San Diego County’s pension fund says the assumptions underlying its $1b hedge fund investment are no longer true. The fund’s alpha engine had used hedge funds and derivatives to power its to “alpha,” above-market returns. My piece is now up at Voice of San Diego.
Following Monday’s sentencing of defense contractor Mitchell Wade, Sen. Dan Inouye’s spokesman responded to my reporting that the senator was one of the Wade five:
“Senator Inouye has not been contacted by the FBI or any other investigative authority in connection with the cases involving Duke Cunningham, Brent Wilkes and Mitchell Wade. Speculation and suggestions that a cloud of wrongdoing hangs over him and that he engaged in similar misconduct have no basis in fact.” — Inouye Press Secretary Mike Yuen.
That’s the true meaning of today’s sentencing of defense contractor Mitchell Wade, who supplied former Rep. Randy “Duke” Cunningham with $1.8 million in bribes.
Judge Ricardo Urbina sentenced Wade to 30 months in prison and, unbelievably, imposed a fine of only $250,000. If I’m reading the prosecution’s court filings correctly, that means the judge is allowing Wade to keep most of the wealth his corruption bought.
Prosecutors had asked for a much higher “significant” fine. In court filings, the government said the $250,000 fine Wade’s attorneys were seeking was “far too low” a penalty, noting that it’s only $16,000 more than the mandatory minimum penalty.
“Wade, whose company earned $150 million from Defense Department from 2002-2005, is still a wealthy man. He has the capacity to pay more, and he should pay more,” Assistant U.S. Attorney Howard Sklamberg wrote in a court filing.
Judge Urbina had the tricky task of balancing what prosecutors called Wade’s “mammoth acts of corruption” with the extraordinary assistance he provided the government in its investigation of Cunningham and others. The judge rewarded Wade for his cooperation with reduced prison time.
By failing to impose a significant fine and seize the ill-gotten gains, the judge is assuring Wade can pay his $2 million legal team at WilmerHale and still profit from his corruption.
And here I thought the criminal justice system was supposed to discourage crime.
Mitch Wade, the defense contractor who bribed former Rep. Randy “Duke” Cunningham and then helped to swiftly put the congressman behind bars, was sentenced to 30 months in prison today in return for the extraordinary assistance he provided the government. With time off for good behavior, Wade will serve about two years.
Prosecutors had sought four years in prison and a “significant fine” for the $1.8 million in cash, a yacht, a used Rolls-Royce, antiques and the purchase of the congressman’s Del Mar home for an inflated price. Wade’s attorneys had asked for a year of home detention.
Equally significant, Judge Ricardo Urbina ordered Wade to pay a $250,000 fine. That essentially allows Wade to keep much of the money he made bribing Cunningham, who used his positions on the powerful Defense appropriations subcommittee and the House intelligence committee to steer lucrative contracts to Wade’s firm, MZM Inc. Over three years, MZM was awarded more than $150 million in government contracts. In the end, taxpayers are stuck with the bill for Cunningham’s bribes.
Wade also made $78,000 in illegal campaign contributions to Reps. Harris and Goode. (Wade was fined $1 million by the Federal Election Commission, the second-largest fine in its history.) And he provided job offers and other goodies in the Defense Department to ensure favorable treatment for his company.
When his corruption was exposed by Copley News Service reporter Marcus Stern, Wade quickly became the government’s main informant. He was debriefed 23 times and provided a searchable, electronic database of 150,000 documents. It was Wade who handed over the most infamous evidence of Cunningham’s corruption — the “bribe menu.” Wade also testified at the bribery trial of his former boss, Poway defense contractor Brent Wilkes, the man who introduced him to Cunningham.
According to a sentencing memo filed by Wade’s attorneys says he also aided the government in its investigation of “at least five other members of Congress” under investigation for “corruption similar to that of Mr. Cunningham.” Sources with knowledge of the investigation say these five include Sen. Dan Inouye (D-Hawaii), Rep. Allan Mollahan (D-W.Va.), Rep. Jerry Lewis (R-Calif.), outgoing Rep. Virgil Goode (R-Va.), and former Rep. Katherine Harris (R-Fla).
The extent of his cooperation is reflected in Wade’s sentence, the lowest of any of the major figures caught in the Cunningham scandal. The former congressman is serving 100 months. Wilkes was convicted at trial and sentenced to 12 years. Thomas Kontogiannis was sentenced to eight years for laundering the congressman’s bribes.
Judge Urbina specifically commended Wade’s $2 million legal team at WilmerHale for their work on the case.
Thomas Medvetz, The San Diego Union-Tribune:
Since the false premises and reckless mismanagement of the Iraq war have become widely known, there has been a great deal of soul-searching about the content of our public debate. But in my view the problem with this soul-searching is that, like the discussion above, it tends to reduce very quickly to a tallying of individual credit and blame rather than an examination of the profound misfirings of institutions. A postgame score card is no substitute for genuine inquiry into the deeper rules of public debate, which at present tend to ensure victory to the holders of the loudest megaphone over the bearers of evidence, to broadcast ratings over journalistic integrity, and to vigorous flag-waving over rigorous analysis.
Trump / Russia 