The CIA’s former No. 3 official was charged Tuesday with accepting lavish vacations, private jet flights and a job offer from his best friend, a defense contractor who in return is suspected of getting inside information that helped him win agency contracts.

A federal grand jury returned 11 counts of fraud, conspiracy and money laundering against Kyle “Dusty” Foggo, executive director of the CIA until he resigned in May, and San Diego defense contractor Brent Wilkes.

Foggo is the highest-ranking CIA officer to be charged with crimes allegedly committed while working for the agency. The charges grew from the bribery scandal that landed former U.S. Rep. Randy “Duke” Cunningham in prison.

According to the indictment, Wilkes offered Foggo a high-paying position and reserved him an office in the executive suite when he built the new headquarters of the Wilkes Corp. in late 2002.

Wilkes is also accused of paying for Foggo and his family to join Wilkes and his family on a vacation in Scotland in August 2003, doling out $12,000 for private jet flights, $4,000 for a helicopter ride to play golf and $44,000 for a stay at an estate.

In addition, Wilkes spent more than $1,600 on prostitutes for himself and Cunningham at a Hawaiian resort in August 2003, the indictment alleges.

Foggo is accused of arranging that fall for one of Wilkes’ companies to be a middleman in selling bottled water to the CIA. In December 2003, Wilkes introduced Foggo at a party at Wilkes’ headquarters in Poway, Calif., as a future executive.

Foggo and Wilkes, both 52, are accused of making illegal money transfers of $815,000 in government contract funds from a Virginia shell company to Wilkes’ companies.

Foggo and Wilkes could each be punished by up to 20 years in prison if convicted.

“High government positions and powerful connections should not be tickets to corrupt self-enrichment,” said U.S. Attorney Carol Lam.

The charges are a blow to the CIA, whose director, Michael Hayden, wrote to employees Tuesday that the agency continues to cooperate with the investigation.

In a separate indictment, Wilkes was charged with 25 counts of conspiracy, bribery, money laundering and unlawful monetary transactions to Cunningham in return for government contracts.

A man who was described as a co-conspirator in Cunningham’s 2005 plea agreement, mortgage banker John T. Michael, faces one count of obstructing justice.

Wilkes could be sentenced to up to 20 years in prison if convicted on the second indictment. Michael faces up to five years if convicted.

Mark MacDougall, an attorney for Foggo, and Mark Geragos, an attorney for Wilkes, did not return calls seeking comment. A message seeking comment from Michael was also not returned.

The charges came 20 months after the FBI opened an investigation into Cunningham, who served on key House committees with oversight of government contracts. He pleaded guilty in November 2005 to taking $2.4 million in bribes from defense contractors and was sentenced to more than eight years in prison.

Investigators quickly turned to Foggo and Wilkes, who played high school football together. After graduating in 1972, they roomed together at San Diego State University, were best men at each others’ weddings, and named their sons after each other.

Foggo was named executive director of the CIA in 2004. He resigned in May under investigation by the FBI, the Internal Revenue Service, the Pentagon’s Defense Criminal Investigative Service, the CIA’s inspector general and the U.S. attorney’s office in San Diego.

In the past two months, Wilkes’ wife has filed for legal separation, and he defaulted on a $7.5 million personal loan.


Associated Press writer Katherine Shrader in Washington contributed to this report.

Copyright © 2007 The Associated Press

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