Senator Feinstein's War Profiteering

Democratic Blood Money

By JOSHUA FRANK

04/05/07 "ICH" - - -- - Democratic Senator Dianne Feinstein of California silently resigned from her post on the Military Construction Appropriations subcommittee (MILCON) late last week as her ethical limbo with war contracts began to surface in the media, including an excellent investigative report written by Peter Byrne for Metro in January. MILCON has supervised the appropriations of billions of dollars in reconstruction contracts since the Bush wars began.

Feinstein, who served as chairperson and ranking member for the committee from 2001-2005, came under fire early last year in these pages for profiting by way of her husband Richard Blum who held large stakes in two defense contracting companies. Both businesses, URS and Perini, have scored lucrative contracts in Iraq and Afghanistan in the last four years, and Blum has personally pocketed tens of millions of dollars off the deals his wife, along with her colleagues, so graciously approved.

Here’s a brief rundown of the Feinstein family’s blatant war profiteering. In April 2003, the U.S. Army Corps of Engineers gave $500 million to Perini to provide services for Iraq's Central Command. A month earlier in March 2003, Perini was awarded $25 million to design and construct a facility to support the Afghan National Army near Kabul. And in March 2004, Perini was awarded a hefty contract worth up to $500 million for "electrical power distribution and transmission" in southern Iraq.

But it is not just Perini that has made Feinstein and Blum wealthy. Blum also held over 111,000 shares of stock in URS Corporation, which is now one of the top defense contractors in the United States. Until 2005 Blum was an acting director of URS, which bought EG&G, a leading provider of technical services and management to the U.S. military, from the neocon packed Carlyle Group back in 2002.

"As part of EG&G's sale price," reports the San Francisco Chronicle, "Carlyle acquired a 21.74 percent stake in URS -- second only to the 23.7 percent of shares controlled by Blum Capital."

URS and Blum have since banked on the war in Iraq, attaining a $600 million contract through EG&G, which Sen. Feinstein permitted. As a result, URS has seen its stock price more than triple since the war began in March of 2003. Blum has cashed in over $2 million on this venture alone and another $100 million for his investment firm.

And it is not just the Feinstein family that has benefited from the war -- so too has the Democratic Party. Since 2000, the Democrats' Daddy Warbucks has donated over $100,000 to the Democratic Senatorial Committee along with leading Democrats including John Kerry, Robert Byrd, Ted Kennedy, and even Barbara Boxer.

Feinstein’s resignation from MILCON was the least the senator could do to atone for profiting off the spoils of war. But Feinstein wasn’t trying to atone, she was trying to cover her tracks. If the Democratic Party had any foresight whatsoever it would return all the Blood Money donated by Blum. From there the Senate ought to hold hearings and examine Feinstein’s tenure as the chair and ranking member of MILCON and analyze every single contract she approved which benefited her husband’s respective companies.

There is absolutely no question -- Sen. Dianne Feinstein has a plethora of ethics violations she needs to account for at once.

Joshua Frank is the author of Left Out! How Liberals Helped Reelect George W. Bush and edits www.BrickBurner.org