A New York financier has admitted playing a key role in the scandal that brought down former Rep. Randy “Duke” Cunningham, according to a guilty plea unsealed this week.
Thomas Kontogiannis said he helped finance the purchase of Cunningham's $2.5 million house in Rancho Santa Fe, in a deal that evolved from two military contractors' alleged plans to bribe the congressman.
All of which begs the question--why was Kontogiannis' plea deal sealed and why has it been unsealed now? Presumably, his plea would be sealed to allow the prosecutors to work with Kontogiannis to pursue someone else and his plea would only be unsealed when the prosecutors moved up the chain.
In any case, let me review what we know.
There are actually two strands to the Cunningham scandal that have been pursued so far. The Foggo/Wilkes scandal, in which Foggo steered a CIA water contract and a air services contract to his childhood friend
Foggo Wilkes [thanks for the correction, Larry]. Duke Cunningham and Mitchell Wade were only tangentially involved in this scandal (Foggo asked Wilkes if Cunningham could help a contractor get a work visa). This side of the scandal is the one that leads right into the CIA, since these contracts were CIA contracts.
The other strand is the one that got this started--and the one that Kontogiannis has been known to be involved in. Mitchell Wade was bribing the heck out of Duke Cunningham in exchange for some earmarks, most interestingly for his company MZM. This is the part of the scandal that involves Dick Cheney's office, and (since MZM was a contractor to both DOD's domestic spying program CIFA and to the Robb Silberman Commission looking into Iraq intelligence) some more nebulous intelligence issues. This is the part of the scandal that involves Wilkes in Cunningham's San Diego real estate scams; it also involves John Michael, Kontogiannis' nephew, for money laundering.
What has been unsealed doesn't add much to this part of the story: Kontogiannis bribed Cunningham by financing his condo and Rancho Santa Fe house and purchasing his boat at hugely inflated prices. The plea deal references other fraudulent mortgages Kontogiannis and Michael financed, including one transaction the proceeds of which they used to pay off part of Cunningham's Rancho Santa Fe mortgage until Wilkes paid his half of the purchase price on the house, but it doesn't provide much detail. And it also notes that Kontogiannis didn't deal with Wilkes before the 2004 deal on the Rancho Santa Fe house.
The unsealed documents leave it very unclear why Kontogiannis was bribing Cunningham--the plea says he did it "because he wanted to maintain his relationship with Cunningham, a powerful public official who could assist defendant in various ways." That statement tells us nothing about what Kontogiannis got in return.
So from what has been unsealed, my best guess as to why it was sealed in the first place was to develop further charges against John Michael, Kontogiannis' nephew. Michael got an extra charge tacked on in a superseding indictment in May (though it does not appear to be directly relevant to these other fraudulent mortgages), so perhaps that's it.
Only, if I'm reading the docket correctly, it appears that not everything was unsealed. Here's what's in the docket (case number is 3:07-cr-00423-LAB-1):
2/21/07: Sealed document modified on 6/12 (the day the rest of this was unsealed). [either this or the 2/23 document may be the motion to seal proceedings; if so, it will be unsealed on 6/22, when redacted transcripts are due to the court]
2/22-23/07: A bunch of entries relating to Kontogiannis' plea deal, all of them now modified pursuant to the unsealing.
2/23/07: A document modified by being sealed on 6/12.
2/27/07: Order to seal proceedings.
5/29/07: An order denying the government's request to continue sealing Kontogiannis' guilty plea.
6/11 and 6/13/07: Entries relating to scheduling. Of note, Judge Burns rescheduled Kontogiannis' sentencing from June 25, 2007 to November 26, 2007. The Michael/Wilkes trial is currently set for 9/18/07, and the Wilkes/Foggo trial is currently set for 10/23/07, so the judge is holding off on sentencing Kontogiannis until after both trials.
Now, it appears that all of this sealing and unsealing activity relates, at least in part, to the role that Kontogiannis will have as witness in one or both trials. But there are those two other sealed documents (again, one of which may be the motion to seal). So we may not have everything.
One more note. Consider the timing on this. Kontogiannis signed the plea deal on February 9--several days before Lam notified Main DOJ on February 13 she was going to indict Wilkes and Foggo. But that first sealed document was filed after Lam left.