Traverse City Record-Eagle
---- — Q: Does Sen. Dianne Feinstein’s husband, Richard Blum, own a company that has an exclusive contract to sell United States Postal Service property?
A: Blum has an interest in the CBRE Group, which won a competitive contract to sell postal properties. He is chairman of CBRE’s board and owns an investment firm that holds less than 5 percent of its stock.
Is this true?
The US has entered into a contract with a real estate firm to sell 56 buildings that currently house U.S. Post Offices. The government has decided it no longer needs these buildings, many of which are located on prime land in towns and cities across the country.
The sale of these properties will fetch billions of dollars and a handsome 6 percent commission to the company handling the sales. That company belongs to a man named Richard Blum. Who is Richard Blum you ask?
It is true that Richard Blum has a financial relationship with the real estate firm contracted to sell United States Postal Service properties. However, this viral e-mail gets some details — including the name of the real estate company — wrong.
In July 2011, the Postal Service entered into an exclusive contract with the real estate firm CB Richard Ellis Group Inc. (CBRE) to sell surplus Postal Service properties. Blum, Sen. Dianne Feinstein’s husband, is the chairman of the company’s board of directors. As a member of the board of directors, he received $157,000 in cash and stock awards from CBRE Group in 2012.
His investment firm, Blum Capital Partners, L.P., is also the real estate firm’s fifth-largest institutional shareholder. As of May 2013, it held more than 15 million shares worth an estimated $3 billion. However, this amounts to about 4.5 percent of CBRE Group’s total shares. CBRE Group is the largest commercial real estate firm in the world. Its Postal Service contract is responsible for a fraction of that revenue, and just a fraction of that fraction is passed on to shareholders.
The e-mail suggests Feinstein — described as a “powerful U.S. Senator from San Francisco” — misused her office to secure a “sweet deal” for her husband. But there is no evidence of that.
Sue Brennan, a Postal Service spokeswoman, told us in an e-mail that seven firms participated in a competitive bidding process. She said the Postal Service chose CBRE Group because it “was the contractor with the best overall organization, capability and experience.”
Feinstein’s spokesman, Brian Weiss, addressed questions about the contract in a February 2013 article in the San Francisco Chronicle:
San Francisco Chronicle, Feb. 8: “Sen. Feinstein is not involved with and does not discuss any of her husband’s business decisions with him. 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,” said Brian Weiss, Feinstein’s communications director.
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.
To the contrary, Feinstein cosponsored an amendment to the 21st Century Postal Service Act of 2012 that tried to limit post office closings. The purpose of the amendment:
To require the Postal Service to consider the effect of closing or consolidating a postal facility on the ability of the affected community to vote by mail and to provide for a moratorium on the closing or consolidation of post offices and postal facilities to protect the ability to vote by mail.
Although the amendment was approved in the Senate, the bill was “held at the desk” when it was sent to the House. It never made it to the House floor.
Also, the Postal Service has policies designed to minimize the influence of politics. It is overseen by a board of governors (much like a for-profit company’s board of directors) and the postmaster general. Governors “are appointed by the President with the advice and consent of the Senate” and serve seven-year terms (see page 52 of a report on the agency’s history). Only five of the nine governors at any time can be members of the same political party.
It is true that the Postal Service does not pay property taxes on the buildings it owns. However, paying the bills on space your business no longer needs is simply bad practice. In addition to saving on heating and electricity, the Postal Service stands to save money on maintenance and landscaping costs associated with these properties. Brennan could not provide us with an estimated cost savings.
By Madeleine Stevens, with Eugene Kiely for FactCheck.org.