By Mark Walker, The North County Times, September 19, 2005
20 Sep 2005 // More than $650,000 in campaign funds controlled by U.S. Rep. Randy "Duke" Cunningham should be available to help pay his legal bills, according to the Federal Election Commission's Office of General Counsel.
The five-member commission that governs the watchdog agency is scheduled to consider the issue when it meets Thursday in Washington, D.C.
Cunningham, 63, is the subject of an ongoing San Diego federal grand jury investigation over his dealings with two defense contractors, ADCS of Poway and MZM Inc. of Washington, D.C. His legal bill is expected to run well over $1 million.
"I'm very pleased," Kenneth Batson, longtime treasurer of The Friends of Duke Cunningham, said of the commission counsel's opinion issued Monday.
If approved, the ruling would be in line with past decisions that have allowed members of Congress facing legal troubles to use the campaign funds to help pay their legal bills.
Not so pleased was Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a nonpartisan watchdog group that had filed a letter with the commission opposing use of the campaign money for legal costs.
"It was completely expected," Sloan said. "We sent in our views and they, of course, ignored them."
In mid-July, Cunningham announced he would not seek a ninth term in Congress because of the grand jury probe. A few days later, the Escondido Republican sought an advisory opinion from the election commission that would permit him to use the money that was intended to support a re-election bid to pay his defense lawyers.
Last week, the House of Representatives Committee on Standards of Official Conduct, also known as the ethics committee, gave Cunningham approval to establish a legal defense fund separate from his campaign account.
Legal defense funds allow corporations, individuals and unions to make contributions of up to $5,000 a year. Batson also has been named as trustee of that fund and said he expects it will be established by the end of this week.
"We have some people who have already committed to donating to that and we will be notifying friends and acquaintances who have said they want to contribute," Batson said, adding he could not immediately name any of the prospective contributors.
The contributors will eventually be identified through quarterly reports required of legal defense funds and made available to the public.
In the advisory opinion regarding use of the campaign funds, the commission attorney's proposed order reads: "The commission concludes that the Committee may use campaign funds to pay for the legal fees and expenses incurred in connection with the grand jury investigation and legal proceedings that may arise from this investigation because the investigation concerns allegations that are directly related to Representative Cunningham's campaign activities or his duties as a Federal officeholder."
The U.S. attorneys' office in San Diego is leading the grand jury probe and has alleged that Cunnningham "demanded and received" a bribe from MZM founder and former owner Mitchell J. Wade. That transaction is alleged to have occurred in the form of Wade's 2003 purchase of Cunningham's home in Del Mar Heights for $700,000 more than he would sell the same property for some 11 months later.
Cunningham has denied wrongdoing but said he exercised "poor judgement" in the home sale.
Wade, who Cunningham has described as a friend and whose company saw its contracts with the Defense Department swell around the time of the home sale, has declined comment.
ADCS officials have said they are cooperating with the investigation and declined further comment.
Batson said he talked with Cunningham recently and said the congressman, whose 50th Congressional District includes most of North County, was "sad about the situation.
"But I think he is doing OK and he is still doing the job he was elected to do. He will keep doing so right up until the end but he does have regrets that he won't be involved anymore."