It’s always curious how some people succeed wildly in one line of business and then fail just as miserably in another.
A fine example seems to be that of Mitchell Wade.
Wade is the owner of MZM, Inc., a defense contractor, which says on its website that it has “Offices in Washington, D.C.; Baltimore, Md.; Charlottesville, Va.; Tampa, Fla.; Martinsville, Va.; San Diego, Calif.; Seoul, South Korea; Stuttgart, Germany; and Baghdad, Iraq.”
Back in November 2003, Wade was apparently looking for a house to purchase and ‘flip’ in the San Diego area. So he purchased the San Diego home of Rep. Randy “Duke” Cunningham (R), a prominent member of the House Appropriations Committee’s Defense Subcommittee, for $1,675,000.
But pretty much from the start Wade dealt himself deep in the hole because he turned around and put it right back up for sale at about the same price. As you can see, here Wade severely constrained his ability to profit from reselling the house because he was offering to sell it for the same price he’d just bought it for.
But things only got worse from there.
As this article in today’s San Diego Union-Tribune explains, the house sat unbought and unoccupied for 261 days. And Wade had apparently seriously overestimated the value of the property.
When the place finally sold, it went for only $975,000, thus saddling the unfortunate Wade with a loss of some $700,000.
I guess it goes without saying that that experience probably soured Wade on the real estate game for good.
But at the same time as all this was happening, according to the article, Wade’s defense contracting business started going like gang-busters. In the words of the article, “Wade, who had been suffering through a flat period in winning Pentagon contracts, was on a tear â reeling in tens of millions of dollars in defense and intelligence-related contracts.”
(Cunningham is also a member of House Permanent Select Committee on Intelligence.)
Now, it seems some pesky government do-gooder types are asking whether something might not have been quite above board about all this. When the Union-Tribune tried to get in touch with Wade, it turned out he was “traveling without access to a telephone.” But MZM official Scotty Brumett explained that — contrary to what I had assumed — the purchase was not part of a money-making venture but the company’s effort to raise its profile in the San Diego area: “We were looking at expanding our company presence in San Diego. We looked at the property and thought it would work for us. But after we bought it, we realized that it did not meet our security or our corporate needs.”
Meanwhile, Cunningham told the paper that “My whole life I’ve lived aboveboard. I’ve never even smoked a marijuana cigarette … I feel very confident that I haven’t done anything wrong.”
Cunningham told the paper he couldn’t discuss the contracts he’d helped MZM land because they were “very, very classified.”