Thread: Bribery law cited in move to block Cunningham home sale

http://www.nctimes.com/articles/2005/08 ... _18_05.txt

Last modified Thursday, August 18, 2005 11:27 PM PDT

Bribery law cited in move to block Cunningham home sale

By: MARK WALKER - Staff Writer

The Rancho Santa Fe home that U.S. Rep. Randy "Duke" Cunningham purchased for $2.5 million was bought with money allegedly obtained in violation of federal bribery laws, according to a filing last month in a forfeiture proceeding against the congressman.

The July 21 civil suit filing in U.S. District Court in San Diego seeks to stop Cunningham from selling the home and spending the proceeds, and initiate forfeiture proceedings on the property.

The filing by the U.S. Attorney's office in San Diego is the first official document that suggests the government may be pursuing a bribery charge against the congressman.

Notice of the suit, most of which is under court seal and not available to the public or Cunningham's attorneys, came in the public filing of a lis pendens, a legal notice that serves as notification of the civil suit and indicates that the government has an interest in the Cunningham property. The notice also lets prospective buyers know that they could risk losing the property to the government.

Assistant U.S. Attorney Leah Bussell wrote that the action stemmed from the government's desire for the home "in that said property is derived from proceeds traceable to a violation of Title 18 United States Code, Section 201, and is forfeitable pursuant to title 18." Section 201 of the code governs bribery and corruption of public officials.

Cunningham has denied any wrongdoing. His lead attorney, K. Lee Blalack, declined to comment on the government's reference to the bribery statute.

The government won a judge's approval to seal the suit immediately upon its filing, thereby keeping the details of its assertions secret. Federal prosecutors also received approval to keep secret the order that sealed the suit.

Those actions mean that Cunningham and his wife, Nancy Cunningham, have not been served with a copy of the government complaint and have no way of knowing what is specifically alleged.

The attempt to stop Cunningham from selling the home came one week after his July 14 announcement in San Marcos that he and his wife would sell the home and that he would not seek re-election.

The 50th District Escondido Republican cited an ongoing San Diego federal grand jury investigation into his dealings with defense contractors as a reason he would not seek a ninth consecutive term. He said in his announcement that he planned to donate a portion of the money from the home sale to three local charities.

Cunningham's attorneys are crying foul. In court papers filed Friday, they wrote that the government's move is a "Kafkaesque process" and point out that Cunningham has neither been convicted of any crime nor indicted. They also argue the action violates the Cunninghams' due process rights.

"We are anxious for the court to hear our arguments," Blalack said Thursday.

Bussell said the government's response to the arguments raised by Cunningham's attorneys are due next week. She said the government did not intend to seek an order barring the public from a scheduled Sept. 9 hearing on the civil suit. That hearing will be the first open court skirmish in the battle between government attorneys and Cunningham.

Cunningham's attorneys will argue before U.S. District Court Judge Dana Sabraw why they believe the government should not be allowed to stop the home sale or proceed on the forfeiture. It will be the first time that the U.S. attorneys involved in the case and Cunningham's attorneys will be together in the same room.

The defense attorneys also argue there is no precedent that allows the government to move ahead with the civil action without disclosing the specific allegations on which it is basing its suit.

"Mr. Cunningham is presumed innocent of the matters under investigation," they state in their pleadings with the court. "Moreover, because the house is owned by Mrs. Cunningham as well, even if the government had obtained a criminal indictment and a criminal forfeiture complaint, she would be entitled to her interests in the property. No federal court has ever authorized the government to cloud title to real property based on secret civil forfeiture allegations that are not disclosed to the people who hold lawful title to the property."

The government's strategy is not that unusual, according to William Braniff, who served as the U.S. attorney for San Diego from 1988 until 1993.

"The fact of the criminal investigation is generally well-known, so there's no disincentive to taking the civil action," he said. "The move to seal the civil suit is because they don't want to say anything more than is necessary about what they know."

In attempting to block the property's sale, Braniff said the government is merely trying to make sure that Cunningham can't sell it before prosecutors argue their case that it was purchased with money improperly obtained.

Paul Pfingst, former county district attorney, said he was surprised by the government's action, saying such actions normally would come post-conviction. He also said the civil suit does not bode well for Cunningham.

"It does indicate a very high probability that charges will be brought," Pfingst said Thursday.

The five-bedroom, gated Rancho Santa Fe home has been appraised at $3.3 million, according to the court papers filed by Cunningham's attorneys. That's $800,000 more than the couple paid when they purchased it in early 2004. It was listed for sale this week for $3.5 million.

That purchase came after the couple sold their Del Mar Heights home to defense contractor Mitchell Wade, who then sold that home for $700,000 less than what he had paid the Cunninghams.

That transaction and a North County Times report that Cunningham had stayed aboard a 42-foot boat owned by Wade for more than a year starting in April 2004 triggered the grand jury investigation, which began in late June.

Raids of two defense firms and the homes of the owners of those firms, as well as subpoenas issued in the probe, indicate the jury is probing whether Cunningham unduly influenced the awarding of Defense Department contracts, and whether he unlawfully received monetary gains from such actions.

Cunningham, a member of the House Appropriations Committee and its Defense Subcommittee, has said he welcomes the investigation and predicts he will be exonerated.

He has described Wade, owner of MZM Inc., as a personal friend. MZM, which was sold this week to another defense firm, reported a tripling of its Defense Department revenues around the time of the home sale.

On Tuesday, federal agents conducted a raid at Poway defense contractor ADCS Inc. and searched its office, as well as the home of its owner, Brent Wilkes, whom Cunningham also describes as a personal friend. Similar raids were conducted at Cunningham's home, Wade's home and MZM offices on July 1.

MZM and ADCS have made several contributions in recent years to Cunningham's re-election efforts.

The court documents say the Cunninghams decided to sell their home "in anticipation of the congressman's impending retirement, and based upon their belief they needed to reduce their monthly fixed costs."

The couple are paying $3,250 a month for the mortgage and have an annual property tax bill of $36,000, according to the documents. They recently made an offer of $749,000 for a home in the La Costa area of Carlsbad, but that offer was rejected, the documents state.

Cunningham's legal costs could reach as much as $1.5 million, according to one of his top aides. He has asked the House ethics committee for permission to establish a legal defense fund, and is seeking approval from the Federal Election Commission to use up to $672,000 in his campaign account to pay his attorneys' fees.

Contact staff writer Mark Walker at (760) 740-3529 or mlwalker@nctimes.com.

"in that said property is derived from proceeds traceable to a violation of Title 18 United States Code, Section 201, and is forfeitable pursuant to title 18." Section 201 of the code governs bribery and corruption of public officials.

I'm sure there are plenty of government officials and judges who could be prosecuted under the "bribery and corruption" code, but then you'd have to find an honest judge to do it -- good luck with that!


I did a search and found this note at
http://www.talkingpointsmemo.com/arc...2005_06_12.php

With the news today that the boat Randy "Duke" Cunningham lives on down at the yacht club really isn't 'his' yacht but rather a yacht pretty clearly bought for him by a defense contractor getting his help on the appropriations committee, you really have to wonder: How do they think they'll get away with it? And yet, until now he has.

there's no telling how much stocks, bonds and other property Congressmen and judges get