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Saturday, February 25, 2006

Ex-boss of MZM admits bribery

He also pleaded guilty to making illegal campaign contributions to two lawmakers.

The former head of a defense contracting company linked to more than $90,000 in campaign contributions to U.S. Rep. Virgil Goode pleaded guilty Friday to channeling illegal funds to three members of Congress.

Mitchell Wade, who resigned last year as chief executive officer of MZM Inc., admitted in U.S. District Court in Washington, D.C., that he bribed Rep. Randy "Duke" Cunningham of California with cash and gifts. Wade also pleaded guilty to making illegal campaign contributions to two other lawmakers.

Federal prosecutors said Wade's motive was to curry favor with lawmakers positioned to steer lucrative defense contracts his way.

Goode appears to be one of those lawmakers, although he is not named in court records unsealed Friday. Wade admitted he made illegal contributions to two lawmakers identified in court documents only as "Representative A" and "Representative B."

However, descriptions in court records of Representative A bear a striking resemblance to Goode. The Rocky Mount Republican has received more than $90,000 from MZM's political action committee, its employees or their spouses.

Taken together, the MZM-linked donors represented Goode's largest source of campaign money in the past two election cycles.

"I was shocked and amazed to learn the details of the plea agreement concerning former MZM CEO Mitch Wade," Goode said in a statement. "I had no knowledge that any of the contributions by MZM persons to our campaign were illegal."

Asked if the congressman was the Representative A listed in the charges that Wade pleaded guilty to, Goode spokesman Linwood Duncan referred that question to Goode.

Goode did not return a message that Duncan said he would attempt to relay.

Wade channeled illegal donations to Representative A because the lawmaker had the ability to request appropriations for a second MZM facility in his district, according to court documents.

Goode, a member of the House Appropriations Committee, has said he requested more than $3 million for a Foreign Supplier Assessment Center -- which became the second MZM facility in his Fifth District when it opened in Martinsville two years ago. Court records also say Representative A wanted the facility to go to an economically depressed area in his district.

Court documents also list a number of contributions to Representative A from MZM employees that correspond to the dates and amounts listed in Goode's campaign finance reports to the Federal Election Commission.

In court Friday, Wade admitted that he circumvented laws that limited his contributions to $2,000 per election cycle by paying his employees to make contributions to the two unnamed members of Congress.

Officials with the U.S. Attorney's Office in Washington, D.C., who joined federal prosecutors in California as the Cunningham investigation expanded late last year, declined to say if Goode was Representative A.

"That's an excellent question, but I'm not sure we can answer it," said Channing Phillips, spokesman for the U.S. Attorney's Office in Washington, D.C. Department of Justice rules prohibit the release of someone's name in such circumstances unless they have been charged or have pleaded guilty, he said.

The Associated Press reported Friday that Representative B was identifiable from campaign finance records as Rep. Katherine Harris, R-Fla.

Phillips also declined to say whether the two unnamed lawmakers are under investigation by federal authorities.

"This is an ongoing investigation," he said. Wade, who was allowed to remain free on bond following his guilty pleas to bribery, conspiracy and election fraud, has agreed to cooperate with federal authorities as the probe continues.

However, Phillips pointed to comments from U.S. Attorney Kenneth Wainstein, who said during a press conference Friday that "it is important to note that Wade never informed either of the two representatives that the contributions ... were in any way illegal."

Goode's close relationship with Wade played a major role in the location of an MZM facility in Martinsville. Goode has said he requested a defense appropriation of more than $3 million for a Foreign Supplier Assessment Center, where classified employees conduct security checks on out-of-the-country sources of military equipment to the Pentagon.

After the contract went to MZM in 2003, Goode became closely involved in negotiations to bring the facility to Martinsville. According to records obtained earlier under the Freedom of Information Act, the congressman suggested an unusual agreement in which the city of Martinsville -- not MZM -- would be held accountable for up to $500,000 in state incentives if the company did not meet its hiring and capital spending projections.

Goode has earlier discounted suggestions that his role in the project amounted to a payback to MZM for the campaign contributions. All he was trying to do, Goode has said, was bring much-needed jobs to an economically troubled part of his district.

A three-paragraph statement from Goode noted that once problems about MZM surfaced in the media last year, he first offered refunds to donors and later decided to give to charity all his contributions that were linked to MZM.

At a press conference Friday, Wainstein said Wade's ability to influence lawmakers was initially hampered by federal laws that limit contributions from a single individual to $2,000.

To get around the law, Wade reimbursed his employees and their spouses for contributions they in turn made to the two lawmakers, the prosecutor said.

All together, Wade funneled $78,000 to the two representatives through 39 different "straw contributors," according to a copy of Wainstein's prepared comments provided by his office.

The money that appears linked to Goode -- $46,000 -- accounts for about half of his MZM-linked contributions.

MZM has since been sold to a private equity firm; the Martinsville facility is now operating as Athena Innovative Solutions.

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