Mitchell Wade's Plea
Here are early details of Mitchell Wade's agreement with prosecutors.
From the United States Attorney's Office press release just out:
Wade, 46, of Great Falls, Virginia, entered his guilty plea earlier today in U.S. District Court before the Honorable Ricardo M. Urbina to multiple felony counts related to his wholesale corruption of the defense procurement process. The conduct includes Wade making over $1 million in payoffs to then- Congressman Duke Cunningham, providing illegal benefits to Defense Department officials, and attempting to curry favor with two other members of Congress by making illegal campaign
contributions.
Much more:
Specifically, Wade pled to a four-count information, including one count of conspiring both to bribe Congressman Randall "Duke" Cunningham and to tax evasion; one count of Use of Interstate Facilities to Promote Bribery; one count of conspiring to deprive the Defense Department of the honest services of its employees; and one count of election fraud. Under the terms of the agreement, Wade, who has been cooperating with officials in this ongoing investigation, faces up to 135 months of incarceration.<snip>
Wade was able to exploit the procurement system in three distinct ways: by bribing a sitting United States Congressman; by conspiring to give favors to Department of Defense officials responsible for procuring services from Wade's company; and by funneling illegal campaign contributions to two Members of Congress.
According to the government's evidence, Wade grew his company, MZM, into a defense contracting company that, since 2002, received over $150 million in Department of Defense government contracts by engaging in a series of corrupt acts throughout the defense procurement process: from ensuring that the members of Congress who could appropriate funds for special Defense Department projects looked favorably on MZM, to the Department of Defense officials -- some of whom Wade knew when he was a government official -- who could give him favorable reviews and inside information to ensure that the work would continue to flow.
From the "Corrupt Activities within the Department of Defense" section:
One key to MZM's ability to receive government contracts was an umbrella contracting vehicle called "Blanket Purchase Agreement" and known in the field as a "BPA." A BPA is a contract vehicle that permitted the Defense Department and other departments and agencies to obtain supplies and services on an as-needed basis through a "charge account" system. Operating under a BPA, MZM and Wade were shielded from the normal competitive bidding process used in government procurement and could solicit business from government components directly.
In September of 2002, MZM received its BPA from the Defense Information Technology Contracting Organization, with the acronym "DITCO," making MZM eligible to receive up to $225 million by performing work for Defense Department customers.
The next step was for Wade to arrange for Defense Department officials to buy what he was selling. Wade extended his corrupt behavior into the Defense Department to ensure that the business kept coming regardless of MZM's performance. Wade, himself a former Defense Department employee, knew a number of individuals within the Defense Department who could help him. Wade convinced two Defense Department components, the Counterintelligence Field Activity (CIFA), located in Arlington, Virginia, and the Department of the Army's National Ground Intelligence Center (NGIC), located in Charlottesville, Virginia, to provide task orders that MZM could perform under the BPA.
Wade then shielded MZM from the normal performance review by crossing the line into corrupt activities. Wade's activities included:
In engaging in this corrupt activity, Wade deprived the citizens of the United States of their right to the honest services of government -- the right of the Defense Department to make decisions free from bias and favoritism.
- arranging for a Defense Department official's son to be hired as an MZM employee; the cost of that job was ultimately paid for by the government in reimbursement agreement with MZM; and
- extending an offer of employment, and then ultimately hiring, a Department of Defense official who was responsible for overseeing much of MZM's work. Federal law prohibits government employees from, among other things, discussing potential employment with companies with whom they do government business.
- Certain Department of Defense employees provided: valuable procurement information that MZM could use to tailor a proposal for work that MZM could perform under the BPA;
- an official recommendation that MZM receive contracts under the BPA for certain activities involving the imaging and archiving of Defense Department documents; and
- favorable performance reviews about MZM. These performance reviews were critical to MZM. Notwithstanding the fact that Wade received these purchase orders without competitive bidding as a result of his earlier receipt of the $225 million BPA, MZM could not be assured that they would continue to receive new purchase orders without receiving these type of favorable reviews by Defense Department officials.
From the "Illegal Campaign Contributions" Section:
Wade also made about $80,000 in illegal campaign contributions to the campaigns of two sitting Members of Congress. Wade targeted these two Members of Congress because he believed that these representatives had the ability to request appropriations funding that would benefit MZM.
Federal law prohibits campaigns from receiving more than $2,000 from any one individual per election, and prohibits entirely corporate contributions. Wade wanted to curry favor with these two members of Congress, so he needed a way around the campaign contribution laws. His solution was to have his employees and their spouses make contributions to these two campaigns under their own names, then reimburse them -- a technique, known as "straw contributions" that is a felony under federal election law when the straw contributions amount to over ten thousand dollars. He did so often by simply handing the employees cash – two thousand dollars for each person – and then immediately "asking" them to make a contribution. All in all, he made 39 different "straw" contributions, with 19 different employees or spouses. In order to maximize the impact of these contributions, Wade personally handed a number of the campaign contributions, in the form of personal checks from employees and their spouses, to one of the representatives.
After Wade made the campaign contributions, Wade asked that one of the Representatives and his staff request appropriations funding for an MZM facility. The Representative's staff later confirmed to Wade that an appropriations bill would include $9 million for the facility.
After making the illegal campaign contributions to the other Representative, Wade had a personal dinner with the Representative, in which the two discussed the possibility of MZM's hosting a fundraiser for the Representative later in the year, and the possibility of obtaining funding and approval for a Navy counterintelligence program. That program was never funded.
Wade did not inform the two Representatives that the contributions were illegal.















While the cheats and law breakers are being charged and punished let's not kill the contractual vehicles that are useful. A BPA is not by definition a bad thing. The government needs flexibility.
We are back to competence and integrity again.
February 24, 2006 11:19 AM | Reply | Permalink
While I agree with you factually, the government needs flexibility, it is hard to continue a proces like a BPA, when the trust has been significantly violated. And while the Republicans have shown a particular skill at being corrupt and operating at or beyond the limits of legality, once trust is violoated it is difficult to get it back.
I guess, I don't believe some democratic operatives wouldn't do the same thing if the opportunity of big bucks presented itself. We may really have to look at BPA as a process and either change some of its procedures to ensure better safeguards, or, we need to change it outright.
Somehow, we have to begin building trust back into our governing processes. With the Bush poll numbers very low, and the congressional poll numbers truly in the tank, some things simply must change or we will lose the few engaged citizens we have left in this country.
Beware of the fanatics, they never see gray.
February 24, 2006 11:32 AM | Reply | Permalink
Maybe we try the transparency approach.
or
Set/fix limits to use.
I cannot remember but I think there are some time and/or dollar limits on a BPS. If not that is an area of change. It these limits exist maybe we need to tweak the upper limit or how to extend the upper limit.
February 24, 2006 11:42 AM | Reply | Permalink
Transparency approach - I like it, and it is something the Democrats can truly offer in the way of reform. Transparency of government appears to have become a four-letter word for the Republicans, so we can also use this issue effectively in some of our campaigns.
Transparency of Government - should be one of the many new campaign slogans the Democrats begin using in the '06 mid-terms.
Beware of the fanatics, they never see gray.
February 24, 2006 11:49 AM | Reply | Permalink
Wow, that possible sentence range actually sounds low to me. I hope he's getting such a low sentence for cooperation, otherwise I don't really see the deterrent factor of a 11 year maximum sentence considering the temptation.
my reasoning on deterrence:
A potential crook like Wade is going to be in his late 30's to mid 50's. Comfortably wealthy already, any crime is of pure greed not need. Additional ife span is an expected 30-40 years with good medical care. A few years of crime yeild decades of luxury. There's also the "sex appeal" of the power. So the person stands to gain a huge lifestyle increase for decades, and that is the temptation.
The deterrent side? He only stands a small chance of being caught and a clever man will be confident in his abilities. Any corruption of lawmakers is fairly safe with power protecting it. If caught, of an 11 year maximum, maybe 7 or less is served in a minimum security federal institution like where Martha Stewart went. If caught at all. Then it's back to life probably still with money.
Is that light sentence and low probability for being caught really a deterrent against a a few years of crime leading to a long life of luxury? I don't see a big deterrence there.
When this is compared with penalties that petty criminals get, I don't see the justice. When it comes to justice in the judicial system, as blacks say, all they see is: “just us.”
None the less, glad they caught him and they'll catch more. It's a start.
February 24, 2006 12:34 PM | Reply | Permalink
So for someone who follows this story casually, do we know who the two Congressmen that received illegal campaign contributions are?
I assume Duke is one...who is the other?
February 24, 2006 12:38 PM | Reply | Permalink
via C&L, according to Roll Call...
"Wade also steered $78,000 in illegal contributions to the re-election campaigns of Reps. Virgil Goode (R-Va.) and Katherine Harris (R-Fla.) during the 2003-04 and 2005-06 election cycles. Neither lawmaker was aware that Wade was reimbursing other donors for making those contributions, according to the criminal information document."
Beauty, eh?
February 24, 2006 1:03 PM | Reply | Permalink
I'd like a little more experience with or research on deterrence for these white collar crimes.
Is there deterrence? What is it? Does quantity - be it years or dollars - increase the deterrence?
I don't know how it would work on this kind of corruption but I do know anecdotally that the personal liability of senior executives for the corporate violations of certain environmental regulations/laws get their attention [think the subject is hazardous materials/wastes]. What I don't know is if the liability ends up being dollars or dollars and time.
February 24, 2006 1:06 PM | Reply | Permalink
Thanks for the info.
With Cruella running for Senate, wouldn't it be great to take her down!
What about this Virgil Goode? What's he known for?
February 24, 2006 1:08 PM | Reply | Permalink
via opensecrets.com
MZM Inc
House Candidate Total Contribs Cunningham, Randy "Duke" (R-CA) $6,000PAC Contributions to Federal Candidates
2004 Cycle
Forbes, J Randy (R-VA) $5,000
Goode, Virgil H Jr (R-VA) $10,000
Harris, Katherine (R-FL) $10,000
Hunter, Duncan (R-CA) $1,000
Renzi, Rick (R-AZ) $2,000
Total to Democratic House Candidates: $0 Total to Republican House Candidates: $34,000
February 24, 2006 1:13 PM | Reply | Permalink
Don't overlook the local (non-federal) candidates.
Wade and MZM-entities gave $5,000 to DC Councilman David Catania (then a Bush-loving Republican, and a Bush-Cheney "Maverick [young Pioneer]) in 2002.
$5000 is a considerable amount in DC politics, especially coming from super-selective Wade who only gave to his elites.
Josh covered the story about a month ago, and no one has offered an explanation, yet.
http://www.talkingpointsmemo.com/archives/007525.php
Catania bolted the Republican Party after Bush rejected gay marriage.
February 24, 2006 2:28 PM | Reply | Permalink
As a Virginian, I can tell you that Virgil Goode (pronounced GEWD) is known to me as a simple-minded dolt. He talks like a hillbilly, and managed to convince people the same way Dubya did, that he is "one of them." He is in this for himself, and finally it is coming to light.
I understand that when one of his constituents asks for help with a government matter he sometimes writes a letter or makes a phone call.
Oh, and he also lobbied for MZ-whatever to get tax breaks and to avoid oversite.
...that is what he is known for.
Jan Knaus
February 24, 2006 4:15 PM | Reply | Permalink
Is there something about what the Republicans are doing that isn't out in the open? Transparency is no surrogate for changing people's lives. In swing states and districts, what we must campaign on and deliver is real and real simple: Better lives.
February 24, 2006 6:04 PM | Reply | Permalink
As a resident of Florida and a former resident of Harris's district and her hometown (Sarasota). I would like nothing better than to see her go down in flames. She is running against Senator Nelson a good man with a decent track record. When she showed up in our town's (Punta Gorda) Christmas parade I turned my back after making eye contact. She is an embarassment to Florida. I hope she vanishes from politics. She can alwysa live of the stock she apparently owns in Maybelline or become a Mary Kay salsperson.
Just Saying,
Carlton Noles
February 24, 2006 9:28 PM | Reply | Permalink
tlee -
The transparency suggestion was regarding ensuring public information on which companies who holds BPAs for what services/products with what federal agencies. To make it relevant this information should be kept up to date so that there is no hiding how much money is being paid to whom.
Transparency is not of value in and of itself in terms of improving government and therefore improving lives. What matters is how those of us outside government can use it to get the behavior we expect and punish those who fail.
February 25, 2006 9:34 AM | Reply | Permalink