FBI Raids Home of Rep. Cunningham

Federal agents Friday raided the home of Rep. Randy "Duke" Cunningham as part of a grand jury probe of the congressman's links to a defense contractor.Agents also served search warrants on the Washington offices of the contractor, MZM Inc., and at the Duke Stir, the 42-foot yacht owned by MZM founder Mitchell Wade where Cunningham (R-San Diego) has been living for more than a year.

K. Lee Blalack, Cunningham's lawyer, called the raid "an appalling abuse of government power."

The federal investigation centers on the sale of Cunningham's house in November 2003 to Wade for $1,675,000. Investigators appear to be looking at whether the price was inflated to allow Wade to funnel money to the congressman. Cunningham's position in Congress, where he sits on a committee that controls the Pentagon budget, could have allowed him to influence the flow of contracts to MZM.

The home was never offered publicly for sale. Months after buying it, Wade sold the home for $975,000, a $700,000 loss. Cunningham and his wife bought their current house, an 8,000-square-foot home in Rancho Santa Fe, for $2.5 million soon after selling the Del Mar Heights house to Wade.

Cunningham says he offered to sell the house to Wade after the contractor said he needed a place near Miramar Marine Corps Air Station, where MZM has a project.

In a three-page statement issued last week, Cunningham said he showed poor judgment in selling the home to Wade but that he never gave preferential treatment to the defense contractor. He said he had paid $13,000 in berthing fees and maintenance costs related to his stay on Wade's yacht, which is berthed at a yacht club on the Potomac River.

from the LA TIMES