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How Dianne Bloomed With Blum

Dianne Feinstein just won reelection this year, so maybe we should talk about her. She has prospered throughout her marriage with her husband, financier Richard Blum. She and her husband have been involved with corrupt military contractor practices, a troubled real estate firm, and a plot to secretly serve as German government agents in an organized crime scheme. Republicans now seem to have a grudge against her for her conduct during the Kavanaugh hearings. So why aren’t they investigating credible allegations of corruption? She also had a more progressive Democratic challenger in Kevin De Leon, who did little to bring up her troubled ethical history.


CBRE is a highly successful real estate firm that Richard Blum invested in and served as a director of. After CBRE, a firm that her husband owned shares in received an above market value contract to sell foreclosed properties from the FDIC, she strangely introduced a bill to give the FDIC more funding for a pet project of the agency’s chairwoman. Her husband’s investment firm bought more shares of CBRE shortly before the contract was awarded (it's possible that insider trading occurred), which helped provide necessary business for the troubled firm (it had faced significant losses from the 2008 financial crisis). Her husband’s company CBRE was granted an exclusive contract to sell Post Office real estate and sold Post Office property at below market rates to its clients and investors. CBRE also received a military contract that she pushed for.


When it comes to military contracts CBRE is nothing. It's their investments in Perini and URS that deserve far more scrutiny. Dianne Feinstein’s husband owned significant investments in military contractors Perini and URS. A Perini executive claimed that he gave her information about specific projects that the company had before her subcommittee so that she could recuse herself. Instead Feinstein refused to recuse herself and worked to help the companies get more contracts. Congress is rarely briefed on specific contractors for these types of projects, so without the list given to her by the executive she wouldn’t have known that her husband’s companies were involved in the project. She also supported more military construction projects when both companies had open-ended contracts. Around the time that Feinstein resigned from her subcommittee her husband sold his stakes in the contractors and she then called for winding down the U.S. invasion of Iraq.

Richard Blum’s Perini Corporation was sued by San Francisco for massive fraud in the construction of the airport. The fraud included inflating costs, faking delays, and setting up minority owned front companies to claim affirmative action benefits. They were also investigated by the Massachusetts Attorney General for false claims made in their “Big Dig” project. One of the front companies for minority business, Scott Norman Mechanical, had its parent company and an executive plead guilty to federal wire fraud charges. Tutor Saliba and Perini partnered on these projects and the name of Perini was changed to Tutor Perini following the sale of Richard Blum’s shares. Ronald Tutor was the head of both of these companies so they worked in lockstep even before the merger. The company also paid the US government money to settle fraud claims involved in the construction of Embassy buildings in Venezuela.

Then there's the story of DHL. DHL as a German company controlled by the German government wasn’t allowed to ship air freight in America. So they sold the company to partners and they guaranteed the loans of the partners who they sold the company too. This included Richard Blum and his friend Michael Klein who was also a lawyer for DHL. Their competitors, FedEx and UPS, complained to the government that the new company, Astar Air Cargo, was still controlled by the German government because of the strange financing and because Klein was their lawyer.

Astar had at one point 90% of its business coming from DHL and in a Department of Transportation hearing Astar’s lawyer stated that “You don’t have the gun. You don’t have the smoke.” Both an administrative judge and the Department of Transportation ruled in Astar’s favor after ownership of the company was transferred to a DHL executive, Richard Blum, and one of his best friends, who was also a lawyer with DHL as a client. This all occurred after a law passed in 2003 specifically called for an administrative judge to review the matter after and Inspector General found problems with the Department of Transportation review process. Dianne Feinstein directly worked on the law instead of recusing herself. The law contained a provision restricting Astar and ABX Air from getting government contracts since they had too much foreign business. Nevertheless, Astar was supposed to lose its federal government contracts but was able to maintain US government contracts when it shut down a decade later. The government was the only other significant customer besides DHL. Was Feinstein involved (much like she was with Perini contracts)? DHL’s contract with Astar restricted their ability to service other companies (including competitors like FedEx and UPS) and to sell the company without DHL approval. Their financing agreement also restricted the company from doing other business besides air freight. DHL also used ABX Air which they also spun off and kept contracts with them. Later, DHL purchased some shares of Astar back and Astar then tried to buy ABX back in order to seize full control of DHL’s US air freight business. Why did the partners sell some of their stock back to DHL? DHL eventually cancelled their Astar contract (several years before its expiration), but not their ABX Air contract. ABX after a series of mergers now ships for a variety of customers including DHL, the federal government, Air Jamaica, and Amazon Inc. Astar promptly shut down, which goes against what Department Of Transportation stated, since they didn’t really do that much business independent of DHL, and because they immediately shut down (Department of Transportation claimed that they would make a “bonanza” if they lost their contract). How did Astar and its owners pay off its debt? Did Richard Blum and his partners commit some form of securities, bank/financial institution, wire or mail fraud and racketeering? The backdoor deal directly hurt trade negotiations with the European Union, since US companies couldn’t directly own freight airlines there, while DHL used an illegal loophole here with Feinstein’s husband.


I don't know what's more surprising the fact that know one brings it up or the fact that she's still in the Senate.



 
 
 
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