"Democrats are launching an opening volley in an effort to “nationalize next year’s midterm House elections around the issue of ethics,” as The Washington Post recently reported. They’re spending $36,000 on local advertising to target a handful of incumbent Republicans. And though Virgil Goode, Charlottesville’s 10-year Congressional veteran, is not on their list, an unfolding criminal investigation into his largest campaign contributors could loosen the conservative Republican’s firm grip on the Fifth District.

The story of MZM Inc., a defense contractor with offices in Albemarle County and Martinsville, is rooted in a June 12 article in the San Diego Union-Tribune. That paper reported that in November 2003 California Congressman Randy “Duke” Cunningham, who sits on the House Intelligence Committee and the defense appropriations subcommittee, sold his home for $1,675,000 to a company owned by Mitchell Wade, MZM’s founder and then-chief executive. In the summer of 2004, Wade resold the house at a $700,000 loss. It subsequently also emerged that Cunningham had been using a 42-foot yacht owned by Wade as his Washington residence.

Founded in 1993, MZM was not awarded significant government contracts until after 2002. In 2003, the year of the home sale, MZM won $41 million in defense contracts. That figure increased to $69 million in 2004, according to the Union-Tribune.

Goode, a member of the appropriations committee, reportedly was the principal sponsor of a provision that led to the creation of MZM’s Martinsville office, which was also supported by a $250,000 loan from Governor Mark Warner’s Opportunity Fund, $250,000 from the Virginia Tobacco Indemnification and Community Revitalization Commission, and $127,000 from the Martinsville-Henry County Chamber’s Partnership for Economic Growth. The program, which researches the ownership of foreign defense contractors, “was not a Pentagon priority and was not requested by the Defense Department,” according to a Post report, which cited an anonymous senior defense official who further said the program “was mandated by Goode on MZM’s behalf.”

The Pentagon has now suspended additional work orders for MZM, and earlier this month federal agents raided Cunningham’s California home and Wade’s Washington home, office and boat.

Goode was the second-largest single recipient of campaign contributions from MZM and its employees in the 2003-04 election cycle, and MZM contributions were his largest single source of financial support, accounting for $39,551 of the total $818,460 he raised, according to the Center for Responsive Politics. So far in 2005, MZM employees and donors that appear to be related to MZM employees because of identical last names and hometowns have given $48,625 to Goode, accounting for 85 percent of the total $57,296 he’s raised so far this cycle.

Three MZM employees who asked not to be identified told the Union-Tribune that Wade had pressured employees to contribute to MZM’s political action committee. The newspaper said one employee “quoted Wade as describing his congressional strategy this way: ‘The only people I want to work with are people I give checks to. I own them.’”

Goode has since said that he doesn’t want coerced donations. Earlier this month he was preparing an offer to return donations that weren’t made “freely and voluntarily.”

Al Weed, Goode’s Democratic challenger in 2004, says he does not think that “Virgil has done anything dishonest.” Still, he characterizes the situation as a result of a lost “ethical compass,” resulting from a sense of entitlement and arrogance rooted in the entrenchment of power.

Generating employment for the district is a chief responsibility for the congressman, Weed says, “but when there’s $50,000 on the table, then you begin to wonder, was he doing it because they were good for the district, or was he doing it because there was $50,000 on the table?”

Weed, who lost decisively in 2004, garnering 36 percent of votes compared to Goode’s 64 percent, says the relationship with MZM clashes with Goode’s “earned” reputation “for being very frugal, for being very straight-laced.”

Weed says he hasn’t yet made a decision whether to run in 2006, but of the MZM issue and ethics in general he says, “It’ll become part of the campaign, I’m sure.”" (Harry Terris, C-Ville Weekly, July 12, 2005)