San Diego Union Tribune

August 4, 2006

Pentagon silent on inquiry into Cunningham contracts

It still isn't known if bribery tainted defense projects

COPLEY NEWS SERVICE

WASHINGTON – Eight months after former Rep. Randy “Duke” Cunningham confessed to taking massive bribes in exchange for providing at least $230 million in questionable defense and intelligence contracts, the Defense Department inspector general still has not determined whether any of those projects were improper.

This week, the Pentagon announced that it would not renew one contract related to the scandal. But officials have been tight-lipped about the status of other taxpayer-funded work that may have been tainted, including a secret counterintelligence program. In fact, although several other Defense Department public affairs personnel and a congressional press aide have said in the past that an investigation into the Cunningham-linked contracts was being conducted, the inspector general's spokesman said yesterday that “as a matter of policy, we do not confirm or deny the existence of ongoing investigations.”

“If one exists, it would be improper to comment,” Army Lt. Col. Brian Maka said. “Obviously, if one does not exist, there would be nothing to say.”

There also have been no formal findings presented by the House panels on which Cunningham served while he channeled taxpayer dollars to two companies that gave him at least $2.4 million in cash, antiques and other gifts.

Cunningham pleaded guilty Nov. 28 to conspiracy and tax evasion. He admitted demanding and receiving cash and gifts from MZM, a Washington-based defense contractor, and Poway-based ADCS.

In return, he used his position as a senior member of the House Appropriations and Intelligence committees to steer more than $150 million in contracts to MZM and more than $80 million to ADCS, mainly through earmarks.

The former Navy fighter pilot is serving more than eight years in federal prison.

MZM founder Mitchell Wade pleaded guilty to bribing Cunningham and is awaiting sentencing. ADCS head Brent Wilkes has not been charged.

Several times since Cunningham admitted providing the earmarked appropriations to the two defense contractors, Pentagon public affairs officers have said that “there is an ongoing review by appropriate organizations within the department.” One spokeswoman cited the Defense Department inspector general as the office responsible for that investigation.

The House Intelligence Committee hired an independent counsel to conduct a review of Cunningham's work on that panel. It has not formally announced the results of that review, though committee members reportedly have been briefed on some of the findings.

The House Appropriations Committee is not conducting its own investigation because the panel is closely following an investigation of the contracts by the Pentagon's inspector general, committee spokesman John Scofield said.

“Of course we're concerned; of course we're monitoring the investigation – we've been monitoring it for some time,” Scofield said in March.

Although Cunningham did not serve on the House Armed Services Committee, its chairman, Duncan Hunter, R-Alpine, has ordered a review of its records by committee lawyers from both parties to see if there were any attempts by Cunningham to influence the panel's actions.

So far, the staffers have not found any improper action.

Although the Pentagon has not confirmed that any of the contracts linked to Cunningham were unwarranted, it announced Monday that it would not renew a $9 million contract awarded to MZM in 2003, forcing the closure of the Foreign Supplier Assessment Center in Martinsville, Va.

The center was set up to conduct background checks on foreign companies doing work for the Defense Department. It was once at the top of Cunningham's priority list, according to prosecutors. The most recent earmark for it was arranged by Rep. Virgil H. Goode Jr., R-Va., who received sizable campaign contributions from Wade and his family and associates.

Congress approved the funding less than a month after Cunningham admitted his misdeeds. The Pentagon, which never requested the money, said the operation was terminated because “the U.S. government has other entities that provide similar services.” In documents released before Cunningham was sentenced, prosecutors said it was “possible to attribute specific defense contract funding of Cunningham's co-conspirators to Cunningham's corrupt official acts.”

Projects cited in the documents included work on the Foreign Supplier Assessment Center; the National Ground Intelligence Center, a support facility for the Army; a top-secret program called CIFA, or Counterintelligence Field Activity; the Defense Joint Counterintelligence Program, which is part of CIFA; and Global Infrastructure Data Capture, a program to convert government documents into a digital format.

A spokeswoman for the Project on Government Oversight, which has been following the Cunningham scandal, said the group did not understand why the Pentagon inspector general could not determine the propriety of those contracts after eight months. The Foreign Supplier Assessment Center was being run by Athena Innovative Solutions, which acquired “selected assets” of MZM, including “all of the existing contracts,” in August 2005, according to a news release issued at the time by Athena's parent company, New York-based Veritas Capital.

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