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Politricks

CROOKS IN OFFICE

THE CULTURE OF CORRUPTION

By Matt Cuddy

 

In the United States of America, law was once our religion, and there was no higher calling than to be a public servant, and serve the people of this great country with honesty, reverence for the law, and a humble respect for those who elected you into office.

But that seems to have been thrown right out the window with the current bunch of outright criminals we have in office now, feathering their own nests with ill gotten gains from questionable deals. Deals, that twenty years ago would have landed them in prison, or even gotten them executed for crimes against the people of the United States.

Now, however, it seems to be the norm, not the exception to have a crook in office, in every level of public service. What you are about to read next is a small snippet of how one of the biggest crooks to ever hold public office operates, Diane Feinstein. After reading the following about how Diane and her Husband profited from insider information and questionable ethics, it will make your blood boil, as it did mine. You might want to get in a nice strong chair that you can’t fall out of, because what you’re about to read next might just blow you out of it. An air sickness bag might help too.

Mainstream Media Ignore Feinstein's Conflict

Dianne Feinstein (D-Calif.) is involved in a scandal that so far the media has completely ignored. David Keene reports:

Anyone who knows much about real power in congress knows that almost every member of the House and Senate lusts after a seat on the Appropriations Committee and hopes one day to achieve the status of Cardinal. The Cardinals, of course, are the folks who chair the various Appropriations Committee subcommittees and literally control the billions of dollars that pass through their hands.

California Sen. Dianne Feinstein (D) chairs the Senate Rules Committee, but she’s also a Cardinal. She is currently chairwoman of the Interior, Environment and Related Agencies subcommittee, but until last year was for six years the top Democrat on the Military Construction, Veterans Affairs, and Related Agencies (or “Milcon”) sub-committee, where she may have directed more than $1 billion to companies controlled by her husband.

If the inferences finally coming out about what she did while on Milcon prove true, she may be on the way to morphing from a respected senior Democrat into another poster child for congressional corruption.

The problems stem from her subcommittee activities from 2001 to late 2005, when she quit. During that period the public record suggests she knowingly took part in decisions that eventually put millions of dollars into her husband’s pocket — the classic conflict of interest that exploited her position and power to channel money to her husband’s companies.

In other words, it appears Sen. Feinstein was up to her ears in the same sort of shenanigans that landed California Rep. Randy “Duke” Cunningham (R) in the slammer. Indeed, it may be that the primary difference between the two is basically that Cunningham was a minor leaguer and a lot dumber than his state’s senior senator. [...]

In spite of the blatant appearance of corruption, no major publication has picked up on the story, the Senate Ethics Committee has reportedly let her slip by, and she is now chairing the Senate Rules Committee, which puts her in charge of making sure her colleagues act ethically and avoid the sorts of conflicts of interest with which she is personally and so obviously familiar.

Senator's husband cashes in on crisis

Feinstein sought $25 billion for agency that awarded contract to spouse

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. Full Exclusive story: The Washington Times

Dianne Feinstein resigns committee post amid scandal; accused of war profiteering

SEN. Dianne Feinstein has resigned from the Military Construction Appropriations subcommittee. As previously and extensively reviewed in these pages, Feinstein was chairperson and ranking member of MILCON for six years, during which time she had a conflict of interest due to her husband Richard C. Blum's ownership of two major defense contractors, who were awarded billions of dollars for military construction projects approved by Feinstein.

As MILCON leader, Feinstein relished the details of military construction, even micromanaging one project at the level of its sewer design. She regularly took junkets to military bases around the world to inspect construction projects, some of which were contracted to her husband's companies, Perini Corp. and URS Corp.

Perhaps she resigned from MILCON because she could not take the heat generated by Metro's expose of her ethics (which was partially funded by the Investigative Fund of the Nation Institute). Or was her work on the subcommittee finished because Blum divested ownership of his military construction and advanced weapons manufacturing firms in late 2005?

The MILCON subcommittee is not only in charge of supervising military construction, it also oversees "quality of life" issues for veterans, which includes building housing for military families and operating hospitals and clinics for wounded soldiers. Perhaps Feinstein is trying to disassociate herself from MILCON's incredible failure to provide decent medical care for wounded soldiers.

Two years ago, before the Washington Post became belatedly involved, the online magazine Salon.com exposed the horrors of deficient medical care for Iraq war veterans. While leading MILCON, Feinstein had ample warning of the medical-care meltdown. But she was not proactive on veteran's affairs.

Feinstein abandoned MILCON as her ethical problems were surfacing in the media, and as it was becoming clear that her subcommittee left grievously wounded veterans to rot while her family was profiting from the occupations of Iraq and Afghanistan.

I don't have much to add. For background, check out Joshua Frank giving it to the Senator with both barrels, here.

I'll just say this. Even if you think this criticism of Feinstein is unfair -- as I know some do -- you have to acknowledge that this kind of stuff sends the message that all of Washington is the same. It allows Republicans to hold onto the delusion that their brand of corruption over the past decade was run-of-the-mill -- just Standard Operating Procedure for the party in power -- and it just demoralizes progressives.

DIANE’S HUSBAND, BIG TIME OPERATOR            

Richard C. Blum (c. 1936[1]) is an investment banker and the husband of United States Senator from California Dianne Feinstein. He is the Chairman and President of Blum Capital, an equity investment management firm that acts as general partner for various investment partnerships and provides investment advisory services. Blum also serves in various boards of directors of several companies, including CB Richard Ellis. He is also a Regent of the University of California where until May 2009, he served as the chairman of that board.

Blum founded Blum Capital in 1975 and pioneered the firm’s hybrid Strategic Block/Private Equity investment strategy. Mr. Blum currently serves as Chairman of the board of directors of CB Richard Ellis and is a director on the boards of directors of three other portfolio companies: Fairmont Raffles Holdings International Ltd., Current Media, L.L.C. and Myer Pty Ltd. in Australia.

Mr. Blum co-founded Newbridge Capital in the early 1990s and is Co-Chairman of TPG Asia V, L.P. (the successor fund to the Newbridge franchise that has been incorporated into Texas Pacific Group). In the past, Mr. Blum has served on the boards of many prominent companies, including Northwest Airlines Corporation, Glenborough Realty Trust, Inc., Korea First Bank, URS Corporation and National Education Corporation. In addition, Mr. Blum is active in numerous non-profit organizations.He is the founder and Chairman of the American Himalayan Foundation and is Honorary Consul to Mongolia and Nepal. Mr. Blum also serves as a member of the Advisory Board of the Haas School of Business at the University of California at Berkeley.

Prior to founding Blum Capital, Blum was with Sutro & Co. for seventeen years, holding various positions including director, major stockholder and member of the executive committee.

On April 25, 2009 Blum was honored with the Berkeley Medal by UC Berkeley Chancellor Robert Birgenau in front of His Holiness the 14th Dalai Lama. The talk was sponsored by his American Himalayan Foundation.

 crooks1.jpg

       The happy couple (couple of crooks)

 

Blum’s name is a familiar one to those acquainted with the details of the corporate plundering of Cali­fornia northcoast forests and communities through­out the 80s and 90s. The year was 1995, and Texas corporate raider Charles Hurwitz — whose company, Maxxam, had laid waste to as much ancient forestland as possible, as quickly as possible, for nearly a decade — was looking to cash out of his ownership of the Headwaters forest in central Humboldt County. Headwaters was the flashpoint of the largest direct action protests in the history of the earth defense movement, as well as lawsuits and legislative initia­tives aimed at preserving what little was left of old-growth redwood ecosystems in the Pacific Northwest. It so happened Hurwitz was an investment partner of Blum from way back. Blum also happened to be a major donor, fundraiser, and political booster of US President Bill Clinton.

Clinton and California Governor Gray Davis duti­fully discharged their duty as proxies of the super-wealthy in general — and, in this case, Blum in par­ticular — by appointing the inviolable “DiFi” to chair a legislative team to negotiate the purchase of Head­waters from Hurwitz. Feinstein and Hurwitz agreed on a final deal in 1996, hailed by Feinstein’s website as one of her 10% career accomplishments. Hurwitz gave up very little of real economic value — Maxaam had clear-cut most of the forest in question — in exchange for a $380 million taxpayer-funded payout, or more than four times the market value of the trees at the time. Much of the money went directly into Hurwitz’s personal bank accounts. That despite the fact that all the government really needed to do to protect the acreage in question was enforce the Endangered Species Act. Regardless of the fact that Headwaters became officially “protected,” the vast majority of California’s remaining old growth and other mature stands of redwood were pillaged by the end of the decade. Hurwitz’s empire cashed out, like other timber conglomerates, by liquidating the forests and the livelihoods of the North Coast.

Alexander Cockburn and Jeffrey St. Clair later revealed that Blum and another Hurwitz pal, the Houston-based Continental Airlines chairman David Bonderman, had personally met with Clinton at the White House in a “coffee klatch” fundraiser on December 15, 1995, likely to discuss the details of the Headwaters buy-out, which occurred six months later. Bonderman and Blum are both directors of the Wilderness Society, the only national environmental organization that praised the buy-out.

For all the fanfare that emerged in the Clinton era about how corporate globalization had rendered the nation-state a bit player in the larger drama of the new, “free trade”-dominated corporate economic order, the nation-state’s role in propping up the global capitalist system has never been more central. That role is being laid bare as never before with each multi-billion dollar subsidy the federal government passes onto the financial industry — an estimated $5 trillion in total taxpayer money since the bail-out program commenced in fall 2008 (an exact figure is hard to determine). What is known in academic-speak as “neo-liberalism” represents little more than the sophisticated apex of a governing system refined and perfected over the course of several decades (nay, cen­turies), which is principally designed to socialize the risks of rapacious capitalism while privatizing public goods to create unprecedented levels of profit for the super-wealthy.

Blum is not only a representative of this system, but one of its most skillful promoters and practitio­ners. Throughout his career, and particularly in recent years, he has siphoned off taxpayer money into the coffers of his various personal holdings with a calcu­lated brazenness that would make the most swagger­ing Costra Nostra blush. The Headwaters Forest scam was indicative of exactly how these people have done business for nigh on three decades. To pull only a handful of examples from the very recent past:

In early-2007, investigative reporter Peter Byrne published a groundbreaking series in the North Bay Bohemian, the “Feinstein Files.” Byrne revealed that as chairperson of the Senate’s Military Construction Appropriations subcommittee from 2001 through 2005, Feinstein supervised the appropriation of more than $1.5 billion for two defense contractors, URS Corporation and Perini Corporation, in which Blum owned a controlling interest.

In the series’ smoking gun, long-time Blum business partner Michael R. Klein told Byrne he regularly took the highly unusual step of supplying Feinstein’s office with lists of Per­ini’s current and upcoming contractual interests in federal legislation, ostensibly so the senator would abstain from voting on these matters for ethical rea­sons (which she never did). “Earmarks, you know, set asides, you name it, there was a system in place which on a regular basis I got notified, I notified her office, and her office notified her,” said Klein, Perini’s vice chairman at the time. Blum later sold his holdings in URS to the tune of $57 million in personal profit.

In January 2009, Feinstein introduced legislation to route $25 billion in federal funding to a Federal Deposit Insurance Corporation (FDIC) program designed to forestall home foreclosures by expediting loan workouts and expanding federal loan guarantees. On the surface, Feinstein’s legislation was a straight­forward intervention on behalf of troubled homeown­ers nationwide. But less than two months prior, the FDIC had also awarded Blum’s real estate company, CB Richard Ellis, a multimillion dollar contract to sell homes the agency had inherited from failed banks. This move was also highly unusual, since Feinstein is not a member of the Senate committee that oversees the FDIC.

This past November, the University of California Board of Regents imposed an “emergency” 32% fee increase on undergraduate students, effective in the 2009-10 academic year. The increase stems not only from severe state-mandated budget cuts, but also a series of decisions by the university’s board of regents — of which Richard Blum is the resident alpha mem­ber (although no longer chair of the board), having been appointed to that post by Gray Davis — that have effectively pledged student fee increases to the capital bond market, thereby creating a financial incentive for the Regents to continually raise fees, in a pyramid scheme that raises money for campus con­struction projects.

It should come as no surprise that URS Corporation, the same company that made $1.5 billion on contracts awarded by Feinstein’s Senate military construction committee, has been the main contractor for the largest university capital projects in recent years: UCLA’s $150 million reconstruction of Santa Monica Hospital, UC Berkeley’s $48 million nanotechnology laboratory, and Berkeley’s $200 mil­lion Southeast Campus Integrated Project, which includes a seismic retrofit of Memorial Stadium and an expansion of the Haas School of Business — home of the Blum Center for Developing Economies. More on this in next week’s AVA.

Blum-Feinstein, Inc. has accomplished these immense transfers of public wealth absent of almost any serious media scrutiny. But in recent years, the media deep freeze has slowly begun to thaw, begin­ning with a pair of front-page stories in the San Fran­cisco Chronicle in May 2005. Chronicle science writer Keay Davidson’s fine reporting was spurred on by a public outing at a UC Regents meeting when students revealed Blum’s conflict of interest as a member of the committee overseeing the two nuclear weapons labs the UC runs on behalf of the US government. Blum’s URS Corporation had a $125 million, five-year con­struction and engineering services contract with the UC’s Los Alamos, NM nuclear weapons development compound at the time. Less than two years later, Peter Byrne’s series regarding Blum’s war profiteering appeared in the North Bay Bohemian.

This past semester, UC Berkeley Professor of Geog­raphy Gray Brechin co-taught a course on inves­tigative journalism. Brechin is best known as the author of the definitive historical work on Northern California’s ruling elite, Imperial San Francisco. He has been an observer of Blum-DiFi, Inc. for years.

“I’m very impressed by the reluctance of most jour­nalists to follow a story that has been screaming to be done for years while they have been covering their ears and eyes,” Brechin told us. “You guys and Peter [Byrne] are about the only ones who understand that behind the billowing smoke appears to be a roaring bonfire.”

Blum-Feinstein’s concentration of power is great­est in their home state, of course, and it stands to rea­son in any case that Blum’s CB Richard Ellis would be making a killing off the ongoing fire sale of State of California assets. In October, CBRE secured a con­tract from the California Department of General Services to broker over $2 billion in office buildings the state intends to privatize.

Blum’s fortunes aren’t entirely a function of Fein­stein’s legislative exploits. Nor are Feintsein’s political powers entirely a result of her Daddy Warbucks. And the State of California’s economic plight stems not only from the avarice of a small handful of individuals, but from an economic system that is inherently self-destructive and crisis-prone.

Blum and Feinstein, however, have worked hand-in-glove with other members of the state’s banking, real estate, agribusiness, and military-industrial inter­ests to buffer regressive tax and spending policies, helping to devise the very austerity measures currently being hoisted upon the people of California across all public sectors, not just within the University of Cali­fornia.

Therein lies much of the reason Blum is now so quick to tout his anti-poverty bona fides. Blum, you see, has a public relations problem. It’s built into the way he does business. It’s built into the political economy he straddles as one of the US empire’s most connected and wealthy power elites.

Gray Brechin notes that Blum seems to have hired a public relations firm to bolster his personal brand. “Blum has gotten an extraordinary amount of fawning publicity in a very short time, including a front page feature in the Haas Business School magazine about what a whiz he is. I believe that this coincided with the black tie event at the Palace Hotel where Haas celebrated him as Global Citizen of the Year and I joined others from Cal to protest his actions as Alpha Regent.”

“Then there were the two treacly profiles of him in the San Francisco Chronicle recently. I can’t believe this is all coincidental.”

It isn’t. Nor is it coincidental that, as Peter Byrne revealed, longtime Blum business partner Michael Klein has founded a nonprofit foundation that makes grants to media organizations that watchdog the fed­eral government. The organization started after Wikipedia instituted a policy blocking congressional staffers from editing Wiki entries pertaining to their bosses. Employees from Dianne Feinstein’s office had just been caught editing entries in the online encyclo­pedia that cast Blum and Feinstein in an unfavorable light. Thus does one of Blum’s closest business associ­ates now control a significant portion of the budgets of several ostensibly independent organizations that monitor political corruption.

Blum is also now strongly affiliated with a multi-campus academic program at the UC, centered on an institute at UC Berkeley that Blum founded with $15 million in seed money, designed to put band-aids on the symptoms of global poverty he and his wife have had an instrumental role in creating. Beyond this exercise in mystifying the causes of poverty in distant lands, the state’s economic elite — with Blum and Feinstein helping to lead the charge — have long endeavored to turn their philosophy of neoliberal privatization, fiscal austerity, and personal enrichment on the State of California itself. Richard C. Blum Center for Developing Economies, indeed.

Blum is a self-professed Buddhist and friend of the XIVth Dalai Lama. Many of his anti-poverty efforts are geared toward slum dwellers in Tibet and Nepal. “Would an actual Buddhist provide the bulk of the funding for a multi-million dollar institute, only to attach his own name to it?” Brechin mused.

The populist anger seething below the surface of the American body politic has not yet boiled over into any sort of coherent rebellion against the elites who have wrought the greatest economic catastrophe since the 1930s. There is little indication that it will any time soon. Blum’s own financial empire, however, is now quietly under assault by the hundreds of Univer­sity of California students who have learned to loathe the man who has done more than any other to struc­turally adjust their university and price many of the state’s youth out of higher education. These cognizant students, supported by campus workers paid poverty wages by university leaders like Blum, are now organ­izing building take-overs and some of the largest stu­dent protests on those campuses of the past four dec­ades.

In the next part of this exclusive series for the AVA, we will focus on Blum’s role in gutting the Uni­versity of California, where the tuition increases paid in the last four years by Mendocino County residents alone would be large enough to close roughly half the $7 million county budget gap.

       Gold Mine in the Desert Sands

Beginning in 1994, and culminating in 2000, a supposedly altruistic legislative process turned desert sand into gold. This magical miracle was credited mainly to California’s U. S. Senator Dianne Feinstein; and the corporation that owned the sand was Catellus Development, in which Feinstein’s husband, Richard C. Blum, held a serious interest.

Catellus was then the second-largest private landholder in the western United States, with 817,000 acres in California alone. The company developed commercial real estate, shopping centers, and housing. It also acquired a number of properties on some defunct military bases during the Clinton administration’s base closure program. Catellus had also been active in a number of land swaps, exchanging profitless rural properties with the Federal Bureau of Land Management for prime development sites within urban areas, or directly adjacent to planned freeways.

Catellus was one of the most politically-wired development companies in the state, with significant ties to Feinstein, former San Francisco Mayor Willie Brown (first a Catellus attorney, then a limited partner in the firm), former California State Senate President Pro Tem John Burton (another ex-Catellus attorney), and John Foran, who lobbied for Catellus in favor of the Mission Bay legislation carried by Burton in 1997.

In a 1997 article published in Forbes Magazine, writer Mary Beth Grover put it this way: “With real estate, politics matters a lot, almost as much as location. In California real estate, politics is the most important thing [and] aside from sheer corruption there are a number of ways to appease these little gods. Catellus knows the game well.”

Catellus Corporation and its officers, including former CEO Nelson Rising, were significant contributors to the political war chests of both Willie Brown and Dianne Feinstein. The campaign contributions proved to be a sound investment for Catellus, especially in regard to Senator Feinstein’s sponsorship of the Desert Wildlands Protection Act of 1994. The act was funded with additional legislation sponsored by Senator Feinstein, with $30 million in federal funds provided for the project in the 2000, 2001 and 2002 federal budgets. The Senator is very proud of this project, and lists it as one of her prime accomplishments on her official Congressional website.

This bill involved the transfer of over 400,000 acres in the Mojave Desert from Catellus to the Bureau of Land Management. The area became a nature preserve for endangered species, especially the desert tortoise.

On her Senate website under the heading “Accomplishments”, Senator Feinstein outlined this act as follows: “The California Desert Protection Act protected more than 7 million acres of pristine California desert. It was the largest such designation in the history of the continental United States – and established the Death Valley and Joshua Tree National Parks and the East Mojave Natural Preserve.

“The California Desert is home to remarkable archaeology, beauty and wildlife – some of the last remaining dinosaur tracks, Native American petroglyphs, abundant spring wildflowers, and threatened species including the bighorn sheep and the desert tortoise, an animal known to live for as many as 100 years. The California Desert Protection Act ensured that these lands would be preserved for years to come.”

Then Senator Feinstein listed the specifics of her legislation.

“Specifically, the Act:

• Designated nearly 3.5 million acres of desert administered by the Bureau of Land Management (BLM) as wilderness.

• Added 1.2 million acres of land to Death Valley National Monument and re-designated the monument a national park.

• Added 234,000 acres of land to Joshua Tree National Monument and re-designated the area a national park.

• Established a new 1.6 million acre Mojave National Preserve.

• Transferred 20,500 acres of BLM land to the state of California to expand the Red Rock Canyon State Park.

“Since 2000 the wilderness area has been expanded even further with the purchase of nearly 600,000 acres of land primarily in and around the Mojave National Preserve. The transaction, the largest conservation acquisition of private lands in U.S. history, combined federal Land and Water Conservation Fund appropriations with funding from the Wildlands Conservancy to buy discounted land owned by the Catellus Development Corporation.”

In a press release put out by Senator Feinstein’s office, Catellus’ CEO Nelson Rising gave a major shout-out to Feinstein for the deal: “The successful completion of these transactions would not have been possible without the significant efforts of Senator Dianne Feinstein.” Rising then went on to credit David Myers and the Wildlands Conservancy for raising “…the private funds necessary to complete these sales.”

Not everyone is as thrilled with Feinstein’s land-swap acumen as Nelson Rising.

Jeff Baird works as a computer programmer for the County of San Bernardino. He’s married with two daughters and lives in the high-desert community of Apple Valley, where the land exchanges occurred.

Baird told me what he thought about Catellus. “I believe that a number of these non-profit groups like The Wildlands Conservancy are masquerading under the cloak of “environmentalism. I believe that these environmental groups are being used as vehicles to initiate a series of land purchases and swaps that will ultimately benefit Catellus Corporation and their friends—all at the expense of John Q. Public.”

“These were all public lands; at least those that weren’t privately owned, “ Baird told me. “The private lands were these small ranching operations. The public lands were where people used to go out shooting or ride horses or drive their ATV’s. Then, suddenly, the public lands became private holdings, and they’re going to create this massive new park. Then they start throwing the ranchers off their lands. The whole thing stunk as far as I was concerned. And this was for an “endangered” species, the desert tortoise? Come on, there’s thousands of desert tortoises all over the place out there. They’re not that endangered.

“All of these environmentally related issues appear to be a smokescreen to give this public land away to big private developers,” said Baird. He too believes that, in a sweetheart deal, Catellus gave up essentially worthless desert tracts for lucrative freeway properties. Baird thinks there is also a connection between Catellus Development and The Wildlands Conservancy, which constitutes a direct conflict of interest. The Wildlands Conservancy did not come into being until September 1995, after Senator Feinstein introduced the first desert protection bill, which initially named Catellus specifically.

Later, Clinton’s Secretary of the Interior Bruce Babbit persuaded her to delete the direct reference. How often is an environmental group created to join a bandwagon driven by a U.S. senator? Talk about the cart pulling the horse!

Baird also said he feared “…that the resulting values of ostensibly appreciated land when they were exchanged were inconsistent with the underlying land values of these properties as determined by the county assessor.” Baird looked at scores of parcels related to the desert exchanges, and saw that the assessed values of the desert land increased sharply after being transferred to the Wildlands Conservancy; as high as 300% in some cases. This yielded huge potential tax benefits to private donors who gave their properties to the Wildlands group as part of the exchanges.

This inflated value estimate also allowed the swap for more valuable land alongside freeways to proceed, because the transfers could then be classified as “fair market value,” specified as part of the BLM’s codes involving land exchanges. “These guys can take a huge tax write-off, because they would be giving up land that was artificially inflated by what I believe was a corrupt process.”

Baird also believes that some of the deals involved public lands that had been illegally transferred to private ownership by the BLM. Baird showed me a series of parcels with map overlays that seemed to establish his contention that the parcels were in fact public lands until just recently.

In a May 1997 issue of Media ByPass magazine, Karen Lee Bixman explored an area of the land swap that made some of Baird’s concerns seem timid by comparison. In a story titled “The Great Gold Heist: The Desert Wilderness Protection Act,” Bixman characterized Senator Dianne Feinstein as “The Modern Jesse James.” Exchanging worthless desert land for more viable commercial land alongside interchanges, as Jeff Baird’s file documented, is bad public policy, but Catellus was also swapping worthless land for rich, gold-bearing deposits.

Bixman wrote: “The real motivation for the passage of [the Feinstein] bill lies with the special interest groups that would benefit monetarily. Through a complex series of land exchanges, Catellus will receive land that contains some of the richest gold deposits in the world.”

Part of the Catellus exchanges in the Mojave included a swap for a decommissioned military base called Chocolate Mountain. Bixman wrote that geologists told her Chocolate Mountain has deposits worth somewhere between $40-100 billion. Catellus owns the nearby Mesquite mine in the Chocolate Rift zone, which, Bixman wrote, “is one of the ten most profitable mines in the United States and has some of the most profitable gold deposits of any mine in the world.”

In the company’s annual report for the year 2000, Catellus’ CEO Nelson Rising in his letter “To Our Shareholders” wrote: “In 2000 we closed on two sales totaling more than 405,000 acres of desert lands. We also entered into an option agreement with The Wildlands Conservancy to sell an additional 277,000 acres of desert land… These transactions have generated more than $320 million in sales proceeds.”

The year-end report for Catellus in 2000 credited Senator Dianne Feinstein for the Desert Wildlands bill and said: Catellus’ fortunes were “directly affected by cash derived from the sales of these surplus lands.” That annual report also listed the fact that CALPERS, the California Public Employees Retirement System, was the largest institutional investor in Catellus Development, then owning some 28% of the 100,000,000 shares of stock. The same report mentioned that Catellus was issuing 150,000,000 new shares of stock, which at the end of the year 2000, when Catellus was trading for $28 a share, were worth a total of approximately $4.4 billion.

Rising also wrote: “As a result of all of these factors, we are very positive about our prospects for 2001 and believe we will meet or exceed our 2001 EBDDT per share growth goal of 15%.”

In the official document on the California Desert Protection Act, the overview of the project states in the first paragraph: “The United States Senate Committee on Energy and Natural Resources approved, on October 5, 1993, the California Desert Protection Act (S21) sponsored by Senator Dianne Feinstein after the bill was blocked in committee for seven years.” The document then states that the Feinstein bill “protects all active mines and valid mineral claims which will protect jobs (bold letters in original) in the region.”

With the profits derived from the new stock issuances and the overnight increase in land valuations, Feinstein’s legislative Rumpelstiltskin act helped Catellus turn a huge profit in 2000. The closest I can determine, Catellus made from $11 to $15 billion during the Desert Wildlands process. And Richard C. Blum had a very good year.

Who knew environmental protection could prove so profitable?

Editors note:

So, if you were able to read through all that without gagging, or throwing a brick through the television set, you can see that we as a nation are in big trouble. There is a culture of dishonesty that seems to have permeated our political processes, that makes us look like a third word country, like Paraguay, a Kleptocracy.

I would like to think that with the elections right around the corner, all these crooks will be thrown out of office, right on their big fat asses, but I fear it won’t happen.  This culture of criminal dealings in our halls of government has gone on for so long it is “business as usual” for most of our senators and congressmen. I can’t imagine a worse situation for my teenage daughter to grow up under. What legacy is left for the United States to leave the next generation? Unless we take back what has been stolen from us, the expectation of an honest and forthright government, we are doomed to the history books as just another failed democracy, once the greatest nation on Earth, brought to its knees by dishonest, self seeking criminals posing as public servants.

God help the United States.