WASHINGTON – The
Federal Election Commission has slapped a $1 million fine
on Mitchell Wade, the former defense contractor who has
admitted bribing former Rep. Randy “Duke” Cunningham.
The penalty, the
second-largest ever imposed by the commission in its
32-year history of enforcing federal election laws,
culminates an investigation into claims that Wade tapped
funds from his company, MZM Inc., to reimburse employees
and their spouses who made $78,000 in political
contributions in 2003, 2004 and 2005 to Reps. Virgil
Goode, R-Va., and Katherine Harris, R-Fla.
The watchdog group Citizens for Responsibility and
Ethics in Washington triggered the investigation by filing
a complaint that cited a June 22, 2005, article in The
San Diego Union-Tribune.
That story quoted unidentified MZM employees saying
they were coerced into making political contributions to
the political action committee, MZM PAC.
The article came 10 days after the Union-Tribune
reported that Wade had taken a $700,000 loss on the Del
Mar home he had bought in 2003 from Cunningham, who at the
time was helping steer federal contracts to Wade's
Cunningham, who initially denied wrongdoing, later
admitted that Wade had bribed him. He is serving an
eight-year prison sentence in Arizona.
Federal law prohibits corporations from coercing
employees to make contributions. It also bars
reimbursement for the contributions.
The FEC complaint against Wade alleged that salaries at
MZM were “artificially inflated” to enable employees to
make campaign contributions.
As the Union-Tribune also reported, Goode and
Harris sought earmarks on behalf of MZM. Earmarks are line
items that individual members of Congress insert into
spending bills, often with little or no oversight.
Earmarks frequently benefit defense contractors and
their lobbyists, who in turn often contribute heavily to
congressional campaigns in what congressional scholar
Norman Ornstein of the American Enterprise Institute calls
“a self-reinforcing loop” of money and influence.
But while the FEC concluded that employees had been
pressured to contribute directly to the politicians, its
report cited “insufficient information to conclude that
employees were coerced into making contributions to MZM
The FEC announced the action yesterday, the same day
that a federal jury in San Diego began deliberations in
the case of Poway defense contractor Brent Wilkes, who is
accused of bribing Cunningham in order to receive
earmarked funds that Cunningham helped supervise as a
member of the defense appropriations subcommittee.
Wade testified for the prosecution in the case against
Wilkes, who in the late 1990s worked with MZM on defense
contracts. Wade, who last year pleaded guilty to
conspiracy to bribe Cunningham, is expected to be
sentenced early next year in a federal district court in