Josh Marshall

Josh Marshall is editor and publisher of TalkingPointsMemo.com.

Articles by Josh


So many shoes have been waiting to drop on the Duke Cunningham front that it was starting to look like an Imelda Marcos type situation.

But the Post has managed to pull them all together into one of those eye-popping Cash-n-Carry-Cunningham stories we've all come to know and love.

Back in the annals of Dukedom, you'll remember that before Mitch Wade bought Duke the Duke Stir, Duke lived on his own yacht, the Kelly C. But, as the story goes, Duke had that one off for repairs somewhere. And thus his current (or until last week current) stay on the Duke Stir. (About ten days ago, we told you that it seemed she was down in Alabama since her current registration lists Mobile as her current hailing port.)

Well, seems it's a tad more complicated than that.

Apparently Duke sold the Kelly C to a Long Island real estate developer named Thomas T. Kontogiannis back in 2002 for $600,000. Kontogiannis then spent about a $100,000 refurbishing Duke's boat. And for the last year or so he's been using it for dock parties on Long Island since the boat doesn't do so well in rough seas. But having poured $100k into the thing, Kontogiannis wasn't so sure he really wanted the Kelly C after all. So just before the house scandal broke last month, he was going to sell it back to Duke. (Apparently the unfortunate press attention has now scotched the deal.)

Now, you might imagine this would lead to all sorts of complications since Duke's old yacht would have be re-renamed and re-re-registered and so forth. But no so! Kontogiannis never got the boat renamed or registered. In fact Duke was so confident that he'd soon be buying the Kelly C back that earlier this year he'd already gone ahead and registered it in his name -- despite Kontogiannis's owning it -- using the address of the new home he bought at Rancho Sante Fe.

Now, about that home Duke bought.

There's always been a bit of a question where Duke scraped up the money to buy the thing. Public records suggest he paid cash. But even with the $1.675 million Mitch Wade gave him for the old house he was still almost a million short. So where'd the extra money come in?

According to the Post, Duke "asked if a mortgage company owned by Kontogiannis's nephew and daughter could finance $1.1 million in mortgages ... Kontogiannis said he recently paid off a $500,000 second mortgage on the Rancho Santa Fe home at the congressman's request, mostly with money he owed Cunningham for the yacht."

From here it gets so complicated I'm just going to have to quote from the Post at length ...

Kontogiannis said he went to a party on the Kelly C around 1995, when it was owned by another congressman, and liked the steel-hull craft. After Cunningham bought it 1997, for a reported $200,000, Kontogiannis said he told the congressman: "If you ever decide to sell it, I'd love to buy it."

Cunningham "called and asked if I was still interested" in buying the boat, Kontogiannis said. He did so, he said, after getting the boat appraised at $1.2 million. The developer said he financed the transaction by giving the congressman about $30,000, assuming the payments on an existing $140,000 bank loan and financing the remaining $425,000 as a personal note that accumulated interest at the prime rate. He said a family company, Axxion LLC, made the payments on the bank loan.

The congressman approached him again in 2003 when Cunningham planned to buy the Rancho Santa Fe home, Kontogiannis said. The congressman asked if Coastal Capital, the company the developer said is owned by his nephew and daughter, could finance the mortgage at its wholesale price, which had a slightly lower interest rate than retail mortgage lenders. The decision was "a slam dunk," Kontogiannis said, because the house had been appraised at $2.55 million.

Kontogiannis said Cunningham asked him last year to pay back the Kelly C loan, which was accruing interest at about 3 1/2 percent, by paying off the second mortgage on the house. Interest on the congressman's loan was accruing at 10 percent, though Cunningham wasn't making payments, he said.

The developer paid off the mortgage, he said, after Cunningham wrote him a check for $70,000 to make up the difference between what he owed on the boat and what Cunningham owed on the second mortgage.

That all sounds pretty above board, doesn't it?

Okay, let's get started here. Duke bought the Kelly C for $200,000. Five years later Kontogiannis gets it appraised for $1.2 million. Which prompts the question: Does Elizabeth Todd do boat work too? And if not, who was the fool who sold Duke the boat for a million dollars under value?

So Duke buys the boat in 1997 for $200,000 and, presumably because it's a collectible, five years later it had appreciated to $600,000. Or $1.2 million. But who's counting?

Late Update: A few readers asked, so just to be clear, the assumption that the Kelly C appreciated in price because it was a collectible was, yes, rather meant in jest.

'Patriotism is the last refuge of the scoundrel' poster-boy Cunningham cancels 4th of July events, holds firm on flag-burning amendment.

Mike Isikoff's piece on Rove's role in the Plame case is now up on the Newsweek website. But the picture it paints seems a bit murkier than what Lawrence O'Donnel suggested. For those of you who journeyed down this dark alley almost two years ago, you know that a lot turns on just when in the timeline someone mentioned Plame's name, who went first, just what they knew, and various other details.

What's implicit in Isikoff's report, however, and in the Tribune too, is that the special prosecutor, Patrick Fitzgerald is after Rove for some felony arising out of the case (perjury after the fact? conspiracy?) but not the immediate and original act of leaking the name.

There's one other point worth noting here. As we've seen, federal law recognizes no reporters' privilege or confidentiality. But if recollection serves, there are DOJ guidelines which say that prosecutors should exercise a great deal of discretion when trying to compel testimony from journalists. They're not supposed to do it just to tie up a few loose ends, but only if there's real and significant crime they're trying to prosecute. And before they do so, they're supposed to have exhausted all other possible ways to get at the information.

Now, I'm away from my office. And it's the holiday weekend, so I can't get an expert on the phone to confirm that recollection. So leave that as a contingent assertion. If it turns out I've misrecollected this I'll let you know in a subsequent post. But I think I remember it correctly.

Now, you'll also remember that a couple months back the usual ducks on the right were clucking about the whole investigation coming to an end -- and apparently the whole thing had come to nothing.

That particular cluck never quite computed to me because Fitzgerald shouldn't be pressing matter of jailing journalists unless he thinks he's on his way to prosecuting a serious crime.

So just a question: Would Fitzgerald have pushed to get Cooper and Miller in the slammer if some other party in the White House weren't in a lot of trouble?

And one last question: Cooper and Miller are very different kinds of journalists, swim in very different waters. Are they really in this jam for the same reasons?

I'm told Lawrence O'Donnel said on McLaughlin Group tonight that Matt Cooper's notes will show that Karl Rove was the leaker of the Plame information. That would certainly be an interesting development, if not exactly surprising.

(The claim at least has now been confirmed here.)

One other note along these lines.

I've gotten hints or suggestions from several sources over the last month that new information is bubbling to the surface, not about who leaked Valerie Plame's identity, but who was behind the underlying caper that started the whole drama afoot in the first place: those phoney Niger uranium documents.

As longtime readers of this site know, last year colleagues of mine and I were able to trace the documents back to a former Italian intelligence agent named Rocco Martino. Martino was the 'Italian businessman' who tried to sell the documents to Elizabetta Burba, the journalist who eventually brought them to the US Embassy in Rome.

We were able determine that the documents had been put into Martino's hands by a then-serving member of SISMI -- Italian military intelligence. And this SISMI colonel had done so using a women working in the Niger embassy in Rome, an Italian national, as a cut-out.

This was, as you might imagine, more than enough to make us want to know a lot more. But we were never able to develop any conclusive proof about who or what was behind the SISMI colonel or what the backstory was within SISMI.

Suspicions, we had plenty. But in terms of hard facts, we hit a wall just inside SISMI.

Just who forged the documents? And, more significantly, who put the whole process in motion? And why had SISMI or elements within it involved themselves?

It turns out the use of the word 'raid' for the search on Duke Cunningham's Rancho Santa Fe home was well-chosen. According to a piece just out in the North County Times, the feds who showed up at the house broke the locks on the front door to gain entry.

Now, as you might expect, Duke's lawyers are crying foul, charging the investigators with grand-standing and "an appalling abuse of government power." And I must confess that I was a bit surprised at the rapidity and the no-nonsense style of these raids today at what something like a half dozen locations across the country. (If I'm not mistaken, investigators conducted simultaneous raids/searches at MZM HQ (DC), Mitch Wade's home (DC), Duke Cunningham's home (SD), the Duke Stir (DC) and perhaps other locations.) I think those of us not intimately familiar with law enforcement tactics are often surprised when we see people in power given the same treatment ordinary targets of criminal investigations are given everyday.

That said, this is a United States Congressman. And to the extent there's any politicization at DOJ or the Pentagon, I really doubt it's anti-Duke. So what's up exactly?

Along those lines I noticed this snippet at the end of the piece in the North County Times ...

Back in Washington, Keith Ashdown of the budget watchdog group Taxpayers for Common Sense said he was surprised at the government's actions.

"There must be some reason why they had to move this quickly," said Ashdown, the group's vice president of policy and communications. "Remember, this is a U.S. congressman."

It doesn't speak directly to the question. But there's also this passage in the report out in tomorrow's WaPo ...

The search warrants were executed at the company's headquarters two weeks to the day after an MZM official who worked closely with Wade shredded a large stack of documents on the third floor of MZM's Washington headquarters, two sources with knowledge of the incident said independently yesterday. They said the official destroyed the documents on June 17 in a waist-high machine during Wade's final hours in the office, an act that one source described as "weird" because of the timing.

Wade and his attorneys agreed the previous evening that he would surrender control of the company to other senior MZM officials, and they also agreed that he could pack up his office papers at a set time on June 17, one of the sources said. But Wade angered the firm's new managers by arriving earlier than agreed, according to this source. Both sources said he was in the building when the shredding occurred. The nature of the destroyed documents could not be learned, and the executive who did the shredding did not reply to phone calls and e-mails seeking his comment. The shredding was halted when it became apparent to the new company managers, the sources said. Another senior MZM official affixed a note to the door in mid-morning that day, ordering employees of the company not to enter the room where the machine was located, they added. Wade was eventually permitted to take other documents from the building in boxes, under the supervision of company attorneys, the sources said.

Now, one other snippet that may or may not be related. Down in the depths of the A section in tomorrow's Post (A18) is a piece by the irreplaceable Walter Pincus. As Pincus explains, John Negroponte, the new intel czar is going to take a look at changes made at the Army's National Ground Intelligence Center, the site of that titanic screw-up over the aluminum tubes. And down at the end of the piece Pincus discusses MZM's role as contractor at the NGIC ...

On Oct. 18, 2002, MZM got the first of what would grow to be a series of orders for NGIC work. This initial one was for a seven-week, $194,000 study analyzing a computer program concept called "FIRES," according to material provided by the Pentagon. FIRES was a program first suggested by an NGIC employee who believed that if U.S. operatives around the world collected blueprints of important buildings worldwide, an important intelligence database could be developed.

At the time, the NGIC's senior civilian employee and executive director was William S. Rich Jr. Rich had been the top civilian official at the NGIC since its inception in 1994. In September 2003, Rich retired from the NGIC and thereafter went to work as senior executive vice president for strategic intelligence for MZM, according to former NGIC colleagues and Pentagon documents. Rich has not returned telephone calls, and MZM has refused to comment on its NGIC work.

Other NGIC employees have been hired by MZM. The former sergeant major at the NGIC, George A. Peeterse, is an MZM vice president. Contacted by telephone at home last week, Peeterse declined to discuss MZM or the NGIC. "We have been told to refer all questions to MZM headquarters in Washington," he said.

More on this tomorrow.

With so much DOJ heat coming down on Duke Cunningham you'd almost think he was a Democrat.

Late word has it that twenty federal agents raided Duke's place in Rancho Santa Fe this afternoon. Just so you can keep track, that's the place he bought with Mitch Wade's cash, not the place he sold Wade. And that comes on the heels of the raids earlier in the day at MZM headquarters and down at the Yacht Club on the Duke Stir.

One other point to note: In each of these raids, on hand have been personnel from the Defense Criminal Investigative Service.

As you'd expect from the title, those are the DOD's cops, specifically, the investigative arm of the Pentagon Inspector General's office. They're not there because some backbencher like Duke got paid too much for his house. Almost certainly, they're there because of military contracting fraud, or the suspicion thereof.

And tell me this isn't related to the Pentagon decision earlier this week to halt all new work for MZM, Inc. Just a new interpretation of some obscure contracting, right?

There's an OpEd today in the Post about torture, the US military and the medical profession. It's by Burton Lee, presidential physician to the first President Bush. I really recommend it highly.

This is a passage from a piece Ed Kilgore did today at TPMCafe ...

This appointment represents the giant balloon payment at the end of the mortgage the GOP signed with the Cultural Right at least 25 years ago. Social conservatives have agreed over and over again to missed payments, refinancings, and in their view, generous terms, but the balance is finally due, and if Bush doesn't pay up, they'll foreclose their entire alliance with the Republican Party.

Sure, they care about other issues, from gay marriage to taxes to Iraq, but abortion is the issue that makes most Cultural Right activists get up in the morning and stuff envelopes and staff phone banks for the GOP. And for decades now, Republicans have told them they can't do anything much about it until they can change the Supreme Court. With a pro-choice Justice stepping down, the subject can no longer be avoided. And thanks to the Souter precedent (and indeed, the O'Connor and Kennedy precedents), there's no way Bush can finesse an appointment that's anything less than a guaranteed vote to overturn Roe.

This is no great day for Dems. <$NoAd$>And I'm not sure Bush really cares. But this is a tricky day for the institutional Republican party too. Not the wingruts -- happy days are here again for them, or whatever the culturally-appropriate metaphor might be. But for the folks who run for election in big expanses of the country, not a good day.

Like Ed says, the bill's come due.

TPM Reader mail ...

Atrios is correct that Casey was a 5-4 decision. But what he apparently isn't aware of is that one of the dissenters (Byron White), was subsequently replaced by a pro-Roe/Casey justice. Even without O'Connor, there are still five justices on the court who are on the record as favoring at least some kind of constitutional right to termination a pregnancy. Those five are Ginsberg, Breyer, Stevens, Souter and Kennedy. Sure, Kennedy's vote can't be counted on in the more extreme cases, like partial birth abortion. But unless he flip flops (which seems increasingly unlikely after his decision on sodomy), he's still going to strike down anything that resembles a ban on abortion.

Passed on without comment.

(ed.note: Just to be clear, I post this as a correction to my earlier post below.)

Feds bust MZM headquarters and Duke Stir.

Duke better make his pleadings now while O'Connor's still on the Court and there's a few criminal rights left ...

From Roll Call: "A federal task force that includes officials from the U.S. Attorney’s offices in both Washington, D.C, and San Diego, the FBI, Internal Revenue Service and Defense Criminal Investigative Service conducted the searches, according to Debbie Weierman, a spokeswoman for the FBI’s Washington office."

(ed.note: Roll Call's got the original story. If you don't have a subscription, see the link above.)

Late Update: Yet more from the North County Times.