Latest News

Disgraced defense contractor planned to promote democracy in Iran

WRITETHRU (EDITORS: In 10th graf, provides new information.)


WASHINGTON—In a new example of disgraced defense contractor Mitchell Wade's attempts to exert influence in Washington and beyond, Wade and two business partners formed a nonprofit group in 2004 to promote democracy in Iran, according to documents and interviews.

Wade and the two partners, who have been large contributors to Republican political campaigns, formed the Iranian Democratization Foundation in April 2004, according to incorporation papers filed in Washington.

The timing coincides with a push by opponents of the theocratic regime in Tehran to appropriate more money for democracy programs.

In November 2004, Congress approved spending $3 million to promote democracy in Iran. Secretary of State Condoleezza Rice last month asked Congress for a large boost in funding, to $75 million.

Behrooz Behbudi, who helped incorporate the foundation, said in a telephone interview that Wade "was supposed to get funds from the Congress" for the project. The two later fell out over business dealings in Iraq, Behbudi said.

Wade, who headed contractor MZM Inc., pleaded guilty last month to bribery-related charges and making illegal campaign contributions. His chief congressional patron, former Rep. Randy "Duke" Cunningham, pleaded guilty in November to taking bribes.

Wade's dealings, which include contracts MZM received from Pentagon intelligence agencies, are under investigation.

A phone call to Wade's lawyer seeking comment wasn't immediately returned.

Much is still unclear about the Iranian Democratization Foundation, including whether it ever took in money or carried out any activities. It was dissolved in November 2004 and apparently never filed federal disclosure forms required of nonprofits with more than $25,000 in income.

The foundation's existence was first reported this month by the Web log Talking Points Memo.

Behbudi, who lives in West Vancouver, Canada, and whose family was close to the late shah of Iran, said Wade apparently saw him as a conduit for helping expand his activities in the Middle East.

Behbudi said he was introduced to Wade by New York-based real estate developer Sonny Lee, the third officer of the foundation. The foundation's listed address was the same as MZM's.

"We wanted to bring freedom to the people of Iran, freedom from the mullahs," Lee said in a brief telephone interview. The project was stopped "after the government told us they would take care of that themselves," he said. He didn't elaborate.

Behbudi and Lee donated heavily to Republican political causes, according to federal records.

Behbudi gave $17,000 to the National Republican Senatorial Committee in 2003 and $1,250 to President Bush's 2004 re-election campaign.

Lee gave at least $41,250 to the Senatorial Committee and $2,000 to Bush. A biography on the Rotary Club of New York's Web site says Lee was twice awarded the Medal of Freedom by the National Republican Senatorial Committee.

Lee, chairman of the Great American International Development Corp., called Wade "a good Christian man" and said they met through Wade's wife, Christiane.

Behbudi said he and Wade had a deal to try to get a contract to rebuild the gutted Central Bank of Iraq headquarters building in downtown Baghdad.

Behbudi said he traveled twice to Baghdad soon after the fall of Saddam Hussein's regime and "came up with the most beautiful building" design for the new headquarters.

"Mitch was supposed to come up with the contracts and secure the funds. I was supposed to do the work," Behbudi said. But, he said, Wade never paid him for the design work.

Behbudi's account couldn't be independently confirmed. He said he had a signed contract with Wade, but had to check with his business partners before making it public.

Available contracting records show MZM got one contract for Iraq reconstruction, a $5 million award in March 2003 to provide linguists and interpreters for the Pentagon.


(Jonathan S. Landay of Knight Ridder Newspapers contributed to this report.)


(c) 2006, Knight Ridder/Tribune Information Services.

Need to map