San Diego Each new chapter of the bribery scandal that began last June with the unmasking of now-imprisoned former GOP congressman Randy "Duke" Cunningham seems to bring a new local character to light, revealing to the nation the way business is done in San Diego.
First came Brent Wilkes, the Poway defense contractor, political donor, and San Diego State University backer. Wilkes had ties to a second defense contractor, Mitchell Wade, who pled guilty to bribing Cunningham. Wilkes is also suspected of paying off Cunningham, but he has not yet been charged. Mitchell Wade is reportedly spilling his guts to government investigators.
Six weeks ago, the Wall Street Journal reported that Wade told prosecutors that Wilkes had arranged for a limo service to take prostitutes to "hospitality" suites at the Watergate and Westin Grand hotels in Washington, D.C., for Cunningham's enjoyment. The Feds are investigating whether other congressmen and government staffers partook of the feminine hospitality.
Among those implicated is Kyle Dustin "Dusty" Foggo, an ex-San Diego cop, SDSU grad, and CIA agent. A boyhood friend of Wilkes, Foggo had been appointed to the CIA's third-highest post by Porter Goss, who recently was forced out of his job by the president.
The latest San Diego link was first reported by the Washington Post on May 6: Jerome Foster, a downtown San Diego-based businessman. Foster was on the board of Shirlington Limousine, the company that furnished transportation for the alleged Cunningham assignations. Christopher Baker, Shirlington's owner, has a criminal history that reportedly includes felony charges for attempted robbery and car theft. Foster told the Post that he had befriended Baker at the Watergate Hotel when he hired Baker as a driver. Baker was in money trouble, Foster told the Post, and so he later agreed to join Baker's board in the role of "mentor." Baker, through an attorney, has denied having anything to do with the alleged Cunningham hookers.
In the past two years, Baker has gotten $25 million in contracts from the Department of Homeland Security to transport employees around Washington, D.C. Foster, who ran an energy-management business, had himself gotten contracts with the Navy in the early 1990s.
In 1998 Foster used the same lobbyist as Wilkes: former San Diego congressman Bill Lowery, whose roots in the local GOP establishment go deep. Lowery, who found himself enmeshed in the savings-and-loan scandals of the 1980s, is implicated in influence-peddling allegations against San Bernardino congressman Jerry Lewis, chairman of the House Appropriations Committee.
Who is Jerome Foster?
In late May, Foster, a mild-mannered, 63-year-old African-American Republican, sat down for an interview. Foster worked on local antipoverty programs and later in community relations at Solar Turbines. In 1989, he and several others started a company called Pentech Energy, Inc., whose main business was developing power plants. Foster began the interview by describing his initial encounter with Christopher Baker, the owner of Shirlington Limo.
Foster remembered first meeting Baker during the early 1990s outside Washington's Watergate Hotel. "At the time I was doing some joint marketing with SAIC," he said. Science Applications International Corporation is a big Torrey Pines-based defense contractor. "And we were doing some joint marketing, making some calls with guys back in D.C. That was most of the time I spent there. That only lasted maybe two years at the max."
Foster said he was coming out of the Watergate to get a taxi, and Baker, who was driving a limo, said, " 'Well, I'll give you a ride.' ... And so he dropped me off, and he wanted to know, 'Can I pick you up?' I said, 'Well, it depends on what you charge,' or something like that. And he just started following me around." Foster laughed.
"I guess the first two or three conversations he had with me, [he said], 'It's very seldom I have the chance to talk with a black business guy.' Chris is African-American. I take the time to talk to him. He told me his background and that he'd had some problems with the law. I think one time he told me he was homeless. I really admired him. He's a guy that pulled himself by the bootstraps and trying to make ends meet.
"He had a Town Car -- it wasn't a new one -- and he had a limousine that was pretty old. He hung around the Watergate. He did a lot of business. In D.C. it's kind of like, if you know the guys out front, they take care of you, helping you get rides, clients, or whatever, business and stuff.
"And so, at the time, I grew very fond of him. He was almost like a son. He was trying to get his life together. Go to church. I never seen him take a drink. Naïve, but, in my estimation, a pretty straight guy. I had nothing negative to say about him.
"He was really proud of [his limousine business], really trying to make a go out of it. Sometimes at night he would just come and sit in my room and talk to me till nine or ten o'clock at night. Mostly it was about the business. He had a girlfriend I think he'd been with for years and, you know, at first I thought he might have been gay or something just to hang around me so much!" Foster laughed again.
"He would, like, if I was going out to dinner or something, he would take me and pick me up. We'd come up to my room for a little while, just sit and talk, or whatever. At first I thought it was a little strange. Then over a period of time, you know, he was just a kid to me. I don't know what his chronological age was, but his mental age was pretty young."
Incorporation papers filed by Baker uncovered by Washington Post reporters list Foster as a member of the board of Shirlington Limousine, but Foster said he has only hazy recollections of his involvement with the firm and couldn't recall its name, at first calling it "Sheraton."
"I don't remember joining the board of the company, okay?" he said laughing. "I told this to the lady at the Washington Post. I do vaguely remember when she told me I was on the board. She said, 'We have you down on the board.' I did remember Chris one time asked me about being on this board, and I probably said yes. I don't even remember the details. I remember him having a conversation with me that he was trying to pursue some contracts. I think it was with the city of D.C.
"All the blacks in D.C. live on governmental contracts; that's their livelihood. I think it was with the city or the school or something, and he has to have a board or whatever, and I vaguely remember him asking me to be on the board, and I probably said yes. But I didn't even know I was on this board."
Foster does remember introducing Baker to Brent Wilkes sometime in the early 1990s, but, "It wasn't like a personal introduction," Foster said. "Brent and I were going to dinner, and Chris drove us. Brent met Chris that way."
Foster says that the company was initially capitalized by an investment from Enterprise Partners, a La Jolla-based venture capital fund. A Union-Tribune report says that Sempra Ventures, a venture capital fund operated by the utility giant, had made a $14 million "third round" investment in the firm, but Foster said he did not remember any details of that.
The federal contracts awarded to Pentech, Foster said, were the result of competitive bidding. "We got government contracts early on. Probably early '90s. They were what you called low-bid contracts. The lowest bid won. One of them was dealing with maintaining a turbine," he recalled. "Then we got an environmental contract. I forgot the dollar amount of it. It was a low-bid situation. It's the kind of contract that mostly small firms -- they're not major or anything."
Foster said that he first met Brent Wilkes in San Diego when Wilkes approached him to offer his marketing services. Wilkes said he could be helpful to Foster by introducing him to powerful federal officials who might be in a position to offer government contracts to Pentech.
"Brent had made a call on us here in San Diego," recalled Foster. "I think Brent and I probably met a total of three times, one time at the Pentech office, one time at his office in D.C. Last time I saw Brent was the time when we went to dinner in D.C.
"His interest was in helping us market the product to the government. It didn't make a lot of sense to me. We had two or three government contracts, and my conclusion was that you can't make money off of government contracts. We were phasing out of that anyway."
Foster explained, "With all of them it was kind of like work orders...even though it had a dollar amount fixed to it. We went out and hired a bunch of people not really understanding you only work when you get called to work. So we ended up creating a lot of unnecessary overhead. It was not very sophisticated. We lost so much money on those things in the end."
Of the marketing service that Wilkes was offering, Foster said, "To my knowledge, there was nothing illegal about it. He would help us sell to the government for a fee, which, I understand, you can do that. To me it didn't make sense because if I had to turn around and give him a fee, you don't make a lot of money off the government anyway. Strategically it didn't make a lot of sense to me...[but] it wasn't a kickback scheme."
Pentech's 1990s partnership with defense contractor SAIC was brief, Foster said. "In those days -- and I think they still do it -- companies come along when you're a minority firm, companies like SAIC come along, and want to be part of your company. Forty-nine percent, you use your minority content to keep your contracts. I never wanted to play that game, and our relationship kind of went south."
To qualify for the set-aside contracts, Pentech's owners had to be economically disadvantaged. "I think the big thing with SAIC," Foster continued, "the disadvantage to them was the fact that we...could not get set-aside projects, contracts. That was the initial thinking, that I would fill out the paperwork, we would qualify. You couldn't own property. I don't remember the details of it, but we didn't qualify. We looked at it, but neither one of us, the minority owners, was willing to lie on the documents."
Foster also found that he was uncomfortable with the role of the minority business. "What happens in those contracts, if you're successful, the big company does the real work and the minority company does a couple of pieces, something that doesn't deal with your credibility. But you're not doing the real work. SAIC would be doing the real work. Once that began, I began to understand those kinds of things and the fact that the cost of doing business in D.C., pursuing contracts, is extremely expensive, and we didn't have those kind of dollars. It's just a very expensive process. And that was not what we started out to be. We only got into contracts because the power-development business is such long-term, and the thinking was, let's bring some revenue in now while we're going through the development process of the projects. And so it was never a major focus of our business anyway until SAIC took an interest.
"The initial thrust at Pentech," Foster said, "was independent power development, which is developing power plants. We worked together through joint ventures with companies like Canadian Utilities, Williams Company.... It went well until the mid-'90s. See, what made a company like us be able to survive with small players is that...a utility could only own 49 percent of their independent power -- joint ventures through utilities. And when they went through the deregulation, where utilities could own 100 percent, our value dropped. Whatever they had, they can go ahead and do it themselves."
Foster said that after the mid-1990s, he never had contact with Baker or Wilkes again, and he never attended any of the Watergate poker parties that Wilkes and his associates participated in with Cunningham and other congressmen. He stressed that he had no knowledge of prostitutes being employed there.
"I don't have any knowledge of that. Never participated in any of it, knew anything about it. Zero. Chris was not, during the time that I knew him and was going to D.C., I didn't know of any of those things, okay?" he said. "There was nothing like that going on -- not to my knowledge, anyway.
"I knew that [Baker] had some scuffs with the law. He shared that with me, yeah. I knew that he had been in trouble. It's one of the reasons I admired him. He was pulling himself up by his bootstraps. He was trying to do something legit, he was trying to get a company going, stay out of trouble, whatever. I didn't even know what the felony was. I didn't even know it was a felony. I knew he had some problems with the law.
"I really admired him for having two cars and trying to make something out of his life. What his relationship evolved into with Brent, I don't know what it evolved into. I wasn't around."
Foster added that he had virtually no dealings with Cunningham. "The first time I met Cunningham -- I think I was at a Pete Wilson function -- and he came up with a piece of paper. He scribbled that he was running for Congress.... That was the extent of the relationship."
By 1997, Pentech had been transformed into Pentech Energy Solutions. "We came up with a product," Foster explained. "We decided to tear the company down to the original founder and maybe one or two other people, and we developed a product called PERC. And from there we got venture capitalist funding, and we decided to take the project to another level."
In August 1998, according to federal lobbyist registration filings, Pentech Energy Solutions retained the services of Copeland, Lowery, and Jacquez, the Washington lobbying and governmental relations firm. Lobbyist Bill Lowery, the former San Diego city councilman and ex-GOP congressman, worked for Wilkes and is now said to be under investigation in connection with his lobbying of former GOP house colleague Jerry Lewis. The filing says that Pentech hired Copeland, Lowery to perform "marketing to government [an] energy efficiency device for home/business heating and cooling systems" and was paid $10,000.
The same year, Foster began contributing to congressional candidates, including then-GOP congressman Brian Bilbray, to whom he gave $500 the same month that he retained Lowery. In April 1999, he gave $1000 to Congressman Jerry Lewis.
Foster recalled his relationship with Lowery. "I didn't know him personally. I would never say that Lowery and I were friends or anything like that," said Foster. "We gained a mutual respect for each other during some of his campaigns for Congress.
"The reason I used his firm is, I was at an event and bumped into Bill," he recalled. "I talked with him and he said to give him a call. And so I called his office, and he passed me on to some people. I think I did business with him about two or three months at the most, if it lasted that long. We couldn't afford it."
According to Foster, Lowery was supposed to perform much of the same service that Wilkes had offered. "They introduced us to the different agencies. They focused on environmental agencies," he said. "So we had exactly maybe two or three meetings with him, and that's about it. We didn't have a lot of resources to pursue that effort at the time.
"The reality is, especially in San Diego, when you're a black guy, and especially a few years ago, and you run around in those circles, you're a small player. You're not a major player," he said. "People treat you nice, it's good to see some black faces around. You're not in the 'in' crowds. You don't get invited to those things. It was, like, 'Hi, Jerry, glad to see you.' Pat on the back."
Foster added that in addition to his race, the relatively small size of the campaign contributions he was able to afford also kept him out of Washington's big leagues. "You're not a major player with $500 checks, you know that. And being black, you're never in the in crowd. The only thing, you really get used, with a face in a crowd. If somebody thinks you have an advantage, give them a contract or something like that, they'll put their arms around you."
Foster said he departed Pentech before it was sold in 2002 and does not know anything about its ultimate fate. "I started that company in 1989 and kept it going until 2000. I did a few things right. And a lot of dumb things," he said, adding, "There were times we made money and there were times we lost money, but I think we did okay. We had some $20 million in revenue at one time."
He said he left Pentech as a result of a nasty divorce battle. "I asked to step down. I was going through a divorce. I had carried that company on my back since 1989," he remembered. "I didn't think I was the best person, given the fact that I was stressed out, suffering from depression. I wasn't aware of it at the time. I decided that it wasn't the best fit.
"First time I asked to step down I was told no. But they didn't know I was going through a divorce. When I told them I was divorcing they were okay with it. So I stepped down as CEO and became president." Three months later, Foster said, he left altogether and subsequently suffered a long period of emotional hardship brought on by bitter court battles with several ex-wives.
"I went through three years of very deep depression. I went in for a physical and the doctor looked me deep in the eyes and said, 'I've been dealing with you for a long time, and something's wrong with you.' So I went on some meds."
In a September 1999 divorce case, Foster had squared off against Terry Holladay, who, according to court records, was a tennis pro at the Rancho Valencia Resort in Fairbanks Ranch. Angry allegations were exchanged about Foster's drinking habits.
According to a police report, Holladay said that "Foster has often stated that he's 'losing it' and that he needs help. She said Foster believes his behavior towards her stems from his insecurities due to trauma of his ex-wife's infidelity."
In the same case, Foster's former business partner John Mellor filed a sworn affidavit against him. "Unfortunately, it appears that almost everyone who gets involved with Jerome on either a business or personal level ends up disillusioned, angry and usually financially and emotionally worse off for the experience," begins the May 11, 2001, statement.
"During my association with Pentech and Jerome, I witnessed a number of instances of alcohol abuse on his part which led to diminished capability to undertake job functions," Mellor alleged. "Failure to perform included missing flights, nonattendance at meetings, and several instances of what might be considered sexual harassment.
"On a personal front, I loaned Jerome over $20,000 which he committed to repay from the share of any profits developed by Sanshell LLC -- the corporation developing the Memphis generating project. When that project folded, he refused to repay the loan, citing the fact that his salary was being attached by other people to whom he owed money and that all remaining income was unavailable for various reasons. Given past history, I didn't feel it was worth pursuing a legal remedy to recover this loan."
During the interview, Foster flatly denied all of Mellor's charges and said they were made by a disgruntled former colleague.
After the Holladay marriage ended, according to court records, Foster married Birgit Mayer, who also went by the name Rachel. In April 2003, and again in August 2003, Foster filed court actions to dissolve the marriage.
In a sworn statement dated May 5, 2004, Foster, who had married Mayer in October 2002, said that shortly afterwards, "I became informed that Respondent was unable to engage in normal copulation" and that the condition was "incurable." Foster added that he and Mayer, whom he had met on the Internet, "were only married and living together for about 26 days."
In the interview, Foster said that he had been told by his attorneys to sign the statement, which he said was not true, in order to receive the annulment. "That's what my lawyers put down. She was from Germany, and she wanted me to marry her so she could stay in this country. And I was dumb enough to do it for a couple seconds. My lawyer said you have to put something down like that."
Finally, Foster said, he began to put his emotional troubles behind him and climb out of the shadows. He said he is now "clean" and has rebuilt his life. "Basically, I played around with some startups, that kind of thing, but couldn't focus on anything like that. So I got into the renewable business because, one, dealing with the government is something I know. There's a demand and a market for renewables. And it provides some benefit to the world." He declined to identify investors in the new business.
"There's nothing there," he said regarding the unwanted attention he has received since the Shirlington Limo scandal broke. "The contracts we had was low-bid. I barely even met Brent. Never did any business with Brent. And I happened to know Chris. That's the extent of it. That's the reason I came down here, really, you know. It's kind of like...I have nothing to hide. So maybe if I talk to them or whatever we can put this behind us. There's nothing there. I would welcome a conversation with the FBI. There's nothing there!"