Di-Fi Steers Billions to Agency, Hubby Gets Contract

[Brainster]

This stinks to high heaven:

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.

The important thing here is that Blum's firm, CB Richard Ellis, is one of the largest property sales companies in the United States. But they are commercial property specialists, not residential brokers, and the commissions are raising some eyebrows:

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. A smaller firm also won a slice of the work with similar terms, records show.

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.

And:

CBRE is to be paid under a three-tiered system with sliding rates, according to a rate proposal provided to The Times under a Freedom of Information Act (FOIA) request. For starters, CBRE gets to charge a setup fee of $450 for each residential property and $600 for each commercial property it takes over from the FDIC.

"That is highly unusual," said Ms. Kenner, the Colorado-based foreclosure expert. She said she does not collect a separate setup fee and was expected to do such work as part of her commission.

Blum is Chairman of the Board of CB Richard Ellis and his investment group owns the largest block of stock in the company. Blum's group also purchased an additional 10 million shares in the company in November, a little bit before the contract was announced.

Let me specify here too that if the contract was solely about commercial properties I would not be at all surprised; CB Richard Ellis is very much qualified in that particular field. But they are not a major player in the residential real estate market, and as a result I very much smell the proverbial rat.

 

[Dr Adequate]

I'm not quite following this. Apart from her husband, cui bonio? Government agencies don't make profits, do they? The bureaucrats involved won't get higher salaries just 'cos the government agency that they work for is handling more money ... will they?

If she was getting the money routed to a private company giving contracts to her husband, then I could see what you were getting at. As it is, you may have to spell it out a bit more.

Perhaps I'm just being hopelessly naive, but I don't quite see it yet.

 

[Prometheus]

Well, it does seem odd. FDIC normally doesn't get any money directly from the government, but after she helped change that, they're paying her husband's company above-market rates to do work that it's not qualified to do.

 

[Dr Adequate]

Sure. I'd just like someone to join a few more of the dots for me.

 

[Prometheus]

What are you, some kind of skeptic or something?

 

[Brainster]

I'm not quite following this. Apart from her husband, cui bonio? Government agencies don't make profits, do they? The bureaucrats involved won't get higher salaries just 'cos the government agency that they work for is handling more money ... will they?

If she was getting the money routed to a private company giving contracts to her husband, then I could see what you were getting at. As it is, you may have to spell it out a bit more.

Perhaps I'm just being hopelessly naive, but I don't quite see it yet.

Think about it this way. Di Fi got $25 billion for this agency. Now I'm going to take a wild-ass guess and say that the agency really wanted that money. Not because they could use it to pay bonuses, but because they could use it to do what they felt needed to be done. Is that of some value to the people running the agency?

Remember in government (and quasi-governmental agencies like the FDIC), it's not about how much money you make, it's about how much power you have. Twenty-five billion dollars is a lot of power.

But the real stinker is on the other side. CB Richard Ellis gets a sweetheart deal that should raise eyebrows even without the Feinstein-Blum connection, to do work that is outside their usual line of business.

 

[Nova Land]

Whatever happened with this? I don't recall hearing anything about this, so am guessing the charge went nowhere. But did it go nowhere because there was nowhere to go, or because it was never adequately looked into?

 

[BenBurch]

Whatever happened with this? I don't recall hearing anything about this, so am guessing the charge went nowhere. But did it go nowhere because there was nowhere to go, or because it was never adequately looked into?

I know a reporter who tried like hell to make something of this story, and she could not.

 

[Vorticity]

Whatever happened with this? I don't recall hearing anything about this, so am guessing the charge went nowhere. But did it go nowhere because there was nowhere to go, or because it was never adequately looked into?

Everyone who knew anything has been killed.

I'd keep mum if I were you.

 

[Nova Land]

I know a reporter who tried like hell to make something of this story, and she could not.

Thanks you. (When I saw that the only source given in the thread was the Washington Times, and when a quick Google didn't turn up any more reliable sources, I wondered if that might be the case. I'm grateful to have my curiosity on that somewhat assuaged.)

If/when you have time, I'd be interested in any more details you can share about your reporter friend's experience with this.

 

[jj]

This is an example of the "big lie".

It is a time-honored way of dishonestly poisoning someone else's welfare, and creating permanant uncertainty about them.

It has been used by the Republicans ever since they learned it from "In your guts, you know he's nuts", and has been used extensively on moderate republicans (see Gerald Ford, Millicent Fenwick, Arlen Spector for some examples) as well as other people perceived as opponents of the present right-wing Republican party.

It is telling that they even use it on their own, when their own will not advocate open defiance of the constitution in favor of religion and intrusion into personal lives.