Hastert Now Under Investigation

May 25, 2006

From The Blotter at ABC News:

Federal officials say the Congressional bribery investigation now includes Speaker of the House Dennis Hastert, based on information from convicted lobbyists who are now cooperating with the government.

Part of the investigation involves a letter Hastert wrote three years ago, urging the Secretary of the Interior to block a casino on an Indian reservation that would have competed with other tribes.

The other tribes were represented by convicted lobbyist Jack Abramoff who reportedly has provided details of his dealings with Hastert as part of his plea agreement with the government.

The letter was written shortly after a fund-raiser for Hastert at a restaurant owned by Abramoff. Abramoff and his clients contributed more than $26,000 at the time.

The day Abramoff was indicted, Hastert denied any unlawful connection and said he would donate to charity any campaign contribution he had received from Abramoff and his clients.

A spokesman for Speaker Hastert told ABC News, "We are not aware of this.  The Speaker has a long history and a well-documented record of opposing Indian Reservation shopping for casino gaming purposes."

This week, Hastert has been outspoken in his criticism of the FBI for its raid on the office of another congressman under investigation, Democrat William Jefferson of Louisiana.

"My opinion is that they took the wrong path, Hastert said of the FBI.  "They need to back up, and we need to go from there."


Another GOP Congressman Under Investigation

May 11, 2006

From The LA Times:

Federal prosecutors have begun an investigation into Rep. Jerry Lewis, the Californian who chairs the powerful House Appropriations Committee, government officials and others said, signaling the spread of a San Diego corruption probe.

The U.S. attorney's office in Los Angeles has issued subpoenas in an investigation into the relationship between Lewis (R-Redlands) and a Washington lobbyist linked to disgraced former Rep. Randy "Duke" Cunningham (R-Rancho Santa Fe), three people familiar with the investigation said.

The investigation is part of an expanding federal probe stemming from Cunningham's conviction for accepting $2.4 million in bribes and favors from defense contractors, according to the three sources.

It is not clear where the investigation is headed or what evidence the government has. But the probe suggests that investigators are looking past Cunningham to other legislators and, perhaps, the "earmarking" system that members of Congress use to allocate funds.

Lewis said Wednesday that he was not aware of any investigation, had not been contacted by any investigator and did not know why he would be investigated.

"For goodness sake, why would they be doing that?" Lewis asked.

The government is looking into the connection between Lewis and his longtime friend Bill Lowery, the sources said. Lowery, a lobbyist, is a former congressman from San Diego.

As chairman of the Appropriations panel, Lewis has earmarked hundreds of millions of dollars in federal contracts for many of Lowery's clients, one of the sources said.

Lewis said he knew Lowery well, having spent 12 years in Congress with him, but denied favoring earmarks for Lowery's clients.

"Absolutely not," Lewis said. He said all the earmarks he authorized benefited "my constituents and my people." He said he was particularly proud of helping fund programs such as the cancer treatment center at Loma Linda University, a client of Lowery's. "That would never have been accomplished without an earmark," he said.

The Lewis investigation is in the early stages and has not been presented to a grand jury, the sources said. They spoke on condition of anonymity because they were either involved in the probe or were not authorized to speak about ongoing investigations.

Thom Mrozek, spokesman for the office of U.S. Atty. Debra Wong Yang, said that as a matter of policy he could not confirm or deny any investigation it might be conducting.

The probe focuses on what one source said was an unusually close relationship between Lewis and Lowery, who served on the House Appropriations Committee together from 1985 to 1993.

Shortly after leaving Congress, Lowery founded Copeland Lowery Jacquez Denton & White, a Washington lobbying firm whose clients include Brent R. Wilkes, a defense contractor who is the focus of a separate probe in San Diego.

Wilkes has been identified by his lawyer as the unindicted "co-conspirator No. 1" in the Cunningham corruption case.

In that case, Cunningham was sentenced to eight years and four months in prison for accepting $2.4 million in bribes and favors from "co-conspirator No. 1" and his business associate, Mitchell Wade, who pleaded guilty to bribing Cunningham. Cunningham and Wade are cooperating with federal investigators.

Wilkes and his companies have given Lewis at least $60,000 in campaign contributions over the years, making them among the lawmaker's largest contributors.

At the same time, Wilkes has paid Lowery's firm more than $160,000 in lobbying fees.

According to Taxpayers for Common Sense, a nonpartisan research organization, Lewis has earmarked at least $70 million in federal funds for a mapping software company in Redlands. The company, Environmental Systems Research Institute Inc., is one of Lowery's largest clients and has paid more than $320,000 in lobbying fees, according to the nonpartisan Center for Public Integrity.

Investigators are said to be particularly interested in the intermingling of Lewis' and Lowery's staffs and whether it led to favorable treatment for Lowery's clients in securing government contracts.


CIA #3, Under Investigation, Quits Agency

May 9, 2006

First Porter Goss, now Kyle Foggo.  It makes me wonder how senior members of the Bush administration are not considering jumping out of windows.  Damage control mode must be in overdrive in the west wing.

–DS

From MSNBC:

…Earlier today, the agency circulated an internal announcement that agency’s third ranking official, Kyle (Dusty) Foggo, has decided to step aside. News of Foggo’s departure inevitably will be overshadowed by the Hayden nomination, but its effects will continue to resonate within the agency. As NEWSWEEK first reported, the CIA’s inspector general has been investigating whether Foggo helped steer agency contracts to companies run by Brent Wilkes, a defense contractor who was identified as an unindicted co-conspirator when former San Diego congressman and ex-Navy air ace Randy (Duke) Cunningham pleaded guilty in a Congressional bribery scandal. The CIA has acknowledged that its internal watchdog is investigating whether Foggo helped steer any contracts to Wilkes, an old friend. The inspector general was looking into at least one specific contract, worth between $2 million and $3 million, which a CIA base in Germany granted to a company run by a relative of Wilkes. At the time the contract was issued, Foggo headed the CIA base’s logistics office, though he did not sign the contract.


CIA Nominee Hayden Linked to MZM

May 9, 2006

From The TPM Muckraker:

While director of the National Security Agency, Gen. Michael V. Hayden contracted the services of a top executive at the company at the center of the Cunningham bribery scandal, according to two former employees of the company.

Hayden, President Bush's pick to replace Porter Goss as head of the CIA, contracted with MZM Inc. for the services of Lt. Gen. James C. King, then a senior vice president of the company, the sources say. MZM was owned and operated by Mitchell Wade, who has admitted to bribing former Rep. Randy "Duke" Cunningham with $1.4 million in money and gifts. Wade has also reportedly told investigators he helped arrange for prostitutes to entertain the disgraced lawmaker, and he continues to cooperate with a federal inquiry into the matter.

King has not been implicated in the growing scandal around Wade's illegal activities. However, federal records show he contributed to some of Wade's favored lawmakers, including $6000 to Rep. Virgil Goode (R-VA) and $4000 to Rep. Katherine Harris (R-FL).

Before joining MZM in December 2001, King served under Hayden as the NSA's associate deputy director for operations, and as head of the National Imagery and Mapping Agency.

King worked at NSA Headquarters in Ft. Meade, Maryland, in 2004 and 2005, both sources told me. "King was out there working on same floor as Hayden," one former employee with firsthand knowledge of the arrangement said. "He was doing special projects for Hayden as an MZM employee." Neither former employee knew details of King's work for Hayden; one said he thought he was doing "special projects" for the director, while the other speculated it was "high-ranking advisory work."

The NSA did not immediately respond to my request for comment. Hayden left the NSA in April 2005 to take the post of Deputy Director of National Intelligence. The DNI office referred my call on the matter to the NSA.

As an MZM employee, King was involved in a number of controversial projects. In 2002, he was a key adviser to the team creating CIFA, the Pentagon's domestic surveillance operation. In 2004, he was one of three MZM staffers who worked on the White House Robb-Silberman Commission, which recommended expanding CIFA's powers.

NSA is home to its own controversial project, of course — the post-9/11 warrantless domestic wiretapping operation known as the "terrorist surveillance program." There is no indication that King has been involved in that project.

"I don't see anything nefarious" about King's work for Hayden, one employee told me, although he conceded he did not know what projects King worked on. "I think Hayden needed help."

King became president of MZM when Wade left the company in June 2005, following revelations he bribed Cunningham to win lucrative federal contracts. The company has since been sold and renamed Athena Innovative Solutions. It did not return my call for comment.


Common Cause Asks DOJ For Harris Investigation

May 2, 2006

From Yahoo! News:

A congressional watchdog group asked the Justice Department on Monday to investigate whether Rep. Katherine Harris (news, bio, voting record), R-Fla., attempted to obtain a $10 million appropriation for a defense contractor in return for his financial support.

Common Cause filed a complaint with the Justice Department, citing information provided by contractor Mitchell Wade, as part of a plea agreement in the bribery case of convicted former Rep. Randy "Duke" Cunningham, R-Calif.

Justice Department spokesman Bryan Sierra said the department does not comment on, or confirm, criminal investigations.

Harris is a two-term House member who is running for the Senate. However, she is best known as the state official who certified President Bush's 537-vote win in Florida in the disputed 2000 presidential election.

Wade, former president of MZM Inc., admitted making $32,000 in illegal contributions to Harris' 2004 campaign for the House.

Harris said she did not knowingly do anything illegal and said she would donate the money to charity.

Wade said that he and a "Representative B" — later identified as Harris — had dinner in Washington in early 2005. The contractor said they discussed the possibility of Wade's company hosting a fundraiser for the lawmaker — and the possibility of Harris obtaining funding for a Navy counterintelligence program in her district.

The Common Cause complaint said that after the dinner, Harris sent a letter to the chairman and ranking member of a House subcommittee requesting funding for the counterintelligence program.

Harris' office said in a news release that the request was for $10 million.

Federal law prohibits public officials from corruptly seeking or receiving anything of value in return for being influenced in the performance of any official act.

Harris is trying to unseat Sen. Bill Nelson (news, bio, voting record), but statewide polls show her trailing the Florida Democrat by double digits. National Republicans have openly criticized her campaign and have tried to court other GOP candidates to challenge Harris in the primary. The filing deadline for the primary is May 12.


Duke Cunningham Bribery Case To Expand

April 28, 2006

From The Wallstreet Journal:

Cunningham Is Suspected Of Asking for Prostitutes; Were Others Involved?

Federal prosecutors are investigating whether two contractors implicated in the bribery of former Rep. Randall "Duke" Cunningham supplied him with prostitutes and free use of a limousine and hotel suites, pursuing evidence that could broaden their long-running inquiry.

Besides scrutinizing the prostitution scheme for evidence that might implicate contractor Brent Wilkes, investigators are focusing on whether any other members of Congress, or their staffs, may also have used the same free services, though it isn't clear whether investigators have turned up anything to implicate others.
 
In recent weeks, Federal Bureau of Investigation agents have fanned out across Washington, interviewing women from escort services, potential witnesses and others who may have been involved in the arrangement. In an interview, the assistant general manager of the Watergate Hotel confirmed that federal investigators had requested, and been given, records relating to the investigation and rooms in the hotel. But he declined to disclose what the records show. A spokeswoman for Starwood Inc., Westin's parent company, said she wasn't immediately able to get information on whether the Westin Grand had been contacted by investigators.

Mr. Cunningham, a Republican from San Diego, was sentenced March 3 to more than eight years in federal prison after he admitted taking $2.4 million in bribes. The bribes were taken in exchange for helping executives obtain large contracts with the Defense Department and other federal agencies. Mr. Cunningham, who resigned from Congress in November, pleaded guilty to two criminal counts, one of tax evasion and one of conspiracy.

In documents filed in federal court in San Diego, prosecutors listed four "co-conspirators" in the bribing of Mr. Cunningham. The two who allegedly played the biggest role, listed as co-conspirators No. 1 and No. 2, have been confirmed by Justice Department officials and defense lawyers to be Mr. Wilkes and Mitchell Wade, the founder and former head of MZM Inc., a software and computer-services firm that Mr. Cunningham helped to gain federal contracts.

The charges against Mr. Cunningham had alleged that "Co-conspirator #1" — Mr. Wilkes — had given the congressman more than $600,000 in bribes, including paying off a mortgage on Mr. Cunningham's house.

Mr. Wilkes hasn't been charged with any crime, and people with knowledge of the investigation say he recently decided he would fight any charges that might be filed rather than plead guilty and cooperate with the investigation. Michael Lipman, Mr. Wilkes's lawyer, denied his client had been involved in procuring prostitutes. "There was no such conduct. It did not happen," Mr. Lipman said. The lawyer added that "Mr. Wilkes and ADCS strongly believe that all of their actions have been proper and appropriate. They are confident that the government will come to the same conclusion."

Mr. Wilkes, of Pohway, Calif., founded a series of companies that obtained federal contracts, including ADCS Inc., which won contracts to convert paper military records to computer images.

Mr. Wade in February pleaded guilty to giving bribes of more than $1 million to Mr. Cunningham, including cash, antiques and payment for yachts. Mr. Wade, who hasn't been sentenced yet, is cooperating with prosecutors. According to people with knowledge of the investigation, Mr. Wade told investigators that Mr. Cunningham periodically phoned him to request a prostitute, and that Mr. Wade then helped to arrange for one. A limousine driver then picked up the prostitute as well as Mr. Cunningham, and drove them to one of the hotel suites, originally at the Watergate Hotel, and subsequently at the Westin Grand.

Mr. Wade told investigators that all the arrangements for these services had been made by Mr. Wilkes and two employees of Mr. Wilkes's company, according to people with knowledge of his debriefing. He said Mr. Wilkes had rented the hotel suites and found the limousine driver, who had "relationships" with several escort services. Mr. Wade told prosecutors that sometimes Mr. Cunningham would contact him to request these services, and he would pass on the request to Mr. Wilkes or his employees, who then made the actual arrangement. Mr. Wade said that other times Mr. Cunningham called Mr. Wilkes directly to make the requests.

If investigators find that any other members of Congress or their staffs received services at so-called hospitality suites, that could help make a case that they had illegally taken action to benefit Mr. Wilkes in return for favors from him. Mr. Wilkes, his family members and his employees were heavy campaign contributors to several members of Congress. But prosecutors so far apparently haven't found any evidence that other members of Congress had been bribed.

Mr. Wade told investigators that he had knowledge only of the service being provided to Mr. Cunningham, not anyone else, and has said he doesn't know whether Mr. Wilkes may have provided prostitutes or other free entertainment to anyone besides Mr. Cunningham.

K. Lee Blalack II, Mr. Cunningham's lawyer, said, "I have no comment on that" when asked about his client's alleged use of prostitutes. Mr. Cunningham, 64 years old, currently is undergoing a routine medical evaluation at the Butner Federal Correctional Complex in North Carolina.

People close to the case said prosecutors had hoped that Mr. Wilkes, like Mr. Wade, would plead guilty and turn over information relevant to the investigation. Now that he has indicated he won't do so, prosecutors are hunting for evidence to bolster any potential case against him.

Meanwhile, prosecutors are looking at whether they can make corruption cases against other lawmakers based on Mr. Wilkes's campaign contributions to them. But lawyers expert in campaign-finance and criminal law say such cases are far more difficult to prove than those involving outright bribery. The government must show a direct "quid pro quo" that a lawmaker has taken action on a particular bill solely because of a campaign contribution.

Proof of the prostitution scheme, on the other hand, could provide potentially damaging evidence that Mr. Wilkes had taken illegal steps in exchange for legislative favors, people involved in the investigation said.