Federal authorities are investigating allegations that a California defense contractor arranged for a Washington area limousine company to provide prostitutes to convicted former congressman Randy "Duke" Cunningham (R-Calif.) and possibly other lawmakers, sources familiar with the probe said yesterday.
In recent weeks, investigators have focused on possible dealings between Christopher D. Baker, president of Shirlington Limousine and Transportation Inc., and Brent R. Wilkes, a San Diego businessman who is under investigation for bribing Cunningham in return for millions of dollars in federal contracts, said one source, who requested anonymity because the investigation is ongoing.
Baker has a criminal record and has experienced financial difficulties, public records show. Last fall, his company was awarded a $21 million contract with the Department of Homeland Security to provide transportation, including limo service for senior officials. Baker and his lawyer declined to comment yesterday.
New scandal for the Watergate Hotel
The Cunningham investigation's latest twist came after Mitchell J. Wade, a defense contractor who has admitted bribing the former congressman, told prosecutors that Wilkes had an arrangement with Shirlington Limousine, which in turn had an arrangement with at least one escort service, one source said. Wade said limos would pick up Cunningham and a prostitute and bring them to suites Wilkes maintained at the Watergate Hotel and the Westin Grand in Washington, the source said.
Cunningham resigned from Congress after pleading guilty last November to accepting $2.4 million in bribes from four co-conspirators, including Wilkes and Wade. The former lawmaker was sentenced to eight years and four months in prison. Wade pleaded guilty to his part in the scheme in February and is cooperating with investigators. Wilkes has not been charged.
The allegations about prostitutes were reported this week by the Wall Street Journal. Asked yesterday about the allegations, Wilkes's attorney, Michael Lipman of San Diego, said: "My client denies any involvement in that conduct." Cunningham's lawyer, K. Lee Blalack II, declined to comment.
The San Diego Union-Tribune yesterday cited a letter from Baker's lawyer, Bobby Stafford, saying that Baker "provided limousine services for Mr. Wilkes for whatever entertainment he had in the Watergate" from the company's founding in 1990 through the early 2000s. The letter also stated that Baker was "never in attendance in any party where any women were being used for prostitution purposes." Reached by telephone yesterday, Stafford would not comment on the letter.
Laundry list of problems
Before starting Shirlington Limousine, public records show, Baker compiled a lengthy criminal record. Between 1979 and 1989, he was convicted on several misdemeanor charges, including drug possession and attempted petty larceny, as well as two felony charges for attempted robbery and car theft, according to D.C. Superior Court records.
The Internal Revenue Service filed a tax lien against Baker in 1996. He lost his house in 1998, and he filed for personal bankruptcy protection in 1998 and again in 1999.
Although Baker's company began receiving small federal contracts in 1998, it also fell into debt, records show. In early 2002, Arlington County Circuit Court ordered Shirlington Limousine to pay American Express Travel Related Services Co. $55,292.
That summer, Howard University terminated a contract with Shirlington Limousine to supply shuttle bus service, citing poor service and other problems.
In 2003 and again in 2004, the company received eviction notices for an office it maintained in a luxury D.C. apartment building. And in September 2004, the company was sued in D.C. Superior Court for $1.8 million, for failing to make payments on buses it bought for the Howard contract. The case was settled last month, with Shirlington Limousine agreeing to pay $300,000.
Doing business with the feds
During these financial troubles, Baker's company won a contract worth $3.8 million with the Department of Homeland Security in April 2004. It appears from federal records that Shirlington Limousine was the only bidder. The contract was awarded under a program that limited competition to businesses in poor neighborhoods.
Baker was able to close his bankruptcy case last April after he made nearly $125,000 in payments to creditors, according to court records.
The Homeland Security Department said it awarded Shirlington Limousine, one of three bidders, another one-year contract for $21.2 million in October.
Homeland Security spokesman Larry Orluskie said the department does not routinely conduct background checks on its contractors. Instead, it relies on a list the government keeps of vendors who have had serious problems with federal contracts, he said.
In Shirlington Limousine's case, only the drivers were subject to criminal background checks, he said.
Record of good service
Past performance is one key factor the government weighs in awarding a contract, Orluskie said. But he said he did not know whether contract officers checked with Howard University before awarding Shirlington Limousine its first contract.
He stressed that Shirlington Limousine has performed well, saying: "We have not had any problems with this service -- we don't question whether they can deliver because they are delivering."
Steven L. Schooner, an associate professor and contracting expert at George Washington University Law School, said that although there is no explicit prohibition against giving contracts to felons or people with poor business histories, the government is obligated to ensure that potential vendors have a satisfactory record of business ethics and integrity, and that they have the financial resources to meet contractual obligations.
"There's a fundamental government responsibility to investigate," he said.
Researcher Alice Crites contributed to this report.