Sunday, June 12, 2005
Duke on the take?: Today's San Diego Union-Tribune has an interesting story on my congressman, Randy "Duke" Cunningham, R-Escondido. [I can't figure out why he's identified as beign from Escondido when the two homes mentioned in the story are in Del Mar and Rancho Santa Fe.]
A defense contractor with ties to Rep. Randy "Duke" Cunningham took a $700,000 loss on the purchase of the congressman's Del Mar house while the congressman, a member of the influential defense appropriations subcommittee, was supporting the contractor's efforts to get tens of millions of dollars in contracts from the Pentagon.
Mitchell Wade bought the San Diego Republican's house for $1,675,000 in November 2003 and put it back on the market almost immediately for roughly the same price. But the Del Mar house languished unsold and vacant for 261 days before selling for $975,000.
Meanwhile, Cunningham used the proceeds of the $1,675,000 sale to buy a $2.55 million house in Rancho Santa Fe. And Wade, who had been suffering through a flat period in winning Pentagon contracts, was on a tear – reeling in tens of millions of dollars in defense and intelligence-related contracts.
I honestly don't know what to think about Cunningham's culpability here. This is news because Wade took a big loss on the transaction. If he'd made a tidy profit flipping the house, then there wouldn't be a story here. The interesting part of the story is a few more paragraphs down.
"I don't know why it didn't sell," said listing agent Elizabeth Todd, a Realtor with the Willis Allen Co. in Del Mar. "I honestly don't. I mean, it's a house in Del Mar west of I-5 and it's a good-sized house. I honestly don't know why."
No Realtor was formally involved when Cunningham sold the house to Wade. But Todd had set the asking price for Cunningham at $1,675,000 and sent a table of comparable house sales to Wade justifying the price, she and Cunningham said. He didn't hire Todd as the listing agent and never paid her a fee, she added. Nor was the house ever posted in the Realtors' multiple listing service, she added.
If you've got a list of comps, and the price Cunningham is asking for is in line with the others, then this should really be no big deal. If the comps weren't comparable or were doctored somehow, then we've got a problem -- but the story doesn't go into that aspect -- and it's the real heart of the issue.
What we need to see is the list of comps both when Cunningham sold his home and again when Wade tried to flip it. All the rest is peripheral -- it explains why Wade would overpay for the home and why that unethical at best and illegal at worst.