FEC levies $1 million fine on man

There was no evidence Rep. Virgil Goode knew the funds were illegal, the FEC said.

1 Nov 2007 // The Federal Election Commission has levied a $1 million fine against a defense contractor who made illegal campaign contributions to U.S. Rep. Virgil Goode.

The penalty against former MZM Inc. owner Mitchell Wade, who worked with Goode to bring a now-defunct military intelligence center to Martinsville, is the second-largest of its kind, according to the FEC.

Wade has pleaded guilty to illegally funneling $78,000 in campaign contributions to two candidates -- Goode and former Rep. Katherine Harris of Florida -- in hopes of currying favor in Congress for his defense projects.

Goode, R-Rocky Mount, has said from the beginning he had no idea the contributions were illegal. Federal prosecutors have said only that Wade did not tell the congressman as much.

According to an FEC statement released Wednesday, the commission found no evidence that Goode or Harris knew the contributions were illegal.

As part of a separate investigation by the FEC, Wade admitted to violating the Federal Election Campaign Act.

Not long after questions about the money arose in late 2005, Goode donated about $90,000 in MZM-linked money to charitable organizations in his 5th Congressional District.

Wade has admitted that he paid his employees to contribute to Goode's re-election coffers. By funneling about $46,000 in company money through his employees, Wade skirted a law that limited his own contributions to the congressman to $2,000 per election cycle.

One of the MZM officials who participated in the scheme was Richard Berglund, head of a Foreign Supplier Assessment Center that the company operated for several years in Martinsville.

Berglund, who last year was convicted of a misdemeanor and fined $2,500 for his relatively minor role in the scheme, agreed to pay an additional $42,000 to the FEC as part of its investigation.

Critics of Goode's close relationship with Wade have noted that at the same time the congressman was receiving money associated with MZM, he was working to secure millions in federal funding for the company's operation in Martinsville.

Goode has said his only intent was to bring good jobs to his district.

MZM's Martinsville operation, which investigated the backgrounds of foreign military equipment vendors doing business with the Pentagon, closed last year after generating about a third of the 150 jobs promised by Wade.

Wade, meanwhile, is awaiting sentencing as federal authorities continue to investigate illegal actions involving his business.

"We are gratified to learn of the FEC's disposition of this matter," said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a watchdog group that filed a complaint in the case.

"As the presidential campaign season progresses, a fine of this magnitude should serve as a warning to all political donors that violating federal campaign finance laws has serious consequences."