Category: San Diego
Alpha engine hits the brakes
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.
Who paid for Cunningham's bribes? You did.
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's Sentence: 30 months
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.
Mitch Wade Column for Voice of San Diego
My column on Mitch Wade’s sentencing is up.
If you haven’t heard of the Voice of San Diego, it’s a not-for-profit that The New York Times thinks may represent the future of watchdog journalism.
Please take a look, and support the Voice or a not-for-profit near you, like ProPublica, where Marcus Stern, the reporter who exposed Cunningham’s corruption, has hung out a shingle.
The prosecution's "own private law firm"
Federal prosecutors in Washington, D.C., responded today to defense contractor Mitchell Wade’s request for a sentence of a year of home detention for the extraordinary cooperation he provided the government in its investigations of Randy “Duke” Cunningham and many others. Simply put, the government thinks Wade’s good deeds don’t cancel out his bad ones.
Wade, after all, is a man who shelled out $1.8 million in bribes to Randy “Duke” Cunningham. Add in Wade’s corruption of officials in the Defense Department and the election fraud scheme he conceived and led, and you have a conduct that prosecutors think merits four years in prison.
And Wade’s suggestion of a $250,000 fine is “far too low.” MZM Inc., earned $100 million to $150 million in Defense Department contracts from 2002-2005. (See my earlier post below on MZM’s profitability.) Although prosecutors don’t note this, Wade spent $2 million on his legal team at WilmerHale.
“Wade … is still a wealthy man. He has the capacity to pay more and should pay more,” wrote Assistant U.S. Attorney Howard Sklamberg.
Prosecutors from San Diego chime in with their own piece of Wade fan mail. In a letter to the sentencing judge, Assistant U.S. Attorney Jason Forge says that Wade “transformed” the nascent investigation of Cunningham in 2005. Without his help, convicting the congressman might have taken years, instead of months.
On more than one occasion, several of us observed that the responsiveness and thoroughness of Wade and his legal team made us feel as if we had our own private law firm.
When Wade said Cunningham had written out on his congressional stationery a price list for increasing levels of government contracts, Forge thought it was a great story, but found it hard to believe. Wade’s counsel found the document, which became known as the “bribe menu,” a damning symbol of corruption.
The discovery of this bribe menu marked a high point in our investigation and also marked the last time we would seriously doubt any information Wade provided.
Trump / Russia 