It started with the bribery indictment of California Rep. Randall "Duke" Cunningham, but before it's over, a sprawling investigation into a Pentagon contractor called MZM could snare some of Washington's most powerful inside players
Wade had lots of other MZM contractors-many of them retired government officials or "govvies"-sprinkled throughout CIFA. "Wade had his 'in' everywhere," says a senior MZM executive. "He ran it as a clandestine operation against a company you'd want to infiltrate." At an MZM Christmas party, Wade asked his facility security officer to sit at the CIFA table and report back on conversations she overheard, according to MZM sources.
There were other problems. Burtt, Hefferon, and other CIFA officials were unhappy about MZM's sky-high labor rates. A CIFA employee collared Peze at an agency picnic one day. "We don't see you so often," the official told Peze, "given that you are billing 80 hours a month to CIFA." Peze was flabbergasted; he was billing only 40 hours a month, he thought. "I confronted Wade about that," Peze recalled. "He said, 'There has been a change. We just didn't tell you yet.'" Peze was outraged. "It was embarrassing for me personally to hear from CIFA officials that the contract was being billed 80 hours in my name."
"Chinese wall." Some government officials and MZM contractors blamed King, the former three-star general and MZM's CIFA program manager, for the company's bad image and resented what they perceived as his heavy-handedness. King, meanwhile, was starting to question Wade's business practices and "building a Chinese wall" between him and his boss, two former MZM officials say. Wade abruptly removed King as the program manager. King retreated briefly to MZM headquarters, then landed a position as an MZM consultant to Gen. Michael Hayden, then the head of the National Security Agency, now the director of the CIA. A former senior MZM executive says King was honest and ethical, and he believes that King was relieved to break away from Wade and the mounting problems at CIFA.
Despite the problems, it was still business as usual for Wade and Cunningham. Among other favors, Wade sold Cunningham a 1999 Suburban for $8,000 below market value. When his chief of staff confronted him, federal prosecutors say, Cunningham "furiously slapped his hand on his desk, twice, and yelled at his staffer to 'stay the f--- out of my personal business.'" In late fall of 2003, Wade bought Cunningham's Southern California home for $1.5 million so that the congressman could purchase a bigger mansion.
Wade's investment paid off handsomely. In mid-December, according to federal prosecutors, Wade told Pentagon officials that he had $16.1 million in "mandate money" for "data storage" that he wanted to spend on a second-floor conference center for CIFA. "Wade made it perfectly clear to the DOD officials that the money was his to spend, not theirs-and not on projects that they [DOD] determined were in the DOD's best interests," said prosecutors in Cunningham's pre-sentencing documents. On Feb. 20, 2004, Wade prepared a letter on Cunningham's congressional letterhead, which the congressman signed, thanking Pentagon officials for supporting the "collaboration center" program. Cunningham gave Wade "numerous blank sheets" of his congressional stationery, prosecutors said, "in order to enable Wade to draft letters on his behalf." In March, a Pentagon official refused to release the first $12 million of the earmarks or give "blanket approval" to Wade's schemes "with very little accountability or oversight that I can see." But using Cunningham's clout, Wade "successfully pressured" the official's supervisors to release the money, prosecutors said.