Cunningham Gets to Set Up Legal Defense Fund

SAN DIEGO – The House Ethics Committee has given permission to Rep. Randy "Duke" Cunningham (search), R-Calif., to set up a legal expense fund to fight a federal bribery investigation.

The committee's chairman, Rep. Doc Hastings (search), R-Wash., and its top Democrat, Rep. Alan Mollohan, D-W.Va., signed a letter to Cunningham that says he can use the fund "in connection with a grand jury investigation that concerns your official duties and bears on your reputation and fitness for office."

The letter was sent Thursday to Cunningham's attorneys.

"Duke is pleased that the committee acted promptly upon his request and is thankful for its decision," said Cunningham attorney Lee Blalack.

Federal authorities are investigating whether defense contractor Mitchell Wade bribed Cunningham by buying his Del Mar, Calif., home at an inflated price. At around the same time as the house sale in 2003, Wade's firm, MZM Inc., was winning valuable defense contracts. Cunningham sits on the House Appropriations subcommittee that controls defense dollars.

About a year after buying the house, Wade resold it at a $700,000 loss. Wade also let Cunningham live rent-free on his yacht, the Duke Stir, at the Capital Yacht Club.

Cunningham, 63, a Vietnam War flying ace who is in his eighth term in Congress, has announced he won't seek re-election. He has conceded showing "poor judgment" but denied doing anything illegal.

It is standard for members of Congress with legal problems to set up legal defense funds. House Majority Leader Tom DeLay, R-Texas, also has one. Lobbyists are not allowed to donate to the funds, and donors must be made aware they are donating to a legal defense fund, and its purpose.

Cunningham will be required to file quarterly reports with the House Ethics Committee (search) and must also report contributions of more than $305 in a calendar year on his annual financial disclosure form.

Separately, Cunningham has asked permission from the Federal Election Commission to use money in his campaign fundraising account to pay his legal fees. The commission is expected to issue an opinion later this month.