We are extremely fortunate today, to have with us Marcus Stern who, as far as I am concerned is a modern day American hero. We don't get many and this story in this book, I think and we have been so discouraged about the performance of the press. So just last night, we listened to Thomas Ricks get beat about the head and shoulders for the failures to expose the lead up to Iraq. But here is a reporter who did the deal. And not only did the deal, he set the sleeze bag after the joint, which is one of the really great achievements of all times as far as I am concerned. I mean it really is, I am a bit earnest, this is a marvelous accomplishment. Now I picked this up off to American journalism review, and so the gum shots out of this is not quite of what one would think it turns out, searching nexus property records turned to learn that Cunningham had sold his Del Mar home to something called 1523 New Hampshire Avenue. An address not a person. Another search revealed this address was the name of a Nevada company that listed Wade who was one of these players as his only officer. Stern then discovered that Wade had registered a second company in Nevada. A defense contracting company named MZM Inc.. Wow - world is really changed. A Google search turned up a Washington DC address on MZM's website. The site boasted about MZM's recent influx of federal contracts. Languishing previously, the company began receiving tens of millions of dollars in contracts from the Pentagon, around the time of the sale of the Del Mar house. Now isn't that fabulous, that began the unraveling as Mr. Stern says, now the Cunningham Scam and it's a wonderful story, it's a grand book and we are very fortunate to have it as I say a legitimate American hero with us tonight. Well, thank you thank you for that introduction and I don't know if any of you know about Dave Richards there gave Anne Richards her last name and so she is one of my heroes one of my political heroes. Can you hear? It's just here for show. All right can you hear me okay. And if you have trouble just let me know. I am going to start off by talking just a little bit and and then what I hope we can do is we get into a conversation. Duke Cunningham is a sort of corky political figure in America. And after his misdeeds were exposed, there was an effort to sort of paint him as an outlier as there is nothing wrong with the system. And so one of the things I feel strongly about is if there are some real institutional problems. It's not just one guy who happened to be flawed, have a flawed character. So I hope we can talk little bit about him, but if you want to talk about earmarks, if you want to talk about the appropriation's process, to procurement process and corruption and how do we attack corruption in government and I have a hope again that's where we will go with this. But let me start off do does everybody here know the story of Duke Cunningham or should I shall just okay well the idea of being a hero. Thank you very much but that's a scary thing because Duke Cunningham went off to Vietnam and on May 10th 1972, he shot down three MIGs in one day over in seven minutes. And nearly got himself and his backseater killed during a couple of things that were a kind of dumb, he admits - and retrospect. But he knocked down - he shot down three MIGs giving him five and made him the first ace in the Vietnam war and the first navy Ace since the Korean war. And that for him, those seven minutes, ended the war. After that he went to state side and he did, he went to parades and he was on the Today show and he was a professional war hero. And so you say hero, in the beginning of this we have a little saying, by F. Scott Fitzgerald, "show me a hero and I will write you a tragedy". So I will sort it. I will turn down the hero thing, but thank you. And let me start off by just telling you a little bit about how I got on to the story because that's something that I get asked a lot. There are a lot of people who sort of speculated that there was a tip involved and - or somehow, but there wasn't it was just you know, I was in my office one afternoon and Duke Cunningham who represented a district in San Diego had taken two trips to Saudi Arabia. And if you know anything about Duke Cunningham, Duke Cunningham is you know, tried on that, he really wore the mantle of war hero, he was conservative, he was supposedly a family man and he was very pro defense and very-very much into the war and terrorism after 9/11 that became you know, a cause that lead for him. I couldn't understand why he would go to Saudi Arabia twice, he liked to drink, he liked to hang out with women, not his wife. As Saudi Arabia is not a place where somebody does that. And so I could see him going to Saudi Arabia once by accident. But twice, and his explanation for why he went was that he was trying to improve relations between the United States and Saudi Arabia. And I have never known him to want to improve relations between anything. And he took so I was so skeptical of that and I went online and I tried to figure out "why did he go to Saudi Arabia?". I thought it must be have to do with an arms sale, I knew it had to do with money. Right this in my mind I knew that. And I spent a couple of hours trying to find a connection between Duke Cunningham, the guy who took him which was a constituent Saudi-American named Abduljawad and Boeing or Northrop or you know, the F-18 or something. I didn't find anything, but I thought well let me do one last thing before I go off and get my latte. And so I went to see if he upgraded his living accommodations. And you know, as something that I had done in the past with members of the congressional delegation from San Diego because we have a main paper in San Diego. So I did, I looked, I went into you know, check the property records. And it turned out, he had purchased a house, a year and half earlier for $2.55 million in a place called Rancho Santa Fe. And Rancho Santa Fe has residents like Bill Gates you know, and it's not our congressmen and his wife who happens to be a school administrator, that was just it was a stretch to see Duke Cunningham who was basically a public servant and his wife an administrator to see them living in the same community with Bill Gates. So and it was remarkable to be that nobody had noticed this in a year and half. But I said okay, what's wrong with this picture, I said "let back track, let me look and see how he purchase his house?", may be he sold his old house which was in a community called Del Mar Heights. May be he sold it. Got a big profit and that allowed him to buy the Rancho Santa Fe house. So I looked and I saw that he sold his Del Mar House Height's House for $1.675 million which was a big windfall from what he paid, I mean that's a big increase. He walked away conceivably with a million dollars or more and so I thought well may be that's you know it's how he did it. he just got but then I noticed that it was, the purchaser wasn't just a average you know, John Blow it was or Mary Jane or whatever it was 1523 New Hampshire avenue Inc. which I recognized, having grown up in DC, as possibly being a Washington DC address. You know, that's really curious that a company bought his house. Let me see what this company is. And so I went on, and I just found - I went through the records of the secretary of states. Records in Nevada, found it registered and it was to a guy named Mitchell Wade and if he had just put Mitchell Wade on that first transaction, if it's rather than 1523 New Hampshire avenue Inc. I am sure I would have just walked away and gotten my latte. But it's but anyway and I never heard of Mitchell Wade, so I saw Mitchell Wade, and then I saw that there was a second company registered in Nevada to Mitch Wade and it was something called MZM Inc. and so I then did as I said I turned to that super sophisticated new tool of investigative reporters and I Googled MZM Inc. and I found this corporate website and it was boasting about how it had gone from no prime contracts just two years earlier to having more than a 100 million in the time frame rough time frame for this sale. Now defense, Duke Cunningham sat on something called the Defense Appropriation Subcommittee. And that allowed him to have a pretty big sway over who got what contracts. He denies it and he denied it to me when I interviewed him. He told me "Marc I don't have anything to do with contracts". But as a member of the defense appropriation subcommittee, he surely did. He was very influential on that score and so I figured out pretty much right there that this you know, basically that Cunningham was getting paid off by this defense contractor in return for his help steering 100s and millions of dollars in defense contracts to that contractor who had never had prime contract before. By the way I then looked to see what Mitchell Wade, this man I didn't know what he did with this house. and I saw that he put it right back on the market, almost immediately for the same price and it languished on that in that San Diego's market and it was sizzling, double digit increases every year. It languished on the market for eight months before selling at a $700,000 loss. So what I needed at that point was to - is a formal assessment, appraisal of the properties. And so I contacted an appraiser and San Diego was going to do it and the appraiser said I will get you the results in a week and then half way through the week he said you know, - oh, not half way through the week. Half way through the week, we got Comps what are called Comps you know, the listing of the prices of the houses in that neighborhood at that time of the sale. But at the end of the week he told us, he was not going to deliver a appraisal, a formal appraisal. And we said "why?" And he said "I am not going to do this I am not going to talk about it, I am just not going to do it." so we called another appraiser in San Diego and that appraiser was accommodating until we told him the address. And then he said, he wasn't going to do the appraisal. And so we called a third one. And he wouldn't explain why. We called a third one and the third appraiser did the same thing, until we mentioned the address, everything was fine. The moment we mentioned the address, you know, it was no deal you know, deal was off. So we said "why?" and he finally said because the appraiser's association of Sacramento has told us that we shouldn't get involved. So we called the appraiser's association of Sacramento, and they didn't call us back for a really long time, but when they finally did, they said, "Well, that's just sort of generic advice we give not to get involve in second party transactions I think they call it. So what we had to do was send somebody over take a look at the house our self, take pictures and establish that this house belonged in the lower end of the spectrum of prices for Del Mar at that time rather than the higher end. And it was pretty clear I mean unfortunately he didn't take care of the house - they didn't take care of the house. It was pretty deteriorated; it did not have an ocean view. So we could establish, it should have been at the lower end of the spectrum of house prices. And after that it was simply a matter of calling Mitchell Wade up and confronting him, I still didn't know at that point, are they going to be able to explain this, may be they will have a perfect explanation for it and also Cunningham and so I called Mitch Wade's office and when I told him what I was interested in, they hung up on me so I thought that's a pretty encouraging sign and then they gave me totally bogus story, then I said you know, "hey I think you might want to go back to the well on that one" so you can come up with something better. And they didn't. So then I called Cunningham. Cunningham and I had a nice conversation. That lasted about seven minutes, excuse me for just a second. Thank you. And it was a low, key conversation. But I knew going into that conversation that I needed him to tell me one of the thing. I needed him to tell me that he had helped Mitchell Wade and MZM Inc. get contracts and that's all I needed really for my story, I mean that at that point I knew I was good at least for this the first story. Was he the one after that but I knew I have a story if I could establish that Cunningham had sold his house to a defense contractor at an inflated price and then also had helped this defense contractor get contracts. So Cunningham delightfully just wondered and said "oh yeah I helped him just like I have helped any contractor". A lot of contractors, he mentioned a number of other contractors that he helped. And at that point I said "okay my job is done here and I didn't mention him okay. Well, okay but did any of them buy your house from you at an inflated price? Because now what I had had was I have what we call a quid pro quo, you know, you need to establish that the congressman got something in exchange for doing an official duty. And that's what I call, I mean that's turns out to be an indictable offense and so anyway so we hung up and he had no idea that he had hung himself. He had absolutely no idea. And we reviewed our story on June 12 2005 and two days later the conservative republican editorial page of the San Diego union tribune was just filled with angry letters from retired military, and you know, you would think, oh they must be angry at the press for defiling their hero, disparaging him at this. And no they were angry at Duke Cunningham, they were just furious. I mean this was a kind of transaction that was so clear to them. And to the reader, that was like a punch in the nose. There was nothing confusing about this at all or questionable about this. Lot of hard facts from public records are really bad explanation from Duke Cunningham. They made it clear that he had in fact engaged in some kind of improper conduct. And so the readers you know, I was surprised, but the readers were very upset about this. And within a week, there was a grand jury convened in San Diego to begin investigating. Within three weeks they were issued executing search warrants and they were searching his house, Mitchell Wade's house, the yacht that congressman Cunningham was living on that was paid for by the contractor. And you know and it didn't take long before he was finally he admitted his guilt, he resigned his office and he is now serving eight years and four months in prison in Tucson. Now there are other players in this scandal and one of them is another defense contract or - Mitchell Wade, the guy who did the bribing. He has pled guilty, and he is waiting sentencing. He will do some serious jail time. There is a guy, defense contractor, the company's ADCS, Brent Wilkes he is from Poway in San Diego. His trial is upcoming, he is also probably going to do some serious I believe he will get convicted - the evidence is pretty overwhelming and you know, well okay you know, with the initials OJ sort of you know, as caveat there and just anybody can get off I suppose, but the evidence is pretty compelling that he bribed Cunningham. And then there is the numbered three guys at the CIA until recently. The guy named Dusty Fogo and he also has been indicted, he is awaiting trial. There is a fellow named Tommy Kontogiannis, he as a New York developer who basically laundered the bribes. He has pled guilty and then his nephew is being indicted, he has pled not guilty. So there is still lot of this to play out on the court the criminal courts. And the worst fear I think for someone like Karl Rove would be if someone like Brent Wilkes the second defense contractor were decide to plea guilty and work with the government because Brent Wilkes was given three quarters of a million dollars to republicans. And he has flown Tom Delay around on his private jets and I believe that there is a good chance of Brent Wilkes to talk. And really cooperate with the government that someone like Rove would be worried about that putting a few more republican seats in jeopardy. So Rove would not want that. Anyway so I don't want to sit here and talk for an hour so just anybody go ahead, yeah.
member. 
