Feds Probe Calif. Pol Over Real Estate Deal

Former top gun Navy pilot and current eight-term Rep. Randy "Duke" Cunningham (search), R-Calif., is under federal investigation over a real estate deal and his relationship with a defense contractor.

Cunningham announced on the House floor Monday that the Imperial County, Calif., Superior Court has served him with four subpoenas. Under House rules, members must inform the House when they receive a subpoena.

FBI (search) investigators want to know whether Cunningham, who sits on the House Defense Appropriations Subcommittee, has been involved in improper financial and real estate dealings with defense contractor Mitchell Wade (search), head of MZM Incorporated. (search)

Of particular interest is the sale of the Cunningham's Del Mar, Calif., home in 2003. By most estimates, the property was worth around $1 million at the time. However, Wade bought the property for just under $1.7 million, which enabled the congressman to buy a much nicer $2.5 million dollar home in Rancho Santa Fe. Wade did not fare as well, selling the house he bought from the congressman for about a $700,000 loss a year later.

However, while Wade may have lost big money in his real estate dealings with Cunningham, MZM has done well by being awarded defense contracts worth $41 million in 2003 and $65 million in 2004.

One congressional watchdog told FOX News he believes the whole thing smells bad.

"If it looks like a bribe, it smells like a bribe, it's a bribe. This was a powerful defense contractor, looking to buy influence at the highest levels of congress, and he did that and he profited handsomely from it," said Keith Ashdown, vice president of Taxpayers for Common Sense.

But Cunningham's relationship to Wade does not end there. Wade owns a 42-foot yacht that is parked in the Capitol Yacht Club just blocks from Capitol Hill. It's primary resident is Cunningham, who claims, but so far has been unwilling to demonstrate, that he leases the boat.

Cunningham and Wade's relationship also extends to charity. MZM donates to an organization known as the Sure Foundation, whose president is Christiane Wade, the contractor's wife. Nancy Cunningham, the congressman's wife, and their daughter April sit on the foundation's board of advisors.

Cunningham's office did not answer questions about this matter on Monday. His spokesman said the congressman will discuss his dealings with Wade when he feels the time is right and no sooner.

Click in the box near the top of the story to watch a report by FOX News' Brian Wilson.