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Billions in military contracts to husband's firms were approved by Sen. Feinstein's committee, Metro Newspapers investigation reveals

January 24, 2007 — Sen. Dianne Feinstein's husband was a major beneficiary of military appropriations blessed by a subcommittee that she headed, Metro Newspapers reports this week.

Feinstein (D-Calif.) acted in apparent conflict of interest while approving billions of dollars in military construction expenditures, according to an investigative story by award-winning journalist Peter Byrne. The story was published jointly in the North Bay Bohemian and Metro Silicon Valley weekly newspapers this week.

Following Feinstein's participation at the legislative level, large contracts were awarded to two firms — URS Corporation and Perini Corporation — that were controlled by an investment group headed by the senator's spouse, financier Richard C. Blum.

Byrne's investigation reveals the following details about Feinstein's service as a member of the United States Senate's Military Construction Appropriations subcommittee (MILCON):

  • From 1997 through the end of 2005, with Feinstein's knowledge, her husband's group held a majority interest in two defense contractors active in Iraq and U.S. military bases.

  • While setting MILCON agendas, Feinstein supervised her own staff of military construction experts and lobbied Pentagon officials in public hearings.

  • From 2001 to 2005, URS earned $792 million from military construction and environmental cleanup projects approved by MILCON; Perini secured $759 million from MILCON projects.

  • Attorney Michael R. Klein, a Feinstein legal adviser and long-time Blum business partner, also served as vice-chairman of Perini's board of directors. In an interview with Byrne in September, Klein stated that, beginning in 1997, he routinely informed Feinstein about specific federal projects coming before her in which Perini had a stake. The insider information, Klein said, was intended to help the senator avoid conflicts of interest. Although Klein's admission was intended to defuse the issue of Feinstein's conflict of interest, it instead exacerbated it, and Sen. Feinstein did in fact vote on legislation that affected Perini and URS.

The story published in Metro Silicon Valley and the North Bay Bohemian examines the many ways in which Sen. Feinstein committed repeated breaches of ethics as MILCON's chairperson from 2001-2005.

Metro Newspapers is a group of three free circulation weekly newspapers based in Northern California.

Research assistance was provided by the Investigative Fund of the Nation Institute.

The story appears online at or

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