We’re no doubt going to hear a lot more in the coming days about Rep. Randy “Duke” Cunningham’s (R-Calif.) sale of his home to a defense contractor with business before two of Cunningham’s committees. But let’s take a moment now to review what we know at present and see if there’s any way not to see this “transaction” as a gift of almost a million dollars to a sitting U.S. congressman.

Here’s what we know: Mitchell Wade is the head of MZM Inc., an obscure defense and intelligence contractor based in Washington, D.C. According to the article by Marcus Stern in the Sunday San Diego Union-Tribune, Rep. Cunningham freely admits to helping Wade secure a series of contracts over the past two years. And from the Union-Tribune’s account, MZM Inc. has been getting contracts like gangbusters over the past two years.

In November 2003, it turns out, Wade purchased Rep. Cunningham’s house back in the district for almost $1.7 million. Wade then turned around more or less immediately and put the house back on the market for about the same price.

Only it wasn’t easy to sell. In fact, the place sat unsold and unoccupied for 261 days before finally selling for $975,000.

So Mr. Wade took quite a bath on this purchase. And keep in mind that the San Diego real-estate market has been on fire of late, with residential property values going up about 20 percent a year. As locals will tell you, nobody but nobody has been losing money on real-estate investments there in recent years. So even though Wade eventually sold the old Cunningham homestead for just shy of a million dollars, it’s probably fair to assume its value was substantially less than that almost a year earlier when he originally bought it.

It seems pretty clear that Mr. Wade didn’t have any particular interest in having a home in San Diego. To the best of my knowledge, there’s no evidence he’s bought another one since his unfortunate first attempt. One of his business associates lamely told the San Diego paper that MZM Inc. wanted to establish a presence in San Diego, though you’d figure they’d buy commercial real estate for that purpose, not a private home. Revealingly, Wade has yet to accept a call from any reporter to explain what happened.

So the real question is, Why on earth did he pay such a wildly inflated price for a Rep. Cunningham’s home?

Thanks to Marcus Stern of Copley News Service, we now know much of what happened.

The price was set by Elizabeth Todd, a San Diego real-estate broker whose family has given Cunningham’s campaigns more than $11,000 over the past eight years. For no fee, Todd assembled a list of “comps” to determine the value of the home. She pegged the price at $1.7 million.

Wade then purchased the house from Cunningham for that price in a private transaction. Wade must have really loved the house because he apparently made no attempt whatsoever to determine its actual value. No separate real-estate agent to canvass the neighborhood, no appraiser, nothing. He went ahead and bought it — with cash.

With the money from the sale to Wade, Cunningham bought a new house — this one for more than $2.5 million. And while Todd may not have made any money for setting the inflated price on Cunningham’s first home, she was the congressman’s agent of record on his subsequent purchase. So she must have gotten a tidy commission on that one.

And that’s not all. When Wade turned around and unloaded the old Cunningham home, Todd was also the agent for that sale. So even though Wade took a bath on the sale, Todd must have gotten a nice slice of that one too.

So what does it all mean?

From all the available evidence, Mitchell Wade had no interest in purchasing a home in San Diego. He wanted to buy Congressman Cunningham’s home. And that’s not to say he wanted to own it, just by it — as evidenced by the fact that he immediately put it back on the market. He bought the house for almost twice its actual value and made no attempt to ascertain what it was actually worth.

He doesn’t even seem to have held much of a grudge against Todd for giving him such a bum steer, since he had her be his broker on the subsequent sale.

Wade knew all this; Cunningham knew all this; Todd knew all this. They were the three players who worked together to help Cunningham parlay his house worth under a million dollars into a fancy new manse valued at more than $2.5 million.

If Congressman Cunningham’s got any good explanation for how and why this all went down, I’m all ears.

Marshall is editor of talkingpointsmemo.com. His column appears in The Hill each week.
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