CAPITOL CROOKS

Capitol Crooks

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If Wade and Cunningham had their way, last year would have been another big year. Instead, all hell broke loose. On June 12, 2005, the Copley News Service and San Diego Union-Tribune reported that Wade had taken the $700,000 loss on the Cunningham house. It wasn't long before the FBI and the Internal Revenue Service were on the case. In late June, Wade spent a weekend at MZM packing boxes. His employees later reported that documents were shredded in a room with a sign on the door that said "Stay Out." On July 1, federal investigators simultaneously raided MZM, Cunningham's ranch, and CIFA, seizing documents and computer hard drives. Soon after, Wade began cooperating with the feds.

That was the beginning of the end. Wade withdrew money from MZM coffers to pay for his high-priced defense team, then he had to scramble to get tens of thousands of dollars in loans against invoices to make payroll, former MZM employees say. Looking back, there remains one more intriguing question: Did Wade turn Cunningham into a bribee, or did Cunningham make a briber out of Wade?

Eventually, King, the former general, came back from his exile at the NSA and took over the company. In August, Veritas, a venture capitalist firm, purchased "selected assets" from MZM for $20 million and named the new company "Athena Innovative Solutions Inc." after the goddess of war and wisdom. "MZM has been reflagged," says Melkessetian, "like the pirates in the Caribbean reflagged ships that they captured."

At his plea hearing in February, Wade expressed remorse for his actions. "I feel deep sorrow for the harm I have caused my family, friends, and former colleagues," he said. Embittered MZM employees say it's all a self-serving act. "He's not repentant at all," says a former executive. "In his mind, it's, 'I got caught.'"

To contact the author: cragavan@usnews.com

With Edward T. Pound, Danielle Knight, Carol S. Hook, Monica M. Ekman and U.S. News & World Report Library

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