"I don't think this issue is going away for Sen. Feinstein," Judicial Watch President Tom Fitton told Fred Lucas of Cybercast News Service... Little "Sunlight" on the Dianne Feinstein Conflict-of-Interest Controversy

When last week we wrote of Dianne Feinstein's potential conflict-of-interest regarding her previous positions on the U.S. Senate's Military Construction Appropriations Subcommittee (MILCON), the issue was bubbling up from its humble beginnings as a long article published last January by Peter Byrne, a free-lance investigative reporter.

This week, the story became even more intriguing.

"I don't think this issue is going away for Sen. Feinstein," Judicial Watch President Tom Fitton told Fred Lucas of Cybercast News Service, one of the few journalists seeking clarity as to whether Feinstein's subcommittee actions benefited her husband's business interests, which included substantial military construction contracts awarded to two separate companies.

Fred Lucas also talked to experts in community property law who confirmed that Feinstein's husband's business interests are essentially her own.  "Every penny that belongs to one party belongs to the other party.  She gets 50 percent of all the contracts.  It flows into her own pocket.  She might say it's her husband's company.  But it's community property assets," one told Lucas.

Even more intriguing is the spirited defense of Senator Feinstein that has emerged from "The Sunlight Foundation," including blog exchanges with Peter Byrne.

According to its website, "The Sunlight Foundation was started in January 2006 with the goal of using the revolutionary power of the Internet and new information technology to enable citizens to learn more about what Congress and their elected representatives are doing, and thus help reduce corruption, ensure greater transparency and accountability by government, and foster public trust in the vital institutions of democracy."

The Chairman of the Board of Directors and a co-founder of The Sunlight Foundation is Michael R. Klein, who is also the organization's principal benefactor, having put up $3.5 million to start the organization, again according to its website.

Astute followers of the Feinstein controversy will recall Michael R. Klein as a business partner of Feinstein's husband, a legal advisor to Feinstein and Vice-Chairman of one of the companies that benefited substantially from military contracts during Feinstein's tenure on MILCON.

Perhaps this is when Seinfeld would say, "Not that there's anything wrong with that."

The Feinstein controversy is decidedly complex, taking place in years past, involving gigantic sums of military construction project appropriations money, the typically Byzantine procedures of the Senate, its approval over Pentagon projects, the Pentagon's awarding of contracts and how those contracts actually work.  Needless to say, there are not a lot of people who understand any of that generally and probably only a handful who know the specifics of Feinstein's interaction with the process.

We are among neither knowledgeable group, but the overall circumstances are not that complex.

Feinstein was either ranking member or Chairman of MILCON for a period of years, approving military construction projects.  Feinstein's husband, Richard C. Blum, had significant interests in two companies - Perini Corporation and URS Corporation - which received roughly $1.6 billion in military construction contracts during Feinstein's tenure on the subcommittee.  Michael R. Klein provided Feinstein's office with lists of specific projects in which Perini was contractually involved or interested in becoming involved.  The Senate Ethics Committee, at some point in time, said some or all of that was just peachy keen, but the details of that ruling are secret.

While Feinstein's Senate office has issued several lengthy rebuttals to Peter Byrne's article, they (and the defense presented by the Sunlight Foundation) are primarily concentrated on picking apart complicated specifics of the article.

The one more or less comprehensive statement issued by Feinstein's office reads as follows:  "Senator Feinstein had no conflict of interest.

"Senator Feinstein has sought to avoid potential conflicts in two ways:  First, by seeking the advice of the Senate Ethics Committee - on her own initiative - about whether any conflicts existed, and by following that guidance.

"The Ethics Committee indicated that, given the facts, Senator Feinstein could fully consider, debate, and vote on appropriations bills, whether in the subcommittee, the committee or the full Senate.

"Second, Senator Feinstein always respected the difference between the congressional appropriations process and the separate Department of Defense contract award process.

"Senator Feinstein never sought to influence which entities were awarded military construction contracts.  Neither she nor her personal staff nor her committee staff ever wrote, spoke to, or influenced in any way Defense Department officials about which entities were awarded any military construction contract."

Further to that, Michael R. Klein has written, responding to several of Peter Byrne's articles, "The record is clear that the senator never, not once, proposed, voted for or otherwise supported any measure that would specifically benefit Perini."

It is absolutely true that project approval (the province of MILCON) is distinctly different from awarding contracts (the province of the Pentagon).  But projects lead to contracts and some of the projects approved by MILCON during the period of Senator Feinstein's substantial influence on MILCON led to Perini contracts, the interests of which were known to Senator Feinstein via the information specifically provided by Mr. Klein.

 If actual conflict did not exist, the appearance of conflict now most certainly does, and what was asked of and answered by the Senate Ethics Committee in secret is probative of nothing.

Only an independent investigation with the ability and authority to compel evidence can resolve a myriad of questions that will linger no matter how many statements are issued.  The Senate Ethics Committee, which has immediate jurisdiction, clearly has it own conflicts, as does Senator Feinstein as current Chairman of the Senate Rules Committee.

Judicial Watch has indicated that it is preparing an ethics complaint against Senator Feinstein.  Where will it go and how will it be handled?  The answers may tell us as much about Senate ethics as anything else.

May 11, 2007
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