December 11, 2005

Republican Money Laundering Connections

Last week I wrote about the growing linkage that connects the former Rep. Randy "Duke" Cunningham (R-CA) bribery scandal to the Abramoff K-Street scandal. Since then, the story has moved along briskly.

Last Tuesday The Hill started to dig into the work that Joseph Cannon of Cannonfire had been researching: namely, what was it that Brent Wilkes was delivering through his companies with their contracts with the Pentagon.

Just to remind you about why Brent Wilkes is interesting:

Wilkes has been named “co-conspirator No. 1” by Justice Department officials in the criminal investigation into the Cunningham bribery scandal. Wilkes is suspected of giving more than $630,000 in cash and favors to Cunningham in exchange for landing lucrative appropriations earmarks and federal contracts. He has not been charged with a crime.

Brent Wilkes is the founder and President of the Wilkes Corporation, an umbrella corporation which controls the Group W Advisors. Here's the Senate page for all the lobbyist disclosures that list the companies that Group W Advisors covered. Cannonfire's investigation into these companies (here) was picked up by The Hill:

Group W Advisors is part of Wilkes Corp., an umbrella company that encompasses at least 13 other firms, including ADCS and Group W Transportation which, over the years, has flown several members of Congress to privately funded events.

Group W Advisors is registered as a defense and intelligence consulting firm specializing in defense appropriations and budget issues, according to lobbying disclosure forms.

...When asked to describe the kind of work Group W Advisors did on behalf of its clients, Lipman said: “[I] can’t explain the kind of work that they do … He [Wilkes] is in the middle of a criminal investigation, so we are not discussing this.”

Among other companies, Group W has represented ADCS, Perfect Wave Technologies, MailSafe, Pure Aqua Technologies, Archer Defense, Al Dust Properties, Group W Holdings and Mirror Labs, all part of Wilkes Corp.

The main website for Wilkes Corp. does not list any of these companies. The Hill found a listing of these companies in an employment ad posted on for positions open at ADCS.

The Wilkes Corp. a website, provides little information. Its home page describes Wilkes Corp. as providing “leadership, knowledge and personnel for technology and defense-related corporations.”

Other Group W Advisors lobbying clients either have no websites or else sites that provide scant information about the nature of their businesses.

Now the websites for the companies that had websites are disappearing faster than one can say boo. So what do these guys do? And how much money have they gotten from these defense contracts? Some reports put it at $700 million.

And as Josh speculated, the connections between these scandals are definitely starting to connect. Again from The Hill:

Alexander Strategy Group’s lobbyists who represented Group W Advisors include: Ed Buckham, Rep. Tom DeLay’s (Texas) former chief-of staff, and Tony Rudy and Karl Gallant, who also worked for DeLay, as well as Terry Haines, the former staff director of the House Financial Services Committee, which is chaired by Rep. Mike Oxley (R-Ohio).

Laura Rozen continues to dig into this growing scandal and last week asked why was Rep. Bob Ney (R-Ohio) putting into the Congressional Record high praise for Brent Wilkes?

Where have we heard about front companies before? Gee, isn't that something we know the CIA (as well as the mafia) does at times? Laura had this teaser in one of her pieces:

As to whether the Cunningham money trail also ran through Langley, stay tuned.

Cannonfire says yes, and provides further information about Wilkes and his connection with CIA front companies. As he says:

This passage [from the San Diego Union Tribune] is somewhat misleading in its implication that Wilkes created the World Finance Corporation, which actually had its origin point while Wilkes was still in school. This was no ordinary financial firm; it was once quite notorious. Before there was BCCI, there was the World Finance Corporation -- a CIA-linked money laundromat that probably had recruited Wilkes earlier than the SDUT story indicates.

Yes, indeedy. Back in 1988, I read a book by Jonathan Kwitny exposing yet another aspect of CIA money laundering just as the Iran-Contra investigation was starting up. Here's what he said about WFC (which by the way still exists):

In south Florida, by the 1970s, police could scarcely arrest a dope dealer or illegal weapons trafficker without encountering the claim, often true, that the suspect had CIA connections. Perhaps the largest narcotics investigation of the decade, the World Fianance Corporation case, involving scores of federal and state agents, had to be scrapped after a year because the CIA complained to the Justice Department that a dozen top criminals were "of interest" to it. (pg 96, paperback edition)

Joseph Cannon has been on this story since December 1st when he posted a letter he sent to Daniel Hopsicker of saying that it looked like the Wilkes Corporation was a front for money laundering. If you start there and move forward to today, you can see the whole thing start to unravel. Read Hopsicker's latest piece here which provides much more background on the beginnings of WFC and Robert Parry's investigative work uncovering the connections in the Iran-Contra scandal.

One thing that Joseph does is ask a question that seems so logical that I wonder why I've never seen nor heard it asked before. Again, it comes down to why are we getting so little payback for the massive defense spending we pay for?

I've summarized with an almost criminal brevity a lot of sordid history, and I've done so to emphasize one point: Every time a new scandal popped up during the 1980s and early 1990s, the same refrain appeared: "It's all about funding the contras!" Money from arms sales, cocaine, heroin, gold, S&Ls, crooked banks, gambling, software, bribery, Middle East financiers, "patriotic" donations -- it all went toward regime change in the small country of Nicaragua.


Eventually, a few people started asking the obvious question: How much money did the contras need? Were they firing gold bullets down there?

In fact, fighters within the contra movement always insisted that they were seriously underfunded. Do not dismiss this assessment. The Sandinista army was hardly one of the world's most impressive fighting machines, yet the contras never seemed to make much headway against them. The FDN won only when the Nicaraguan electorate finally -- literally -- cried "uncle."

But if others grabbed much of this "contra" money -- where did it go? Were pockets lined, or was the clandestine cash used for partisan purposes?

Today we know that our Pentagon cannot find the funds to armor the trucks our soldiers use in Iraq. We know that families are holding bakesales to provide bulletproof vests for them. And we know that we have faced a a shortage of bullets. But we do have Republicans who are making millions by funneling billions to front companies, all to stay in power.

The love affair the Republicans have with dirty money has allowed them to be sucked right into the swamp of corruption. We'll see how many of them drown in the pool - just like Rep. Randy "Duke" Cunningham was. He is clearly only one cog in the vast money laundering machine.

Posted by Mary at December 11, 2005 01:48 PM | Corruption & Graft | TrackBack(2) | Technorati links |