Stern Watchdog   

How Copley’s Marcus Stern exposed a corrupt congressman

No insider leaks, no subtle tip-offs. Marcus Stern unearthed one of the largest bribery scandals in congressional history the old-fashioned way: He dug through records.

Forget the romantic notion of days spent poring over faded manuscripts and sneezing past dusty shelves. Stern did not even get out of his chair. In one afternoon during several Google and LexisNexis searches, the Copley News Service reporter found property records that suggested a suspicious real-estate deal between Rep. Randy "Duke" Cunningham, a member of the influential House Defense Appropriations subcommittee, and defense contractor Mitchell Wade. "I pulled on a string and the whole fabric unraveled," Stern says. His discovery led to a federal investigation that would end the California Republican's career and, coupled with a widening federal probe into lobbyist Jack Abramoff's activities, force House leaders to propose tighter rules for interacting with lobbyists.

By pleading guilty to accepting more than $2.4 million in bribes, Cunningham and his goodie-bag legacy, ranging from silver candelabras and a Rolls-Royce to a 19th-century Louis Philippe commode, capped the biggest bribery case ever brought against a congressional official, according to Assistant U.S. Attorney Phillip Halpern. Behind the veteran congressman's high-priced tastes lies the story of a regional reporter acting on a nagging suspicion about a lawmaker on his beat. The Washington, D.C.-based news editor for Copley, Stern broke national news without relying on a single unnamed source. A Washington Post editorial credited the "enterprising" journalist for preventing Cunningham from committing the "perfect congressional crime." Stern, colleague Jerry Kammer and Dean Calbreath from Copley's San Diego Union-Tribune won a 2005 George Polk Award for political reporting on this story; Stern and Kammer also were finalists for the 2006 Selden Ring Award for investigative reporting.

"It all came together really quickly," says Stern, 52, an unassuming man who cites curiosity as his greatest asset. "It was a month from when I thought, 'Eureka! He is selling his house to a defense contractor who is doing business with the government!' until we published the story" June 12, 2005, in the Union-Tribune. Stern says regional reporters like himself have a special watchdog capability. "With a regional focus you don't have to sit back waiting for tips or leaks," he says. "You are more in a hunter-gatherer mode than a spoon-fed mode."

Stern grew up in the shadow of distinguished journalists. Grandfather Augustus "Gus" Stern was a copy editor at the Washington Post. Father Laurence Marcus "Larry" Stern was the Post's assistant managing editor for national news. Influenced but also intimidated by his father's prominence in the profession, Stern turned to journalism only after the elder man's death. At 26, he joined the copy desk of the now defunct San Pedro News-Pilot in California. He spent a year as an editor at States News Service in Washington, D.C., before persuading Copley in 1983 to let him cover the Los Angeles region from Washington.

Journalism may be in his blood, but the reporter, who finds himself drawn to "ordinary people in extraordinary circumstances," was trained in psychology. While working in several psychiatric hospitals, he learned to focus "on what people do rather than what they say," a useful skill when reporting on the Hill. "We are so busy looking at this blather that comes out of Washington every day, so busy watching the Kabuki, contrived theater, that we don't pay attention to the stuff that we need to be paying attention to," Stern says. "We listen to the rhetoric but we never listen to the quiet activities [the government isn't] holding press conferences on."

It was this mind-set – and an inkling – that led Stern to Cunningham's records. In 1997, one of Stern's sources told him that after a chance meeting at The Capital Grille in Washington, D.C., Cunningham invited her and a friend back to his yacht, the Kelly C. Amid lava lamps and champagne, Stern's source learned of a hunting lodge on the Eastern Shore of Maryland that Cunningham allegedly was building. The congressman also mentioned a friend, a defense contractor who had offered to buy him another boat. Cunningham feared the gift might not look good even though the contractor suggested buying it himself and "renting" it to Cunningham.

Since none of Cunningham's property records listed a hunting lodge, Stern began to look for one. After a few weeks "tearing my hair out trying to find the lodge," Stern put it out of his mind until years later, when he discovered that a defense contractor had purchased a house from Cunningham. "Then it was an epiphany," he recalls. "But the irony is that one of the more delicious parts [of the Cunningham story] is the Duke-Stir," the yacht that Wade owned and allowed Cunningham to live on rent-free when in Washington. "That story was later broken by the North County Times" in San Diego County. "I had a head start, and they still beat me on this story," he chuckles, a little chagrined at being scooped.

Last May, Stern was exploring two trips the eight-term congressman had taken to Saudi Arabia when he noticed a discrepancy in the purchase and selling prices of Cunningham's Del Mar Heights house in San Diego County. The reporter conducted a "lifestyle audit," a technique that compares living expenses with reported income, and found that the decorated Vietnam War veteran sold his home for $1.675 million in November 2003. The new owner put the house up for sale almost immediately for approximately the same price. Despite a relatively thriving real-estate market, it sat for more than eight months before selling for a $700,000 loss. Meanwhile, Cunningham used the proceeds to buy a $2.55 million mansion in nearby Rancho Santa Fe.

Searching Nexis property records, Stern learned that Cunningham had sold his Del Mar home to "1523 New Hampshire Ave., LLC," an address, not a person. Another search revealed that this address was the name of a Nevada company that listed Wade as its only officer. Stern then discovered that Wade had registered a second company in Nevada, a defense contracting company named MZM Inc. A Google search turned up a Washington, D.C., address on MZM's Web site: 1523 New Hampshire Ave. NW. The site boasted about MZM's recent influx of federal contracts. Languishing previously, the company began receiving tens of millions of dollars in contracts from the Pentagon around the time of the Del Mar house sale.

Thirty-two days after the article appeared in the Union-Tribune, Cunningham announced that he would not seek reelection. The FBI and the IRS launched an investigation, and Stern and other reporters who picked up on the story further disclosed a web of co-conspirators, ornate gifts and acts of corruption. Cunningham resigned and pleaded guilty to bribery and tax evasion in a November plea agreement. He was sentenced March 3 to eight years and four months in prison.

"Without Marc Stern's story there might not have been a Cunningham case," says Halpern, one of the lead prosecutors, who considers Stern the "genesis of the investigation. [He] was responsible for the criminal prosecution. This is the first time in my [25-year] career I have predicated a case upon a news story."

Copley Washington Bureau Chief George Condon says Stern's story calls attention to the importance of regional reporters at a time of staff downsizing and declining government coverage. "You can't expect national news organizations to catch a Duke Cunningham," Condon says. "And you certainly aren't going to get stories like this from the blogs. Amid all the gloom about newspapers, a reminder like this is timely."

Congressional watcher Charlie Cook, founder of The Cook Political Report and a political analyst for National Journal, considers Stern's story "a great case of a reporter's natural curiosity, good instincts and tenacity." He believes Stern's role as a regional reporter afforded him a unique intimacy with Cunningham's situation. "I think it would be unlikely for someone at the New York Times or the Wall Street Journal to sniff it out the way Marc did."

Other regional journalists have followed up on Stern's discovery. Among them is Laura Strickler of Capitol News Connection, a Public Radio International service that provides localized coverage of Congress. Broadcasting for San Diego's KPBS, she first reported federal raids on Cunningham's and Wade's homes and MZM's headquarters. Strickler says regional reporters like her could pursue leads "because of Marc Stern's story."

Stern isn't ready to abandon his scoop just yet. He's exploring programs Cunningham funded in exchange for gifts and cash bribes from contractors, especially classified work done by MZM that involves protection against improvised explosive devices (IEDs), a major source of fatalities in Iraq. "If it turns out that this was a program driven by corruption, then we need to know if money is being wasted. It is crucial to the welfare and livelihood of service people in Iraq as well as the Iraqi Army and Iraqi police," Stern says. "The most valuable skill any of us have in this business is our curiosity."