The Cunningham Scandal: A White House Link?
It's a cliche: what a difference a Democratic congressional majority makes. The US attorney scandal, Walter Reed, the suppression of global warming data, the FBI's misuse of national security letters--Democratic legislators have been demanding documents, testimony and answers. Given that they now hold the purse strings and can shoot out subpoenas, the Democrats can no longer be ignored by the White House, executive agencies, and the media. Representative Henry Waxman, the relentless Democratic chairman of the government oversight and reform committee, has been leading the pack in investigating allegations of administration wrongdoing. (See my 2005 profile of Waxman here.) There's a lot for Waxman to cover, and he's being thorough. Consider the letter he sent the White House on Monday.
In that note to Joshua Bolten, President Bush's chief of staff, Waxman requested information about a $140,000 contract the White House awarded in July 2002 to MZM, Inc. This was Mitchell Wade's company. He's the (now former-) military contractor who paid more than $1 million in bribes to Republican Representative Randy "Duke" Cunningham, who's in jail for having accepted these and other bribes in return for steering federal contracts to Wade and Brent Wilkes, another defense contractor. (Wade pleaded guilty; Wilkes has not.) What's intriguing about the contract Wade received from the White House is that its amount equals the price Wade paid in August 2002 to buy the Duke-Stir, the yacht Cunningham lived (and partied) on in Washington. According to the sentencing recommendation memo in Cunningham's case, Cunningham himself negotiated the $140,000 purchase price of the boat in the summer of 2002. This raises the intriguing possibility that Wade that summer needed money to buy Cunningham the yacht and--presto--a White House contract materialized.
And there's more: this contract was Wade's first prime contract with the federal government. The firm had been incorporated in 1993 but had pulled in no revenue through 2001. So Cunningham scandal watchers have wondered, did a White House contract help launch Wade on his felonious ways, and was this contract legitimate?
The modest contract reportedly covered supplying computers and office furniture to Vice President Dick Cheney's office. By the time it was signed, MZM, which had become an approved federal contractor only two months earlier, was already bribing Cunningham, a member of the influential defense appropriations subcommittee. Two months later, in September 2002, MZM hit it big, scoring a $250 million, five-year contract with the General Services Administration. Look at the timeline, one congressional investigator notes: May, MZM was listed as a federal supplier; July, it won a White House contract for $140,000; September, it obtained a $250 million contract. A not-too-suspicious mind could wonder if something--or someone--was juicing the process.
A look at that first contract--and how it had come to be--would seem a no-brainer for investigators. Plenty of MZM's subsequent doings have been probed. But as Waxman notes, "To date, however, there has been no examination of the circumstances surrounding MZM's initial federal contract and the role that White House officials played in the award and execution of the contract."
Months ago, I tried to obtain information about this contract. According to federal procurement records, the contract was for "ADP systems development services" and "custom computer programming services." What did MZM do for the White House under these terms? I contacted the Interior Department. Why Interior? It's home to an interagency contracting office that handles procurement for the White House. This office was established during the Clinton administration as a good-government measure aimed at consolidating contracting efforts. But this procurement reform has become subject to abuse. A recent Senate armed services committee hearing examined how this change in the procurement system has allowed agencies to escape effective oversight. A 2005 Government Accountability Office report slammed the Interior Department's interagency contracting office for "significant problems" in handling Pentagon contracts granted to CACI International for interrogation and "other intelligence-related services" in Iraq.
I asked the Interior Department if I could obtain a copy of the MZM contract under the Freedom of Information Act. The answer: you can submit a FOIA request, but you won't get anything. "It's national security," an Interior official told me, reciting various exemptions. The release of this information, he said, was restricted not by the Interior Department but by the Executive Office of the President because it "includes techniques and procedures used by the Secret Service for law enforcement investigations" and because its disclosure "could reasonably be expected to risk circumvention of the law." He added, "There is no way to get any details."
A committee chairman with access to subpoenas might have better luck. Waxman has asked for all MZM contracts related to the White House and other materials, such as any communications between Wade, Wilkes, MZM officials and White House employees. Waxman's request also covers communications between the White House and Interior relating to MZM--for the obvious reason.
It could be that MZM in the summer of 2002 managed to snag a small White House contract in legitimate fashion, even as Wade was plotting a quick, bribery-greased rise to the top. But given that the Cunningham/MZM tale is one of sleaze and crime--I haven't even mentioned the prostitutes Cunningham received as bribes--Wade's first contract with the Bush administration deserves scrutiny. Republican legislators--no surprise--expressed no interest in this when they ran Congress. And, coincidentally or not, the US attorney in charge of the Cunningham case, Carol Lam, is one of the prosecutors who was fired by the Bush administration. But here comes Waxman, and the Case of MZM's First Contract is alive and open.
Don't forget about HUBRIS: THE INSIDE STORY OF SPIN, SCANDAL, AND THE SELLING OF THE IRAQ WAR, the best-selling book by David Corn and Michael Isikoff. Click here for information on the book.
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