The marriage of Sen. Dianne Feinstein and financier Richard Blum: A win-win, public-private partnership for graft

Richard Blum, UC regent and former chairman of the regents, major stockholder in Tutor Perinni Corp, which won the bid to construct the first leg of the California high-speed railroad, and chair of the board of CB Richard Ellis, in charge of selling decommissioned post offices, is -- as everyone knows -- the husband of US Sen. Dianne Feinstein, chair of the Senate Select Committee on Intelligence. Feinstein remarked yesterday that the leak that in secret Verizon has turned over to the NSA information about the private communications of its American customers ought to be prosecuted because we have "a culture of leaks."
Badlands Journal editorial board
Merced Sun-Star
Board approves Calif. high-speed rail construction…JULIET WILLIAMS, Associated Press
SACRAMENTO, Calif. The board that oversees California's High-Speed Rail Authority on Thursday unanimously approved a nearly $1 billion contract to start construction on the first leg of the $68 billion bullet train in the Central Valley, clearing the way for work to start as soon as this summer on what officials have said will be a tight construction timeline.
The bid from a California-based joint venture was the cheapest out of five received by the state to begin work on the first 30-mile section from Madera to Fresno. But it also had the lowest technical rating for safety and design, drawing public scrutiny and prompting more than an hour of questions to the high-speed rail authority staff from board members.
The board ultimately voted 6-0 to approve the $985.1 million bid.
High-speed rail opponents raised questions at the meeting about the potential for cost overruns and the financial health of the lead company, Sylmar-based Tutor Perini Corp.
The company is embroiled in a legal dispute over the 26-story Harmon Hotel in Las Vegas, a gleaming glass property built by Tutor Perini but never opened. Its owner, MGM Resorts and subsidiary CitiCenter Land LLC, want the structure torn down even before a jury hears a nearly $500 million construction defect lawsuit next January, arguing that the building is not structurally sound and could collapse in a strong earthquake.
Tutor Perini argued before the Nevada Supreme Court this week that tearing down the building would destroy evidence of good work and leave the impression in jurors' minds that the builder was at fault.
Separately, a group called Californians Advocating Responsible Rail Design submitted a letter to the board Thursday saying that Tutor Perini has had three "material changes" to its financial status that would disqualify it from being selected. They include a downgraded rating from Moody's in September 2012 based on the company's "weaker than expected operating earnings and debt levels."
The company's chief executive officer, Ron Tutor, dismissed the criticism as "all nonsense" fanned by the media "to create controversy that doesn't exist." He said his company's net worth exceeds $1 billion.
"Like most of the uneducated opinions you hear where we can't rebut them, they're not based on anything factual or real," Tutor told reporters. "We've built more large civil works programs in this state than anyone else, virtually all of them successfully and without the cost overruns they all allude to."
Most of the board's questions appeared intended to enshrine their scrutiny in the public record, though none was overly critical.
"The questions really boil down to, can the successful bidder do the job, and will they do it within the confines of the contract as contemplated by the authority," said board member Jim Hartnett. "The questions that I had were answered to my satisfaction."
The contract calls for clearing land and buildings from the proposed bullet train path, creating grade separations and tunnels and diverting some waterways. Contractors will create the foundation for a train track without actually laying any track.
Board Chairman Dan Richard did not vote or participate in the conversation because he had previously worked with one of the firms involved in the bid, Parsons Corp.
The bidding process also was criticized after it was revealed that the authority changed its rules after the process was first made public, allowing the cheapest bid to be selected even though it had the lowest technical rating for safety and design quality. The bid came in below the authority's estimated cost of $1.2 billion to $1.4 billion.
Under the new criteria, all the bids that met the technical criteria were considered, leaving the door open for the proposal from Tutor Perini-Zachry-Parsons.
The total cost of each bid was kept in sealed envelopes while the other criteria were weighed, including a three-step technical review to ensure the bids met all the qualifications, the authority's chief counsel, Tom Fellenz, said Thursday. The technical criteria were based on safety measures, engineering, scheduling, design quality, project approach and solutions to possible construction problems.
Fellenz told the board "the integrity of the process was pristine."
The competing firms will also receive a payout of $2 million each and the rail authority will get to keep the engineering and design work they submitted in their proposals.
Lawmakers approved the first phase of the planned 800-mile line last summer, allowing the state to begin selling $2.6 billion in bonds for construction and tap $3.2 billion from the federal government. The money is contingent upon completing the first phase of the project by 2017, requiring what officials say is an unprecedented construction pace.
But the authority intends to first begin spending federal funds as it awaits the outcome of a lawsuit filed by Kings County officials and landowners seeking to stop the state from spending the proceeds of $10 billion in bonds approved by voters for the project in 2008.
They argue that plans for the high-speed rail line have changed so dramatically since California voters approved Proposition 1A that they no longer comply with what voters were promised.
The case is pending before a Sacramento County Superior Court judge.
San Francisco Chronicle
Grim outlook for post office buildings
Andrew S. Ross
The U.S. Postal Service's move last week to end Saturday mail delivery can't bode well for efforts to save a number of historic post offices being sold in California, with possibly more to come.
Currently, at least 12 post offices have been sold or put on the block in Northern California. A public hearing on a contested proposal to sell Berkeley's main post office is scheduled for later this month.
Along with the move to five-day mail delivery, selling post office buildings is part of the Postal Service plan to save $20 billion over the next three years. More than 600 buildings have been "earmarked for disposal" nationwide, at a savings of $2.1 billion, according to the Postal Service's 2012 report to Congress.
"Selling larger facilities is a means of getting cash flow and reducing our expenses," explained James Wigdel, a Postal Service spokesman in San Francisco.
In charge of selling the facilities for the Postal Service is CB Richard Ellis Group, one of the world's largest real estate companies, chaired by San Francisco financier Dick Blum. CBRE, which has worked with the post office since 1997, was awarded the exclusive contract to market Postal Service facilities in 2011. Blum is married to Sen. Dianne Feinstein, D-Calif., a relationship some critics of the post office have duly noted.
"Historically, USPS has worked with multiple real estate service providers. The new contract enables USPS to consolidate these activities with one service provider," CBRE said in a statement at the time.
On its website, CBRE shows 57 post offices nationwide listed for sale or in the process of being sold. They include Sausalito's main post office, priced at $5.2 million, two in Fresno for a combined $2.9 million, and one in Los Angeles for $8.3 million. The main post office in Modesto, which is listed on the National Register of Historic Places, sold for $1.02 million in 2011 to a developer who plans to convert it to lofts, The Chronicle reported in August.
Other Bay Area post offices on CBRE's website, and confirmed by Wigdel, are in Burlingame, Half Moon Bay, San Rafael and Palo Alto. Berkeley's main post office, which dates to 1915, is "being considered for sale but still in due diligence or the public process," he said.
Berkeley, as is its wont, is putting up a fight. The City Council, Mayor Tom Bates, Rep. Barbara Lee, D-Oakland, and a number of community groups oppose the plan to sell the Allston Way building.
In December, protesters opposing the sale rallied outside the offices of Blum Capital in San Francisco's Financial District, and a delegation later met with staffers at the San Francisco office of Feinstein.
As for accusations of a conflict of interest and suspicions that Feinstein may have influenced the awarding of the contract to her husband's firm, Feinstein's office strongly denies the charges.
"Sen. Feinstein is not involved with and does not discuss any of her husband's business decisions with him. Her husband's holdings are his separate personal property. Sen. Feinstein's assets are held in a blind trust.
That arrangement has been in place since before she came to the Senate in 1992," said Brian Weiss, Feinstein's communications director. In 2012, Feinstein voted for an amendment to a postal reform bill that would have temporarily halted post office closings. The amendment was defeated in the House.
Both the Postal Service and CBRE insisted the 2011 contract was competitively bid. The Postal Service is an independent agency that reports to Congress, but there is no indication Congress plays any role in the awarding of contracts.
While CBRE handles the transactions, it does not advise the Postal Service which facilities to put on the market, I was told by both sides.
"This can be a long but transparent process. We have to find suitable buyers and make sure we have good retail space to relocate our facilities into," said Wigdel. "Some of the buildings may come off the list."
At the public hearing hosted by the Postal Service in Berkeley on Feb. 26, there no doubt will be many in attendance hoping to have their beloved Italianate post office taken off the list.
Mitchell Reports
Feinstein on phone calls: There is nothing new with this program
The White House won’t confirm specific reports that the NSA obtained phone records of millions of Verizon customers. Sen. Dianne Feinstein, D-Calif., explains why senior administration officials are defending the practice that includes domestic calls and could have a much larger reach. Feinstein also says the leak should be investigated and that the U.S. “has become a culture of leaks.