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
Wilkes and Wade, prosecutors say, then supplied substandard "off the shelf" hardware, for about $1.5 million. "We complained about that to the contracting officer," Hefferon told U.S. News, "and said they owed us approximately $4 million." MZM sources say Wade brought Cunningham unannounced to CIFA headquarters to put the squeeze on Burtt and Hefferon, which made them furious. "I talked to him, as did the contracting officer and the chief of staff," says Hefferon, "and told him it was inappropriate."
No matter. The collaboration center deal resulted in a big payoff for Cunningham: Prosecutors say Wilkes wired $525,000 to Kontogiannis, the Long Island businessman, who used it to pay off Cunningham's $500,000 second mortgage for his new home in Rancho Santa Fe. Wade sent a check via Federal Express for $115,100 to pay for Cunningham's capital-gains tax on the sale of his old house. Wade paid $11,393 to move Cunningham's furnishings from his condominium in Arlington, Va., which prosecutors say "was literally stuffed" with furniture and antiques. Cunningham signed the packing slip as an employee of MZM.
In August, Wade wrote two checks totaling $500,000 to pay off the remainder of the mortgage on Cunningham's new mansion. He wrote the checks to Cunningham's military memorabilia business. Wade finally sold Cunningham's old house, after it sat on the market for eight months, at a $700,000 loss.
It was well worth it, however, because that year, MZM obtained $65 million in Pentagon business. "It was bizarre,"a federal law enforcement official told U.S. News. "They had wildly diverse contracts; there was no capability for some of the stuff they got; there was no coherence to who they were. It was the tail wagging the dog."
Wade was building up the firm so rapidly that MZM's security personnel were logjammed making new employee identity cards. The editors of the Sentinel had to add an extra page to list the new hires each month, and the employee birthday list kept growing longer. But along with the explosive growth came change, in MZM and in Wade. "Early on he was inclusive, almost like an uncle," says IT program manager Rubin. "By 2004, he was like an alien, cold, distant."
Perhaps it was because Wade was going broke, thanks to the exorbitant salaries, the lavish lifestyle, Cunningham's ceaseless demands for money, and an utterly lousy accounting system. Wade had a crude, money-in, money-out, debit system for MZM. He locked the checkbook in a safe in his office and handwrote every single check. "He was a one-man operation," says one knowledgeable source, "to the end."
"Rich man." At the end of each month at MZM, it was pure chaos. "There would be bills spread all about, he would be screaming and yelling about how much money we were spending, but he was the only one spending all the money," says a former senior executive. "He wanted so much to live the rich man's life, and he couldn't stop himself."
By late 2004, morale was at an all-time low. But many MZM employees were afraid to leave, because they had heard Wade had messed with the security clearances of several employees whom he had forced to resign. In spring 2004, Wade asked Melkessetian to return to Iraq as the CIFA liaison. Melkessetian said no, for health reasons, and says he was asked to leave the company. For two years, says Melkessetian, prospective employers told him that they were unable to locate his security clearance. The day Wade pleaded guilty, Melkessetian says, his clearance popped up again. "The evidence clearly implies that Wade retaliated against employees," says Melkessetian's attorney, Mark Zaid, "by sabotaging their security clearances."