An Investment in Politics

CNN advises that the Republican US Congressman Randy "Duke" Cunningham is resigning from Congress after pleading guilty to taking around $2.4 million in bribes in "a criminal conspiracy involving at least three defense contractors".

Both CNN and the Washington Post, have named one Mitchell Wade, majority owner of MZM Inc., as being involved these activities. Cunningham has admitted,

that he had helped MZM win contracts, as he said he has helped other firms. Government contracts for the company, whose Web site describes it as helping solve "enigmatic problems . . . in the areas of intelligence collection and analysis," grew from $41 million in 2003 to $66 million in 2004, according to Washington Technology magazine. (WP)

But that is not the half of it. This June California's North County Times reported that,

In September 2002, MZM signed a broad deal with the Pentagon, called a "blanket purchase agreement." The agreement allowed the company to negotiate defense contracts with branches of the armed forces totaling as much as $250 million over a five-year period.

Since then, the company has used the agreement, which it received without competitive bidding, to secure contracts with different branches of the armed forces for $163 million, according to Pentagon sources. ...

According to an official with Washington budget watchdog Taxpayers for Common Sense, of 90 contracts that MZM received through the blanket purchase agreement, 85 involved no competitive bidding.

When MZM was awarded the blanket agreement, it was the only bidder for the deal, Pentagon officials said in their Tuesday statement. In November 2002, one month after the MZM agreement was signed, Congress voted to change the rules on federal contracts to make them more competitive. ...

Despite the Pentagon's statement that the contract's cancellation is unrelated to the current federal investigation of Cunningham's ties to Wade, the timing of the Pentagon decision is highly suspect, said Keith Ashdown, vice president of policy for Taxpayers for Common Sense.

"It makes it look like the Pentagon was giving this contractor a sweetheart deal, and now (because of the controversy), they are trying to limit their losses by cutting MZM off at the knees," Ashdown said.

More recently Washington Technology reported that MZM has just been bought by private equity firm Veritas Capital which "has formed a new company, Athena Innovative Solutions Inc., which will take over the employees, assets and contracts from MZM.... In an apparent nod to Wade’s legal woes, Veritas said it was only assuming 'specific liabilities associated with the ongoing operations.'"

But MZM is only one of CNN's reportedly three dirty contractors. What about the other two?

"In a written statement, House Minority Leader Nancy Pelosi, a California Democrat, said the case "is just the latest example of the culture of corruption that pervades the Republican-controlled Congress, which ignores the needs of the American people to serve wealthy special interests and their cronies." (CNN)

As they say in Italy, "a fish always rots from the head".