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The Byrne Report

Hawk Tale


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ON JAN. 18, California senator Dianne Feinstein introduced Dr. Condoleezza Rice at a Senate nomination hearing for Secretary of State in terms so saccharine that molasses seemed to ooze out of her mouth. She was a precocious child, Feinstein purred. She has skill, judgment and poise. She loves football. Bush loves her. "The problems we face abroad are complex and sizable. If Dr. Rice's past performance is any indication, though, we can rest easy."

That very same day, Feinstein's husband, Richard Blum, took advantage of a spike in the price of his URS Corporation stock. He sold a third of his holdings in the defense contractor for $57 million, according to filings with the U.S. Securities and Exchange Commission. With Rice confirmed, the business of death and occupation looks rosy as hell for Feinstein, who--let's get real--benefits tremendously from sharing community property with Blum.

URS' largest customer is the U.S. Army, which accounted for 17 percent ($587 million) of its cash revenue in 2004. In 2001, URS enjoyed a mere $169 million in defense contracts. Now, its war contracts total more than $2 billion. According to its annual report, the San Francisco–based URS anticipates that profits will rocket up in 2005, because "operations in the Middle East are expected to generate increased work related to the development of weapons systems, the training of military pilots and the maintenance, upgrade and repair of military vehicles." Provided, of course, that our hawkish leadership remains as poised and lovable as the new Secretary of State.

Feinstein, who sits on the Defense Appropriations Subcommittee, is an advocate of first-strike warfare, even though it flouts international law and the standards of common decency. Interestingly, her Financial Disclosure Report for 2003 was more than three times the size of her 2002 disclosure (Feinstein's 2003 disclosure numbers 133 pages, compared to Sen. Barbara Boxer's six-page report). The Feinstein-Blum portfolio is crammed with multimillion dollar investments in the military-industrial-financial complex and corporations that heavily exploit Third World peoples. The senator has a lot to lose should the neoconservative war machine falter.

Hubby holds a controlling interest in another engineering firm, Perini Corporation of Framingham, Mass. Perini ranks No. 6 by dollar amount in war-related government contracts in the Middle East. According to its annual report, "Perini proudly supports the U.S. government with global rapid response capabilities for defense, reconstruction and security." Perini builds military facilities and roads in Afghanistan, electrical infrastructure in Iraq and U.S. embassies around the world.

After the Senate, Feinstein included, approved Bush's war plans in 2002, Perini's defense contract awards soared from negligible to $2.52 billion. But, as with many of the sole-source, open-ended contracts awarded to politically connected firms, there are problems with accountability. Last summer, Department of Defense auditors determined that Perini could not adequately justify its costs in Iraq as fair and reasonable. That's government-speak for: They're gouging the #!$% out of us.

Perini is heavily engaged in military and municipal public works projects inside the United States; at least two are also under investigation for contract fraud. For example, the city of San Francisco has sued general contractor Perini--which was in a joint venture with the Tutor-Saliba construction firm--for $100 million in cost overruns at a San Francisco International Airport project. The lawsuit alleges that the joint venture engaged in "a sophisticated pattern of fraud," including inflating costs, fabricating delays and setting up minority front companies to exploit affirmative-action preferences. The attorney general of Massachusetts is looking into alleged false claims made by a Perini joint venture in the "Big Dig" urban highway construction boondoggle in Boston.

Ron Tutor, owner of Tutor-Saliba and CEO of Perini, bought into the latter company, along with Blum, as it teetered on the edge of solvency in the mid- 1990s due to a bad real estate investment. It rebounded, thanks to the firm's sudden ability to obtain lucrative U.S. military and government contracts, which, of course, had nothing to do with the fact that Blum's powerful wife has her hands on the military's purse strings. Remarkably, Perini grossed $1.37 billion in 2003, up 27 percent from the previous year, before the U.S. invasion and occupation of Iraq.

Perini attributes its rocketing profits to "increased volume of work in Iraq and Afghanistan." As a risk factor, the firm notes that continued demand for its military services depends upon "the political situation in Iraq," which, logically, means that it desires the bloody war and useless occupation to continue indefinitely--a wish that hawktails with the foreign policy positions of Bush, Rice, Rumsfeld and Feinstein.

I almost forgot: Perini Corp. is the nation's most active builder of Indian-fronted casinos. That explains a few things about Sen. Feinstein and the politics of gambling, soon to be revealed in greater detail in this space.

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From the February 2-8, 2005 issue of the North Bay Bohemian.

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