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March 2006
2006 Virginia Fifth District Congressional Race: Bad news for Virgil Goode?
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"Charlottesville now has a direct link to a genuine political scandal in Washington.

The high-profile fiasco features a corrupt defense contractor, illegal campaign donations, multimillion dollar bribes, a yacht and the tearful downfall of Randall “Duke” Cunningham, a Republican congressman from California. And on February 24, a surprise guilty plea by the former CEO of the defense company detailed the role of Representative A, also known as Virgil H. Goode Jr., who represents Charlottesville in the U.S. House of Representatives.

In pleading guilty to felony election fraud and three other criminal counts, Mitchell J. Wade, owner and CEO of the defunct MZM, Inc., admitted to giving Goode $46,000 in illegal campaign contributions in 2003 and 2005

Goode, although not named by federal prosecutors, is easily identifiable in the court documents.

In a written statement, Goode said he was “shocked and amazed” by the details of Wade’s plea agreement, and that he “had no knowledge that any of the contributions by MZM persons to our campaign were illegal.” Goode did not respond to C-Ville’s questions, faxed at his request, by press time.

Prosecutors say Wade did not inform Goode or his staff that the contributions were unlawful. However, the court documents also show how the campaign money came with strings, albeit legal ones. In the spring of 2005, Wade asked Goode to steer federal funding to an MZM facility in Virginia’s Southside, which is in Goode’s district.

Months later, Goode’s office “confirmed to Wade that an appropriations bill would include $9 million for the facility and a related program,” the court documents state. Wade, whom Goode refers to as “Mitch” in his statement, “thanked Representative A and his staff for their assistance.”

The court proceedings thus far indicate that Goode broke no laws, neither by receiving tainted campaign checks nor by securing federal contracts for MZM. Several news reports speculate that Goode is not a target of further investigations.

However, Goode’s association with the lurid scandal could hurt his political fortunes. The affable Goode is immensely popular throughout most of the huge Fifth District, which is roughly the size of New Jersey, having won at least 63 percent of the vote in the last two elections. Even the two Democrats who are vying for his seat say the MZM affair will not be enough, by itself, to sway voters away from Goode. But it may have tarnished his squeaky clean image.

“It shatters this vision of innocence… how he’s one of them,” says Al Weed, the Nelson County winemaker who was thumped by Goode in the 2004 election. “He put his hand in the cookie jar and he got caught.”

Scandal? What scandal?

Goode has received a load of unwelcome publicity in the wake of Wade’s guilty plea, from media outlets across Virginia and the nation. And the MZM affair has become part of the rallying cry to combat sleaze on Capitol Hill, particularly relating to “earmarking”—the practice of slipping money into legislation to benefit hometown projects or specific companies.

Calling campaign contributions “legal bribes,” Washington Post columnist Ruth Marcus recently wrote that the money Wade and MZM gave to Goode—at least $90,000 since 2003—was a “real bargain” because it netted a $9 million contract.

Goode’s name is now permanently linked to the MZM debacle and, by extension, to other Washington ethics scandals, such as the furor around lobbyist Jack Abramoff, which is currently dogging Tom DeLay, the former majority leader in the U.S. House of Representatives. The details of the “Duke” Cunningham case are particularly titillating.

Wade, the shady MZM CEO, “showered” the California Republican, who resigned in November after pleading guilty to taking $2.4 million in bribes, with checks, cash, rugs, antiques, and the use of a yacht and Rolls Royce as part of the payout, according to prosecutors. Among the more absurd gifts were two antique “period” commodes dating from the mid-19th century, one with a $7,200 price tag. In exchange for the fine living perqs, Cunningham pulled strings for MZM from his perch on the defense appropriation subcommittee.

Cunningham blubbered at the podium when he announced his retirement. But his lawyers’ argument that the former “Top Gun” Navy fighter pilot was depressed and suicidal didn’t sway a federal judge, who on Friday sentenced Cunningham to eight years in prison.

In addition to Cunningham and Goode, Wade’s guilty plea pointed to Katherine Harris, a Republican Congresswoman from Florida who rose to fame during the Florida recount of the 2000 presidential election. Harris received $51,000 in illegal campaign funds from Wade. And, like Goode, she was unaware of their illegality, prosecutors say.

Goode has by far the lowest-profile name in the scandal. But despite Goode’s brush with wonkish infamy, it will probably take more than a confusing Capitol Hill imbroglio to take down the entrenched, five-term incumbent.

James H. Hershman, a professor at Georgetown University and expert in Virginia politics, thinks only revelations that Goode knowingly broke the law could force the popular congressman out of office. After all, he says, many of Goode’s constituents will see his dealings with MZM as being just that of their loyal Congressman trying to bring much-needed jobs to the Southside.

“He’ll probably survive it politically,” Hershman says.

Tucker Watkins, the Fifth District’s Republican chairman, agrees, predicting that the MZM case will have no impact on Goode’s run in Congress.

“You’re talking about a guy who’s worked hard to bring jobs into the District,” Watkins says. “I think they’re barking up a real bad tree on this one.”

An instrumental role

Virgil’s name is beyond big in the Fifth District, with family roots that go back at least 150 years and a father, Virgil H. Goode Sr., who was “almost a folk figure” around the Southside, says Hershman at Georgetown.

Goode Sr. was a charismatic Common-wealth’s Attorney in Franklin County who sometimes sported a coonskin cap. In the rural county, which has long been home to fiercely independent bootleggers, Goode Sr. had a reputation for cutting across the grain, even sometimes opposing the Democratic machine of State Senator Harry Flood Byrd. As evidence of his popularity, a municipal building and stretch of highway in the Franklin County are named after Goode—the elder one, that is.

In many ways, the younger Goode has followed in his father’s footsteps. He was elected to the House of Delegates at 27, shortly after graduating from UVA Law School. In both Richmond and Washington he developed a reputation as a man of the people (despite a net worth of between $1.2 million and $3.3 million). His office in Rocky Mount is rickety and his car has 270,000 miles on it, according to Watkins.

At political events, Goode is completely at ease while mingling with constituents. Everyone, it seems, knows him as “Virgil.” And even his political opponents have a hard time finding something nasty to say about him.

Goode has also cultivated an image as an independent. Like his father, he began his career as a Democrat. But he became a Repub-lican in 2002, after a two-year stint as an In-dependent. Goode’s voting record is clearly conservative, but does not rank him among the most stridently partisan of Republican lawmakers, nationally or in Virginia.

Goode has even stood up to the big dog of the Republican Party: the Bush Administration. In 2004, he landed national press and praise from many along the old Tobacco Road in the Southside for opposing the president’s opposition to the tobacco buyout.

Perhaps the most valuable aspect of Goode’s political image is the perception that he fights hard to bring home money and jobs. Much of the Fifth District was hit hard by the drying up of the tobacco and textile industries. Many Southsiders see Goode’s seat on the House Appropriations Committee as a lifeline, particularly given his influence as part of the Republican majority.

Rev. Cecil Bridgeforth of Shiloh Baptist Church in Danville told C-VILLE during the 2004 election season that when federal money comes to the Southside, “people think he’s ridden in on this white steed and he’s given us this money.”

Goode was trying to fill precisely this role, at least in his public machinations, through his relationship with MZM.

In 2003, after a wave of recent layoffs, Martinsville led Virginia with a whopping 16 percent unemployment rate. So it came as extremely welcome news when, in November 2003, Goode joined then Governor Mark R. Warner in announcing that MZM planned to locate an intelligence facility in an abandoned building in Martinsville.

The contract that funded MZM’s venture in Martinsville, called the Foreign Supplier Assessment Center, which was to scrutinize foreign products and services purchased by the Pentagon, came from a $3.6 million earmark and “pet project” that Goode championed. State officials referred to the Martinsville facility as “Project Goode.” In a press release announcing the deal, the governor’s office praised Goode for being “instrumental in securing this project,” which was to create 150 jobs within three years.

But as C-Ville noted in July 2004, Goode’s influence with MZM was a two-way street. MZM’s political action committee, its employees and their immediate families, gave Goode $48,551 in the 2003-04 election cycle, according to the Center for Responsive Politics. Mitchell Wade’s D.C.-based fiefdom was by far Goode’s biggest campaign donor, more than tripling the next highest donation.

Wade’s fortunes began to unravel in June 2005, when a reporter with Copley News Service blew the whistle on a dirty real estate deal Wade arranged for Cunningham, the California Congressman. Liberal bloggers, including local Waldo Jaquith and Joshua Micah Marshall, quickly pounced on the cozy Goode connection with MZM, with state and national media subsequently reporting that Wade may have coerced campaign donations that he gave to Goode.

It wasn’t until Wade’s guilty plea of last month that the details of the illegal campaign contributions to Goode and Harris were made public. The scheme was fairly simple: In an effort to gain favor with Goode, Wade wrangled contributions to Goode’s campaign out of his employees and their spouses. He then reimbursed them for the donations, rendering them illegal. In Washington parlance, these are called “straw contributions.”

Wade did not tell Goode that the checks were procured through illegal means, according to Goode and prosecutors. Goode, in his written statement, said he offered to refund donations from anyone with ties to MZM. Two donors accepted his offer. He has also donated the total amount of MZM donations to “charities and non-profits such as volunteer rescue squads, volunteer fire departments, and SPCA-type entities.”

Fall fireworks

Hershman says it would be “astonishing” if any allegations of corruption on Goode’s part were to emerge in the Wade probe. His theory of why Goode decided to play ball with Wade, a suspicious character even in the murky world of defense spending, came from a deep desire to help the Southside.

“If there’s a failing, it’s a failing of the heart,” Hershman says. “Had the need not been there, so desperately, I’m not sure he would’ve dealt with the guy.”

Both Weed and Bern Ewert, a Charlottesville resident and former Roanoke city manager who is also seeking to challenge Goode as a Democrat, scoff at the suggestion that Goode didn’t know what he was getting into with MZM.

“I think Virgil has lost his way,” Ewert says. “He should have known the difference between a good deal and a bad deal. There are some deals you have to walk away from.”

Weed stops well short of blaming the illegal campaign funds, a small part of Goode’s sizable war chest, for leading to his defeat in the 2004 election.

“I got beat by a handy margin,” Weed says.

But Weed says the repercussions of Goode’s involvement with MZM are not over. He asks where the $9 million earmark came from, wondering if it substituted for other defense programs, like body armor in Iraq. Furthermore, Weed says, the MZM facility in Martinsville could end up being costly for that financially strapped town.

MZM was sold to a private investment firm, and its future is unclear. If the Pentagon decides the Martinsville jobs are unnecessary hometown pork, they could shutter the facility. Taxpayers fronted $500,000 to lure MZM to town and could be left holding the bag if those jobs dry up.

“It may hurt us far more than it helped us,” Weed says of the sweetheart deal Goode helped arrange with MZM.

Whether or not national interest in the MZM scandal ends with the sentencing of Wade and Cunningham, it’s clear that whoever runs against Goode this fall will hammer him with the sordid details. Weed says it proves Goode “cut ethical corners” on the job in Washington.

It’s too early to tell whether Goode’s constituents care about the scandal. Watkins of the Fifth District Republicans says people will view efforts to equate Goode with Cunningham or Wade as nothing but partisan attacks.

“Virgil Goode has a 33-year record in public office,” Watkins says. “Almost nobody questions Congressman Goode’s integrity.” (Paul Fain, C-Ville Weekly, March 7, 2006)

 Project Goode: A timeline

It took Virgil Goode only two years to turn a $48,000 campaign donation into a $9 million defense appropriation for MZM

Undisclosed month, 2002. MZM, Inc. lands Pentagon contract for workers and computer assistance for the U.S. Army’s National Ground Intelligence Center, located in Charlottesville, part of Virgil H. Goode Jr.’s Congressional district.

Undisclosed month, 2003. Goode arranges for an initial federal outlay of $3.6 million for MZM to create an intelligence facility in Virginia’s Southside, also part of his district.

March 2003. At MZM’s Washington, D.C. office, company founder and CEO Mitch-ell J. Wade pays for and collects illegal contributions to Goode’s campaign.

October 2003. Goode contacts Virginia officials about creating the new MZM facility, to be called Foreign Supplier Assess-ment Center, in downtrodden Martins-ville, located in Goode’s district.

October 2003. State officials begin referring to the effort to bring MZM operations to Martinsville as “Project Goode.”

November 2003. Wade, Goode and former Virginia Governor Mark R. Warner announce the deal for the new MZM facility at a ceremony in Martinsville.

November 2004. Goode easily defeats Al Weed, a Democratic challenger, in his re-election bid, receiving 64 percent of the vote. His biggest campaign donor, MZM, gave him $48,511 during the election cycle.

March 2005. Wade collects illegal campaign donations from MZM employees in the company’s Washington, D.C. office.

Spring 2005. Wade asks Goode and his staff to request appropriations funding for the Martinsville facility.

June 2005. Goode’s staff confirms to Wade that an appropriations bill would include $9 million for the facility and a related program. Wade thanks Goode and his staff.

June 2005. A reporter with Copley News Service in San Diego publishes story on a real estate deal in which Wade floated $700,000 to Rep. Randall “Duke” Cunningham, a California Republican.

Fall 2005. As news media begin to probe Goode’s relationship with Wade, Goode offers to reimburse MZM employees and their spouses for donations. Two accept.

November 2005. Cunningham tearfully re-signs from office, after pleading guilty to accepting $2.4 million in bribes.

February 2006. Wade pleads guilty to four criminal counts, including felony election fraud. Prosecutors detail how Wade funneled $46,00 in illegal campaign contributions to Goode.

February 2006. Goode releases a written statement in which he says he was “shocked and amazed” by the details of Wade’s guilty plea. Goode says he had no knowledge that the MZM donations were illegal.—P.F.


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