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Which group is slimier...bankers or politicians?

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April 22, 2009 – Comments (20)

With all due respect to the good bankers out there in CAPS land (nuf2bdangerous comes to mind), I've had it up to here with the criminal ways of our nations banks and bankers. HOWEVER, I'm beginning to think our nations leaders are just as bad, if not worse, than the bankers. Here's another article showing how disgusting this is becoming (link and excerpts):

Senator's husband's firm cashes in on crisis

On the day the new Congress convened this year, Sen. Dianne Feinstein introduced legislation to route $25 billion in taxpayer money to a government agency that had just awarded her husband's real estate firm a lucrative contract to sell foreclosed properties at compensation rates higher than the industry norms.

Mrs. Feinstein's intervention on behalf of the Federal Deposit Insurance Corp. was unusual: the California Democrat isn't a member of the Senate Committee on Banking, Housing and Urban Affairs with jurisdiction over FDIC; and the agency is supposed to operate from money it raises from bank-paid insurance payments - not direct federal dollars.

Documents reviewed by The Washington Times show Mrs. Feinstein first offered Oct. 30 to help the FDIC secure money for its effort to stem the rise of home foreclosures. Her letter was sent just days before the agency determined that CB Richard Ellis Group (CBRE) - the commercial real estate firm that her husband Richard Blum heads as board chairman - had won the competitive bidding for a contract to sell foreclosed properties that FDIC had inherited from failed banks.

About the same time of the contract award, Mr. Blum's private investment firm reported to the Securities and Exchange Commission that it and related affiliates had purchased more than 10 million new shares in CBRE. The shares were purchased for the going price of $3.77; CBRE's stock closed Monday at $5.14...

 Senate ethics rules state that members must avoid conflicts of interest as well as "even the appearance of a conflict of interest." Some ethics analysts question whether Mrs. Feinstein ran afoul of the latter provision, creating the appearance that she was rewarding the agency that had just hired her husband's firm...

Mrs. Feinstein and Mr. Blum, a wealthy investment banker, are a power couple in both Washington and California who sat behind President Obama during his inauguration in January. Mrs. Feinstein also is mentioned as a candidate for California governor.

The FDIC contract "highlights the problem of a senator with a spouse who has extensive business interests that intersect frequently with the federal government," said Melanie Sloan, executive director of the watchdog group Citizens for Responsibility and Ethics in Washington (CREW)...

Real estate specialists also question the government's generosity in the CBRE contract.

The firm, known for its commercial real estate services, is to be paid monthly maintenance fees for each foreclosed property it handles, as well as commissions and incentives. The total compensation can range from 8 percent of the sales price on many residential properties to 30 percent for properties worth $25,000 or less...

Most real estate agents earn no more than 6 percent on residential, even on foreclosed properties, and CBRE doesn't have as much experience in foreclosure sales as other firms, the experts said.

"From everything I know about it, it is a very sweet deal and went to somebody who is less than qualified in dealing with foreclosed residential properties. Their expertise is in commercial real estate," said Cynthia Kenner, a Colorado real estate agent who specializes in selling bank-owned residential properties and last year helped sell more than 600 foreclosed properties.

"There are companies that are more experienced in selling such properties than CB Richard Ellis," she added...

As for Mrs. Feinstein, Mr. Duran said she did not learn of the contract until The Times asked her office about it in late January, even though the contract was publicly announced by the company and had been mentioned in an article in the Los Angeles Times in late November. Her spokesman said her office was not aware of the article.

Ethics analysts question whether Mrs. Feinstein had an obligation to track her husband's business dealings with the government to avoid any appearance of a conflict of interest.

"I find it amazing that they did not know that CB Richard Ellis had gotten the FDIC contract," said Mr. Cooper, the ethics expert and former regulator. "Why wasn't she or a staff person regularly watching for possible conflicts?"

Other experts said they do not think that the Senate Ethics Committee will take any action because Mrs. Feinstein's legislation did not directly financially benefit her husband and was aimed at solving a problem affecting a broad section of America.

Robert L. Walker, a former chief Senate Ethics Committee counsel, said the Senate conflict rule is so narrow that it "almost requires a senator's sponsorship of a private bill resulting in some personal or family benefit before a violation of the rule would be found."

Mr. Walker added that the Senate usually relies on the senator to police against improper appearances, but the policy "assumes that a senator and his or her staff will know about and remain alert to investments and other financial ties, including family financial ties, that could be the basis of such appearance concerns."

Mr. Duran said Mrs. Feinstein and Mr. Blum make "an intensive effort" to maintain a wall between their financial interests.

"Her staff carefully reviews all votes," he said. "Senator Feinstein complies with all required congressional disclosure requirements. She follows the guidance of the ethics committee and its requirements."

Mrs. Feinstein, who declined to answer detailed question about the steps she takes to avoid conflicts, is one of the wealthiest members of Congress, mainly from Mr. Blum's holdings. Together, they are worth at least $52.3 million, according to her 2007 personal financial disclosure forms filed with the Senate and analyzed by the nonpartisan Center for Responsive Politics, which monitors money and politics.

"When a spouse has so many business interests, it will always raise questions about how contracts are acquired or decisions made," said Ms. Sloan, CREW's executive director.

You'll have to excuse me, I need to go take a shower now!

20 Comments – Post Your Own

#1) On April 22, 2009 at 11:11 PM, alstry (36.24) wrote:

slime is slime and we are all getting slimed by the slime.

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#2) On April 22, 2009 at 11:12 PM, alstry (36.24) wrote:

slime is slime and we are all getting slimed by the slime.

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#3) On April 22, 2009 at 11:37 PM, devoish (97.09) wrote:

http://feinstein.senate.gov/public/index.cfm?FuseAction=NewsRoom.PressReleases&ContentRecord_id=D01C4AF5-5056-8059-7665-E215286D2265 

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#4) On April 22, 2009 at 11:46 PM, catoismymotor (< 20) wrote:

Politicians.

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#5) On April 23, 2009 at 12:00 AM, devoish (97.09) wrote:

Allegedly, this is an internal CBRE company e-mail concerning this issue: 

 

Date: April 22, 2009
To: All U.S. Employees
From: [name redacted by HA]
Subject: FDIC Contract
CC: [names redacted by HA]

A very irresponsible and sensational article about our FDIC contract was published yesterday in a second-tier Washington newspaper with a well-known political agenda. Given today’s viral news environment, the article has subsequently been picked up on certain political Internet sites and has also appeared in more legitimate news outlets. I wanted to discuss the article with you.

The article is an attack piece and attempts to contrive a connection between our FDIC contract and the fact that our Chairman, Dick Blum, is married to Dianne Feinstein, the senior Senator from California. The article makes the inference that Senator Feinstein influenced our involvement in the FDIC program. However, the article never actually draws any connection whatsoever between the Senator and the FDIC contract or Dick Blum, for that matter.

As Chairman of the Board, Dick helps to set the company’s strategic direction, but he does not get involved in day-to-day operational decisions, including client service or contract bidding. Dick had no advance knowledge whatsoever that we were pursuing the FDIC opportunity, and only discovered we were awarded this contract when Brett issued his internal employee announcement on November 26. Equally, Sen. Feinstein had no knowledge of our work for the FDIC, as an article in the San Francisco Chronicle explains. Frankly, given all the challenges Sen. Feinstein is dealing with, she has other more important priorities to focus on than CBRE’s day-to-day operations.

Ironically, the article highlights legislation she introduced (which was subsequently superseded by the President’s stimulus plan) that was designed to help stem property foreclosures. Since CBRE is paid under the FDIC agreement only by handling foreclosed properties, it is unclear just how CBRE would supposedly have benefited from the Senator’s proposed legislation.

The reporter, relying on quotes from some local real estate agents, questions our qualification to handle foreclosure sales and the commission rates and fees under the agreement. The fact is that CBRE was selected for this assignment – along with one other firm – as the result of a highly competitive, multi-faceted bidding process that involved more than 30 firms. We had a team of people working continuously on this opportunity for more than nine months, responding to a written request for proposals, preparing oral presentations and developing pricing schedules based on the FDIC models. Our broad service offering, national office network and specialty services focused on both serving the public sector and restructuring and repositioning failed assets made us ideally suited to assist the FDIC with managing and disposing of its Owned Real Estate portfolio.

Contrary to what’s alleged in the article, we have extensive in-house expertise in working with property foreclosures. Ken Pearson, who heads our FDIC team, is a highly experienced bankruptcy attorney who has represented the Resolution Trust Corporation and other clients in loan restructurings, foreclosures and receiverships. Our subcontractor, Realogy, the nation’s largest residential real estate brokerage company, adds complementary residential expertise.

The article also questions our pricing under the FDIC contract. You should know that the rates we are charging were developed in accordance with the pricing matrix the FDIC provided to all service providers bidding for the work. We accepted the matrix as part of our bid submission. We believe our pricing is at market for a highly complex assignment with significant and frequent reporting requirements, and is consistent with rates the other FDIC service provider is charging.

The revenue opportunity under the FDIC contract is unknown, but under any scenario, the amount of money we will earn will be immaterial (well less than one percent of revenue) for a $5 billion company, and the FDIC will receive significant value for our work.

During the months leading up to the publishing of the article, we provided the reporter all the pertinent facts about the FDIC contract. It is unfortunate that he and his editors would elect to discount these facts and move forward with an article that, objectively, had very little basis for being published.

We are proud to serve our government during this extremely stressful time in our nation’s history, and to play a small role in helping to correct the imbalances that had developed in the marketplace.

Consistent with corporate policy, should anyone from the news media contact you about the FDIC contract, please refer them to Steve Iaco or Bob McGrath in Corporate Communications.

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#6) On April 23, 2009 at 12:05 AM, JGus (28.84) wrote:

devoish

Did you post the link and memo because you are buying the Senator's and company's stories? Or, are you just presenting the 'other side' of the story? Just curious.

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#7) On April 23, 2009 at 12:08 AM, devoish (97.09) wrote:

Do the bankers win the slimy contest with motivation to attack the Senator's character? (If its all bankers the politicians win. If its investment bankers the politicians lose.)

http://www.newsweek.com/id/193360/page/1  

Not long ago, a group of skeptical Democratic senators met at the White House with President Obama, his chief economic adviser, Larry Summers, and Treasury Secretary Tim Geithner. The six senators—most of them centrists, joined by one left-leaning independent, Vermont's Bernie Sanders—said that while they supported Obama, they were worried. The financial reform policies the president was pursuing were not going far enough, they told him, and the people Obama was choosing as his regulators were not going to change things fundamentally enough. His appointed officials and nominees were products of the very system that brought us all this economic grief; they would tinker with the system but in the end leave Wall Street, and its practices, mostly intact, the senators suggested politely. In addition to Sanders, the senators at the meeting were Maria Cantwell, Byron Dorgan, Dianne Feinstein, Carl Levin and Jim Webb.

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#8) On April 23, 2009 at 12:09 AM, devoish (97.09) wrote:

Trying to present the other side because I had found this story in comment #7 earlier today.

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#9) On April 23, 2009 at 12:34 AM, devoish (97.09) wrote:

from your story this is the supplied link to the letter Senator Feinstein wrote to Sheila Bair http://video1.washingtontimes.com/video/correspondence.pdf 

It encourages Miss Bair to prevent foreclosures, which is in conflict with the interests of CBRE who profits from processing foreclosures.

I have not found text of the legislation about the 25 bil yet but I think the 25 billion in question was to shore up the FDIC to cover bank deposits for a possible rash of bank foreclosures rather than get it from increasing the percentage charged to banks to fund the deposit guarantees. Increasing the fee charged to banks would further hurt their balance sheets http://www.ibat.org/files/PDFs/FDIC%20Letter%20to%20Chairman%20Bair.pdf so FDIC alternative funding was requested from both sides of the aisle.

Can we have a new contest with the reporter from the newspaper included?

BTW, your blog has picked up a lot of recs from me.

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#10) On April 23, 2009 at 12:51 AM, nottheSEC (81.27) wrote:

I preface my statements to those who politcial leaninga are different then mine. All best  I remind you of the words of Voltaire. 

Think for yourselves and let others enjoy the privilege to do so too.Voltaire, Essay on Tolerance

  

I not bashing Obama here. I would like to give him a little breather in the office . Much like I afforded Bush. That being said lobbyist run this nation and they are the only ones who can use politcians.So my affinity for liberal leanings is primarily societal at this juncture by default. I  am just hoping the really poor get an education,  sandwhich and a job. I was medium poor now im just poor and got the education and the job. "The sandwhich" presents aquistional problems at times. 

Politicians are worse than call girls. At least a call girl doesn't use you after your dead. Wait isn't that lawyers? Ok most polticians were lawyers. ALL IMHO...J

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#11) On April 23, 2009 at 12:52 AM, nottheSEC (81.27) wrote:

darn still no spellchecker

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#12) On April 23, 2009 at 1:09 AM, ralphmachio (26.83) wrote:

The whole octopus is slimy. Right wing, left wing, judicial, executive, media, military industrial, industrial, corporate financial, pharmaceutical, franken food, it's all slimy, and thinly veneered in a Political correctness that is sickeningly hypocritical. This single entity has built a house of cards which will fall, and may knock the planet out of orbit when it does.

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#13) On April 23, 2009 at 6:51 AM, Chromantix (97.89) wrote:

+1

1) Never vote for a politician who has never done actual, real work.  Not community service, not volunteering, but real, honest labor which requires taxes to be paid.

 

2) Never vote for an incumbent politician.  Only a continual replacement policy can keep these people from creating empires and massive spheres of influence.

 

3) Never vote for a party of a politician which did not clean up the mess of "problem" politicians (e.g. the ones who are criminals and don't get pushed out by their party).

 

 

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#14) On April 23, 2009 at 7:45 AM, devoish (97.09) wrote:

Never vote for a politician who has never done actual, real work.  Not community service, not volunteering, but real, honest labor which requires taxes to be paid.

Never (if there are any good absolutes) vote for any person who has NOT done honest, community service, volunteer work.

Because the guy I don't want taxing me, is the guy who has ALWAYS been for himself.

Our parents knew this when religious leaders had to take a vow of poverty before they were trusted.

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#15) On April 23, 2009 at 9:35 AM, outoffocus (23.25) wrote:

Which group is slimier...bankers or politicians?

Is this a trick question?

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#16) On April 23, 2009 at 10:35 AM, bigpeach (27.61) wrote:

I won't defend politicians or bankers, but as devoish has pointed out, this article has very little substance. I clearly states that the company won the contract in a competitive bidding process. A lot of people want to leap to conclusions these days every time they read a flimsy internet article from a questionable source. I still believe in due process. Let's focus attention on real outrages.

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#17) On April 23, 2009 at 12:44 PM, edwjm (99.87) wrote:

Since both groups are off the scale when it comes to slimeyness, your question is moot.

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#18) On April 23, 2009 at 2:45 PM, beatnik11 (< 20) wrote:

We have the best democracy that money can buy!  Too bad the only ones who can really afford to buy it are the lobbiests for various interests so the corrupt politicians will jump when they are told too.  There is no question in my mind that most politicians and financial leaders are corrupt and that is for the very simple obvious reason, power corrupts.  In response to the article however, I honestly dont see much merrit in it.  I do in fact think Feinstein is corrupt, but not because of this story, it just seems like more of the typical partisan distractions that we are bombarded with.  Many Americans seem to get blinded by the rhetoric coming from both parties rather than seeing the true reality that they actually have far more in common with the other.  Dems Reps, just two wings of the same bird

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#19) On April 23, 2009 at 2:48 PM, TMFAleph1 (95.13) wrote:

In this arena, politicians are the open-weight champions.

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#20) On April 23, 2009 at 3:10 PM, nottheSEC (81.27) wrote:

, beatnik11  Agreed / a greed. I was actually a believer for a while. Then 90 % of the people wanted no bailout( left and right) and the polticos do an end around in the senate. The will of the people is a joke. I am liberal because the left wing gets me a sandwhich now and again. Not that the right ring ain't right from time to time. My nickle and good stuff..J

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