmakers, thus circumventing federal contribution limits.

Berglund agreed to pay a $42,000 fine, and the FEC said it would not pursue action against MZM’s other employees who participated in the scheme.

The complaint was filed in June 2005 by Citizens for Responsibility and Ethics in Washington, a liberal-leaning watchdog group.

CREW Executive Director Melanie Sloan said she was “gratified” by the ruling.

“As the presidential campaign season progresses, a fine of this magnitude should serve as a warning to all political donors that violating federal campaign finance laws has serious consequences,” Sloan said.

In its unanimous support for the agreement, the FEC “found no evidence” that the campaigns of Harris or Goode, which largely refunded the related contributions, were aware of the violations.

The fine marks the second-largest civil penalty in the FEC’s history and brings to $4.7 million the total collected by the agency in 2007, compared with $6.2 million in 2006. The Federal Home Loan Mortgage Corporation paid the FEC $3.8 million in 2006 for illegally contributing to political committees.

“This one wasn’t subtle, it’s not like [Wade] tripped over some technicality,” said Ellen Weintraub, a Democratic FEC commissioner. “He set out to violate the law — and he did violate the law — and he did it in an attempt to line his own pockets. And that’s about as bad as it gets in the world of campaign finance violations.”

“I personally pushed for a very high penalty in this case,” Weintraub added. “It just seemed to me this was the epitome of what we should be going after.”

Wade and Berglund cooperated with authorities in the case, as in the Cunningham investigation.

In fact, it was Wade’s suspicious purchase of Cunningham’s Del Mar, Calif., home at a hugely inflated price that first put Cunningham under the media spotlight. Wade has said that he bribed Cunningham in order to get millions of dollars in defense contracts by purchasing such things as a $140,000 boat for the Congressman.

Wade has been a key witness in the federal trial of his mentor and former boss, Brent Wilkes, a defense contractor also close to Cunningham.

Wilkes is being tried on 13 charges of bribery, money laundering, conspiracy and fraud. The case went to the jury on Wednesday. Wilkes maintains he was just doing business as usual.

Serving a sentence of more than eight years at a federal prison camp in Arizona, Cunningham did not end up testifying at the Wilkes trial.