Rep. Randy "Duke" Cunningham (search) said Thursday he showed "poor judgment" in selling his house to a defense contractor who later sold the San Diego-area property for a big loss. But the Republican said he acted honestly and contended any investigation would prove that.

The U.S. Attorney's Office in San Diego is investigating the house sale with help from the FBI (search), according to a law enforcement official who spoke on condition of anonymity because the probe is ongoing.

"I showed poor judgment in selling my home in Del Mar to a friend who does business with the government," Cunningham said in a three-page statement, his first public accounting of his relationship with defense contractor Mitchell Wade (search) since news of the real estate deal surfaced nearly two weeks ago.

Wade lost $700,000 on the house deal, even as his company, MZM Inc. (search), began receiving more federal contracts.

"At the time of the sale, I failed to adequately consider how this transaction might be perceived by others who don't know me," wrote Cunningham, a member of the appropriations subcommittee that controls defense contracting dollars. "I would never put the interests of a friend or a contractor above the interests of my country. I trust that the facts will bear out this truth over time."

Cunningham also contended he acted properly in living part-time on Wade's boat, which is docked on the Potomac, saying he agreed to pay dock fees and service and maintenance costs instead of rent to stay there. Living on Wade's boat without paying would violate congressional ethics rules.

Cunningham said he has paid over $13,000 since he began living on the boat in about April 2004. He said his attorney was gathering records to prove it.

"I ask only that my constituents reserve judgment until any investigation is concluded and I have had the opportunity to defend myself against these false allegations," wrote Cunningham, a much-decorated former Navy fighter pilot in Vietnam who was first elected to Congress in 1990.