U.S. Rep. Randy "Duke" Cunningham made the disclosure at a hastily arranged news conference.
"The time has come for me to conclude the public chapter in my life," the eight-term San Diego-area Republican said, reading from a brief written statement. "Quite simply, right now I may not be the strongest candidate."
Cunningham did not take questions before ducking back into a library on the California State University campus in San Marcos.
"What led to Congressman Cunningham's announcement today is exactly why the American people hold Congress in such low esteem," said Democratic Congressional Campaign Committee communications director Bill Burton.
Cunningham has been shadowed by questions concerning his relationship with Mitchell Wade, the founder of MZM Inc., a defense firm.
Wade purchased Cunningham's 3,826-square-foot house north of San Diego in 2003, then put it back on the market and eventually took a $700,000 loss when he resold it a year later. During that span, home prices in San Diego County rose an average of nearly 25 percent.
At the same time, MZM Inc. was increasing its federal contracting business.
Cunningham is a member of the House Appropriations defense subcommittee and the Permanent Select Committee on Intelligence, both of which oversee the kind of classified intelligence work MZM does for the military.
The congressman also faces questions about the arrangement under which he has lived on a yacht belonging to Wade and moored in Washington.
The congressman has said that instead of rent, he has paid at least $13,000 to cover dock fees and other expenses at the club since April 2004. Living on Wade's boat for free would violate congressional ethics rules.
Cunningham has denied any wrongdoing.
Under political fire, Cunningham canceled his annual appearance at a July Fourth pancake breakfast in his San Diego-area congressional district earlier this month. His spokesman said he did so for fear of triggering a media frenzy.
Cunningham is a former Navy "Top gun" fighter pilot and Vietnam War ace. Staunchly conservative, he fit his district well, and won his 2004 re-election with 58 percent of the vote. And despite his background as a military man, Cunningham has a habit of occasionally tearing up while speaking on the House floor if the issue is important to him.