The husband of Sen. Dianne Feinstein, D-Calif., stands to reap a windfall from an exclusive contract to sell off billions of dollars of U.S. Post Office properties.
But that windfall will be far short of the “$950 million” that flaming Internet rumors have speculated.
For months now, an exaggerated report has been circulating about the Internet that Feinstein’s husband, Richard Blum, won the federal contract to sell the U.S. Postal Service properties and will personally reap nearly a billion dollars in commissions. The implication is that Feinstein used her position in Congress to help Blum land the government contract, thus joining her husband in his newfound, spectacular wealth.
The reality, however, is significantly different.
It is true that in 2011, the Postal Service entered into an exclusive contract with CBRE Group, Inc., to sell off billions of dollars of USPS properties.
But CBRE, the world’s largest commercial real estate firm, is not owned by Blum, nor will he see direct income from the sale commissions. Blum is merely the board chairman of the company, which actually employed over 22,000 people last year. And according to a March 2013 corporate report, Blum made a total of only $157,000 last year for serving in that capacity. The commissions on the post office sales will not directly line Blum’s pockets.
It is true, however, that Blum is also a heavy investor in the company, his investment firm owning over 15 million shares in CBRE, yet this amounts to only 4.6 percent of the corporation.
A major deal like landing the USPS contract will certainly profit CBRE, and thus its shareholders, including Blum. But of the many millions of dollars CBRE may receive in commissions on the sales of the old post offices, the profits will be divided among the various expenses, employees and shareholders. Blum’s personal boost in dividends will come nowhere near the rumored levels.
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,” Brian Weiss, Feinstein’s communications director, told San Francisco Chronicle. “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.”
Furthermore, other than being a member of Congress, Feinstein holds no unique position of authority over the Postal Service. She is not a member, for example, of the Senate Committee on Homeland Security and Governmental Affairs, which has jurisdiction over the Postal Service.
In fact, last year Feinstein even cosponsored a Senate bill amendment that would have placed moratoriums on the closing or consolidation of certain post offices. The bill passed the Senate but not the House.
The selling of over 600 post offices and USPS buildings is part of a plan to save $20 billion over the next three years, according to the Postal Service’s 2012 report to Congress.
Sue Brennan, a Postal Service spokeswoman, told Nevada’s Reno Gazette-Journal that seven firms bid on the contract, but CBRE – which the USPS has been working with since 1997 – won the exclusive contract because it “was the contractor with the best overall organization, capability and experience.”