Gold9472
04-27-2006, 12:01 PM
Prosecutors May Widen Congressional-Bribe Case
http://online.wsj.com/public/article/SB114610728002837324-nRnF_ahxSnYdWg6foBQ3_mvCwZ4_20070427.html?mod=blog s
By SCOT J. PALTROW
April 27, 2006; Page A6
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.
http://online.wsj.com/public/article/SB114610728002837324-nRnF_ahxSnYdWg6foBQ3_mvCwZ4_20070427.html?mod=blog s
By SCOT J. PALTROW
April 27, 2006; Page A6
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.