Wilkes Speaks, the Times Bites

There's something both illuminating and disappointing about Sunday's New York Times piece on Brent Wilkes, in which the elusive unindicted Duke Cunningham co-conspirator finally speaks to the media of his choice. On the one hand, the piece is unsparing in its description of the House Appropriations Defense Subcommittee as a body where the shakedown of contractors is a way of life. Here, the Times does a great job of providing some essential context and filing in some critical gaps, as well as fleshing out the activities of Bill Lowery. (We also liked the part about Tom DeLay crony Ed Buckham orchestrating the “going away present” to George Nethercutt.)

On the other hand, the Times'  handling of Wilkes seems a bit too gentle.

Look, we understand the game:  Using the front page of the New York Times to send a loud, clear signal isn’t anything new, and if you’re in a position where goading prosecutors to hone in on other parties--ones whom you might make a great witness against, provided you get some kind of favorable deal--is to your advantage, no better places to do it than the Times. But in sitting down with Wilkes, the Times (or anyone else) should feel some obligation to not let its scoop become a soft-focus, pulled-punches affair.

In setting up the piece, the Times says that Wilkes decided to talk with the paper to “rebut false assertions about him by prosecutors and the news media.” Those “false assertions” are, however, never actually spelled out. Indeed, when many with an interest in this case I’ve talked to read that line, all said they were expecting to see Wilkes finally address (a) reports about his alleged hiring of hookers for legislators; (b) the well-substantiated positions of both Pentagon and Congressional elements that work performed by Wilkes’ ADCS’s in Panama was utterly unnecessary and benefited no one but ADCS; (c) Wilkes’s apparent love of opulence as derived from defense contracts and (d) concerns about the propriety of at least one CIA contract Wilkes had that came out of the CIA Frankfurt support base then run by Wilkes’s longtime best friend Dusty Foggo.

Regarding (a), there’s nary a word to be found anywhere in the story. As for (b), you’d never know from the Times piece that everyone from Senator John McCain to a deputy undersecretary of Defense to  Pentagon Inspector General called bullshit on Wilkes’ Panama business. As good as it gets is, “At his peak, Mr Wilkes controlled a dozen companies whose work included digital document storage. The federal government was his chief customer, and he spent up to 30 weeks a year in Washington courting congressman and agency procurement officials.” 

Again, just a small businessman working hard in a flawed system to bring home the bacon.

While the San Diego Union-Tribune and others have reported in expansive detail on Wilkes’ gusto for the high life, here the full extent is: “Wilkes built a headquarters…with a 450 seat banquet hall where Cirque de Soleil preformed at a birthday party for his wife Regina” and “he crossed the country on private jets”. Indeed, without citing any specific report, Wilkes lawyer Nancy Luque tells the Times that “the image of Mr Wilkes as a swaggering deal maker was a caricature. ‘He had his life in Washington and then his real life,” Ms Luque said. “His real life was his family, his friends and his business.”

Time out. As reams of reportage has ably demonstrated to date, Wilkes’ family, friends and businesses were inextricably intertwined---and inextricably intertwined with his “life in Washington”. Indeed,  Wilkes’ rise had as much to do with him establishing himself as a high-profile player at home in San Diego, as well as Washington. Earlier this year we spoke with Peter Mueller, a San Diego attorney (and, small world, Pearl Jam lead singer Eddie Vedder’s stepfather), who was Brent and Regina Wilkes landlord between 1997 and 1999, when the Wilkes’ rented a very nice house from Mueller in the tony Lomas Verdes Estates neighborhood for about $4000 a month.

According to Mueller, in those days, 13291 Lomas Verdes Drive--popularly known as the “Hummer House” on account of the large black Hummer parked out front--was not known for quiet family get-togethers. “They’d have parties, which were probably the beginning of his connection-building,” Mueller recalled.  “At some parties there were very large tents in the back yard--when we’d drive by we couldn’t miss it. Sometimes they’d have as many as ten limousines parked out in front.”

But if one is really going to consider Luque’s assertion and the Times’ deferential soft-pedaling, one must revisit a section from one of the Union-Tribune’s Pulitzer Prize-winning pieces on Wilkes that covers not just his time spent in Washington, but also in San Diego, Hawaii and Idaho.  We note with particular interest the subhead:

Lavish living

The money from Panama and other ADCS contracts – ranging from Gateway computer systems to military sound technology – helped fund a heady lifestyle for Wilkes and his associates.

In 1999, Wilkes and his wife bought a $1.5 million home in the Poway hills. He soon bought a second home: a $283,500 town house in the Virginia suburbs near Washington, D.C. During his visits to Washington, he made his rounds in a chauffeur-driven Mercedes. At the Capital Grille, a favored hangout of legislators and lobbyists, he rented a personalized wine locker with his best friend Foggo.

Wilkes spread his taxpayer-provided funds throughout his company, taking executives on periodic retreats to Idaho.

In Honolulu, Wilkes stayed at suites at the Royal Hawaiian Hotel or rented the beachfront mansion of the late hairstyling mogul Paul Mitchell, which typically goes for $50,000 a week.

Idaho, Wilkes' team stayed at the posh Coeur d'Alene Resort, where Wilkes paid $2,500 a night for a 2,500-square-foot penthouse suite, featuring an indoor swimming pool and outdoor Jacuzzi, said former employees and sources in Idaho.

For dinner, Wilkes would take his team to Beverley's restaurant, where a group meal could easily cost several thousand dollars. For recreation, they would fish, Jet Ski or play at the resort's exclusive golf course, famed for its 14th hole on a man-made floating island in Lake Coeur d'Alene.

There were retreats to Hawaii and Idaho at least once a year, said one source inside the company, with visits to Idaho typically occurring in spring or summer and visits to Hawaii in fall or winter.

Wilkes made no bones about where his money was coming from. His jet-black Hummer bore a license plate reading MIPR ME – a reference to Military Interdepartmental Purchase Requests, which authorize funds in the Pentagon.

Wilkes shared the benefits of his largesse with the politicians who helped him. He took Cunningham on several out-of-state trips on his corporate jet. Cunningham has produced no records showing that he paid for food, lodging or transportation while traveling to resorts with Wilkes, although he does have receipts for several campaign trips on Wilkes' jet.

Wilkes also bought a small powerboat that he moored behind Cunningham's yacht, the Kelly C, at the Capital Yacht Club in Washington, D.C. The boat was available for Cunningham's use anytime Wilkes was not using it.

…Besides its military work, ADCS also vied for state and municipal contracts, both for document conversion services as well as mapping systems to help speed police, firefighters and emergency workers to crime sites or fires.

As Wilkes vied for contracts, he donated to state and local politicians, such as San Diego County Supervisor Ron Roberts and Assemblyman George Plescia of Poway. The kickoff for Plescia's political campaign was held in ADCS' headquarters; Plescia was about to marry Wilkes' government affairs manager Melissa Dollaghan.

Other than Wilkes' donations to federal campaigns, his biggest contributions went to Gov. Arnold Schwarzenegger.

Besides helping coordinate the Schwarzenegger campaign's finance activities in San Diego County during the 2003 recall election, Wilkes and his wife donated $42,400 to Schwarzenegger, the maximum allowable. The next year, Wilkes allowed Schwarzenegger to use ADCS' headquarters as a local office for his 2004 workers' compensation initiative campaign.

Schwarzenegger appointed Wilkes as a board member of the Del Mar Race Track Board in 2004 and the State Race Track Leasing Commission this year.

 

Nowhere in the Times article does Wilkes or his lawyer reference, rebut or address any of these points---did the Times even broach the subject? Wouldn’t you like to hear Wilkes explain why--as a entrepreneur being shaken down and as a businessmen who recalls his situation as “if we didn’t get our earmark, we were finished”--it was necessary to spend all that money going to exotic locations and high-end restaurants on himself and his staff  in the name of business? Apparently the Times doesn’t.

Wouldn’t you like to ask Wilkes or his lawyer, vis a vis the “Washington life vs real life” riff, exactly how and where Wilkes’ nephew Joel Combs, front man for Wilkes Archer Logistics, falls in that dichotomy? Apparently the Times doesn’t. (Indeed, Combs isn’t even mentioned in the Times piece at all.) Wouldn’t you like to have read Wilkes directly addressing points brought up by former colleague Tom Casey from Audre Inc? Apparently the Times didn’t--Casey’s totally absent from the piece, too, with the Audre chapter of Wilkes life meriting only passing mention. And we had been hoping for some examination of Wilkes’ personal financial dealings during his salad days: Research by POGO has found that during his salad days, Wilkes took out at least $8.6 million in non-purchase mortgage loans, including a $7.5 million loan three months before he cut Cunningham a $525,000 check. Was the money for bribes? Campaign contributions? Personal aggrandizement? 

When it comes to Foggo, Wilkes doesn’t “rebut” or even say a word himself. Rather, his lawyer speaks only to one Foggo-related investigation---the one by “federal prosecutors in San Diego,” probing the possibility that Foggo “accepted vacation travel expenses from Mr Wilkes in exchange for a classified agency contract.”  Luque says that, “My client did not give his best friend of over 40 years anything because of any position he might have held.”  Fair enough. But the Times make no mention of the fact that when Foggo’s house was raided, it wasn’t just the FBI there at the San Diego US Attorney’s behest--also present were the Defense Criminal Investigative Service, IRS, and CIA Inspector General’s. According to sources familiar with those investigations, at least some of those agencies are interested in more than just the joint Wilkes/Foggo family trip to Honolulu.

But perhaps most remarkable about the Times piece is that nowhere in 8,657 words of prose does the paper explain exactly why Wilkes could be facing criminal charges. True, the fifth paragraph does note that Wilkes “was described as ‘co-conspirator No. 1’ in a plea agreement signed by Representative Randy Cunningham…[in which[ Mr Cunnigham admitted accepting more than $2.4 million in cash and gifts from Mr Wilkes and other contractors.” But it isn’t until piece’s home stretch that there’s any elaboration---and then it’s only a passing mention of “cash payments” for earmarks. But what has Wilkes in the crosshairs is a little more sophisticated: Two checks he wrote in May 2001 to Cunningham totaling $100,000, and a $525,000 check Wilkes wrote to a mortgage company controlled by another unindicted Cunnigham coconspirator, Thomas Kontogiannis, to cover Cunningham’s mortgage. And nowhere does the Times make any mention of the infamous “talking points” Wilkes drafted for Cunningham--essentially a script for Cunningham to read from as he bullied a Pentagon official into releasing funds for Wilkes.

As one of our friends who was part of the San Diego Union Tribune/Copley News Service team that won the Pulitzer Prize for its ongoing investigation of Cunningham, Wilkes and others observes: “In Washington, you frequently see media strategies by either government agencies, private organizations or other interests in which they deliberately take a story for a national publication like the New York Times, and the understanding is that the newspaper will essentially let them have their way. In other words, [the paper] will let them get their message out, and in exchange, we get the exclusive and agree to take our probing hand and tied it behind our back and use our hugging hand as we do the story. That’s one of the ways people do business in Washington. I’m not saying that’s what happened here, but it Compose Postdoes happen---and I was a little surprised that the New York Times wasn’t a little more skeptical and challenging.”

-- Jason Vest

Comments

[Steve]

The problem is not necessarily that agencies and contractors work together but rather the lack of transparency that sometimes exists between the two.

I agree, share-in-saving contracts are innovative but they do not necessarily solve the problem of transparency. Moreover, share-in-saving contracts have the potential of being more costly.

For instance, in a govexec article (http://www.govexec.com/dailyfed/0105/011905k1.htm), “The American Federation of Government Employees and Angela Styles, the former chief of the Office of Federal Procurement Policy, have argued that share-in-savings contracts allow agencies to sidestep congressional approval on spending projects, and in the long run, cost the government more money.”

-Steve
“Interestingly, laws are made for those who do not keep them."

[Connie the Contractor]

I’m sorry, I’m so terribly confused. According to my mentor, former Office of Federal Procurement Policy Administrator Steven Kelman, the procurement process is conducted by wise, disinterested chaps making careful, responsible decisions about meticulous proposals prepared by otherwise disinterested chaps, and the process is so terribly merit-driven, don't you know, that agencies and contractors ought to be partners, and that’s why, for example, we should discourage litigation, oversight, and competition and embrace innovative concepts like “share in savings.”

Are you suggesting that the procurement process is actually infected by politics? Oh my heavens, no. Is there perhaps a legitimate role for oversight, competition, and even litigation, as checks on the process?

My worlds are colliding.

[Retired]

All good points. At the end of the day, though, Wilkes has played the flagship of American journalism like a virtuoso, eliminated the moral authority of the mainstream media, and made the DoJ and FBI look like the Keystone Cops, to boot. Not bad for a poor boy who grew up on the wrong side of the tracks.