Tuesday, July 05, 2005

Duke Won't Shop Local

When I read about Congressman Randy "Duke" Cunningham's most recent financial shenanigans, I wasn't appalled or even shocked. After all, why only sell yourself once, when there are willing buyers? Duke's deal to sell his yacht, the Kelly C, and live on the boat Mitchell Wade bought for him instead looks to be a no-brainer. I am disappointed that Duke cut this deal for only a $400,000 profit. That's hardly in the same league as his $700,000 payoff from Wade for the Duke's Del Mar home.

Actually, when I read that Duke financed his Rancho Santa Fe house through a company named Coastal Capital, I assumed that Duke was, at least, shopping his mortgages locally.

Then I discovered that the Coastal Capital Corporation that most likely financed the Duke's first and second mortgages was located in Greenvale, New York, just a short drive from the Glen Head estate of Duke’s newly discovered financial angel, Thomas T. Kontogiannis.

Kontogiannis' daughter and nephew run Coastal Capital and apparently were willing to provide Duke loans at the wholesale rate as opposed to the normal retail rate that you or I would pay. In addition they apparently provided Duke with a very special second mortgage on his $2.55M Rancho Santa Fe home. A mortgage where Duke didn't have to make payments. At least that's how Mr. Kontogiannis described it in the Washington Post:

“Kontogiannis said Cunningham asked him last year to pay back the Kelly C loan, which was accruing interest at about 3 1/2 percent, by paying off the second mortgage on the house. Interest on the congressman's loan was accruing at 10 percent, though Cunningham wasn't making payments, he said.”

There may be a completely innocent explanation for the Duke's payment free loan. I'm sure many of his constituents would like to hear it.