Is this why Porter Goss resigned as CIA chief?

Sex, Lies, and Government Contracts

5/07/06 -- -- The most extensive federal corruption scandal in a century is growing. In March, former Rep. Randy "Duke" Cunningham (R-CA) was sentenced to more than eight years in federal prison (the longest sentence ever given to a member of Congress) for accepting $2.4 million in bribes in exchange for lucrative defense contracts. Yet Cunningham's crimes, the "magnitude and duration" of which are compared to the Teapot Dome scandal of the 1920s, may end up a mere prelude.

According to recent reports, federal investigators have traced the outlines of a far more extensive network of suspected corruption, involving multiple members of Congress, some of the nation's highest-ranking intelligence officials, bribery attempts including "free limousine service, free stays at hotel suites at the Watergate and the Westin Grand, and free prostitutes," tens of millions of dollars in federal contracts awarded under dubious circumstances, and even efforts to influence U.S. national security policy by subverting democratic oversight.

The ringleader

At the center of the storm is California defense contractor Brent Wilkes -- aka "Co-Conspirator #1" in government documents -- "who gave more than $630,000 in cash and favors" to Cunningham "for help in landing millions of dollars in federal contracts." Wilkes devoted much of his 20-year career to "developing political contacts in Washington," a task at which he excelled, serving recently both as a county finance co-chairman of Gov. Arnold Schwarzenegger's (R-CA) campaign and as the state finance co-chairman for President Bush. "Wilkes, his family members and his employees were heavy campaign contributors to several members of Congress," and he frequently invited members -- including Cunningham, Rep. Tom DeLay (R-TX), and House Speaker Dennis Hastert (R-IL) -- on chartered corporate jets.

The efforts paid off handsomely: "Wilkes won tens of millions of dollars worth of defense contracts for his companies through the process of closed-door congressional earmarking of the federal budget." Indeed, "many of the contracts Wilkes secured" were for projects the Pentagon never even requested. Wilkes has thus far avoided any criminal charges, but federal officials are investigating instances of quid pro quo, since the "timing of Wilkes' many political donations closely parallels the approval of earmarks for Wilkes' companies."

'Red lights on Capitol Hill'

For more than a decade, Wilkes curried favor with lawmakers and CIA officials by hosting weekly parties at lavish hospitality suites at the Watergate and Westin hotels in Washington. Guests would gamble, socialize, and sometimes receive prostitutes; according to Harper's magazine, the festivities "began early with poker games and degenerated" into what one source described "as a 'frat party' scene -- real bacchanals." Mitchell Wade, another defense contractor who pleaded guilty in February to bribing Cunningham, has "told federal prosecutors that he periodically helped arrange for a prostitute for the then-congressman."

But investigators are digging for more: FBI agents "have fanned out across Washington, interviewing women from escort services, potential witnesses and others who may have been involved in the arrangement," attempting to determine "whether any other members of Congress, or their staffs, may also have used the same free services." Last week, a reporter for the San Diego Union-Tribune said that "as many as a half dozen other Congressmen" may ultimately be implicated in the scandal. (Several have already denied ever attending Wilkes' parties.) Also, investigators are reportedly "trying to determine whether Cunningham and other legislators brought prostitutes to the hotels or prostitutes were provided for them there"; there is speculation that Wilkes may be subject to felony federal sex-trafficking charges if the Virginia-based limousine service he used transported the prostitutes into Washington.

CIA's third in command admits he attended parties

The highest-ranking CIA official to admit he attended the poker parties thrown by Wilkes is Executive Director Kyle "Dusty" Foggo, the agency's third-ranking official. (Foggo even "occasionally hosted the poker parties at his house in northern Virginia," though he denies ever seeing prostitutes at the gatherings.) Foggo's relationship with Wilkes goes back 30-plus years; the two were roommates in college, best men at each others' weddings, and even "named their sons after each other."

By the 1980s, Foggo had joined the CIA and "was sent to Honduras to assist the Nicaraguan Contra rebels," where his "position was essentially a contracting officer -- he could get anyone anything they needed." Meanwhile, Wilkes had established himself in Washington and made his living "ferrying congressmen to Central America, where he would introduce them to Foggo and the Contras." Foggo's connections to Wilkes and fellow contractor Mitchell Wade are now the focus of an investigation into CIA contracts by the agency's inspector general, first made public in March. One of Wilkes' companies, Archer Logistics, won a contract to provide supplies to CIA agents in Afghanistan and Iraq despite having "no previous experience with such work, having been founded a few months before the contract was granted."

CIA director Goss tied to scandal?

Last week, Harper's magazine reported that party-goers "under intense scrutiny by the FBI are current and former lawmakers on Defense and Intelligence committees -- including one person who now holds a powerful intelligence post." CIA Director Porter Goss is perhaps the only individual who fits such a description. ("This is horribly irresponsible. He hasn't even been to the Watergate in decades," a CIA spokeswoman said. When asked if Goss had attended Wilkes' parties at the Westin or other locations, she repeated the denial. "It's horribly irresponsible. Flatly untrue.") But the alleged links between Goss, Foggo, and Wilkes have led some to return to questions raised when Goss initially selected Foggo to be executive director in November 2004.

At the time, the decision was viewed with skepticism since Foggo's previous position was as a "midlevel procurement supervisor," and because following his unexpected selection, "Porter Goss lieutenant Patrick Murray went to then-Associate Deputy Director of Operations for Counterintelligence Mary Margaret Graham and informed her that if anything leaked about other Goss appointments -- in particular, Foggo's -- she would be held responsible." Project on Government Oversight fellow Jason Vest reported last week that much of Foggo's counterintelligence file "has to do with various social encounters over the years, none of which he's been deceptive about when polygraphed, and all of which have been deemed to be of no threat to operational security -- but are still the types of things that could be embarrassing for Goss and the Agency." Vest suggests the latest reports raise important questions about the "relationship between Foggo and Wilkes, and the relationship of each with Goss."

Even the limo service is corrupt

Another piece of the puzzle is Shirlington Limousine and Transportation Inc., the firm that Wilkes used to "transport congressmen, CIA officials, and perhaps prostitutes to his Washington parties." Shirlington's president, Christopher Baker, has a "lengthy history of illegal activity," detailed in his 62-page rap-sheet which "runs from at least 1979 through 1989 and lists charges of petty larceny, robbery, receiving stolen goods, assault, and more." Shirlington Limo also "operates in what looks to be a deliberately murky way. The limo company does business under at least four different names; in addition, the office addresses listed on its business filings regularly change. A number of those office addresses are actually at residential buildings or business suites, and calls to the listed phone numbers are taken by an answering service."

The company was sued in 2004 for failing to make payments on buses it had purchased, has received eviction notices from its offices, and even had its federal license revoked by the Federal Motor Carrier Safety Administration in both 2001 and 2004. Despite all of this, the Department of Homeland Security last fall awarded Shirlington a $21 million contract "to provide transportation, including limo service for senior officials." Shirlington also won contracts "with the Department of Housing and Urban Development (for $519,823) and...the Federal Highway Administration (for $142,000)." What role did Wilkes play in Shirlington receiving these federal contracts?

The Defense Appropriations Committee 'Cabal'

A common thread links the members of Congress that Wilkes courted most aggressively, such as Cunningham and Reps. Jerry Lewis (R-CA), Duncan Hunter (R-CA), and John Doolittle (R-CA). All were (or still are) on subcommittees overseeing defense and intelligence spending. On Monday, prominent conservative strategist Ed Rollins described the main players in the scandal as a "real little cabal on the defense appropriations committee." In particular, the House Appropriations subcommittee on defense is "aggressively courted not just by defense contractors, but by lobbyists for foreign governments interested in swinging US defense spending in certain directions," investigative journalist Laura Rozen notes. "It is really where the checks are signed, and decisions about funding sometimes wholly un-debated aspects of U.S. national security policy are made."

Indeed, many of the figures tied to the scandal have histories of involvement in reactionary conservative elements of U.S. foreign policy: Kyle Foggo worked extensively with the Nicaraguan contras, Mitchell Wade headed a White House-contracted group called the "Iranian Democratization Foundation", and Wilkes was reportedly set to receive a contract to "create and run a secret plane network" for the CIA before his links to Cunningham were made public. The roots of this scandal may be as much in profiteering as they are in "this club's conviction that the law is an impediment to the national security cause, that the way to run things is through these informal networks.

-- The Progress Report (American Progress Action Fund)

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