Sen. Dianne Feinstein may have violated Senate ethics rules by introducing legislation in January that indirectly benefited her husband.
The legislation authorized that $25 billion of taxpayer money be given to the Federal Deposit Insurance Corp. to help finance an FDIC proposal to avoid home foreclosures by promoting loan workouts and increasing federal loan guarantees, The Washington Times reports.
The Democratic California senator’s husband, Richard Blum, is chairman of the board of commercial real estate colossus CB Richard Ellis (CBRE). When Feinstein introduced her bill, the FDIC had just signed a contract with the firm to unload foreclosed properties for prices higher than industry averages, the Times points out.
The FDIC generally receives all its money from insurance fees from banks rather than congressional authorizations. And the Times notes that Feinstein’s intervention was odd in that she isn’t even a member of the Senate Committee on Banking, Housing and Urban Affairs, which oversees the FDIC for Congress.
Senate ethics rules say members must avoid not only conflicts of interest, but "even the appearance of a conflict of interest."
The Times obtained documents revealing that on Oct. 30, Feinstein first offered the FDIC assistance in its quest for money to stanch home foreclosures. She sent her letter two weeks before the agency chose CBRE for the contract to dump foreclosed properties the FDIC took over from failed banks.
Spokesmen for the FDIC, Feinstein and CBRE told the Times there was no connection between the legislation and the contract and that the couple didn't know about CBRE's business with FDIC until after it was awarded.
But ethics experts were critical. "This clearly gives the appearance of a conflict of interest," Kent Cooper, a former federal regulator who specializes in government ethics and disclosures, told the Times.
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