Every day in the fog-caressed city of San Francisco, a half dozen souls are overwhelmed by the Big Sleep. But on Feb. 28, 2022 only one of the previous day’s dearly departed was granted a headline in the San Francisco Chronicle.
While middle class dead were remembered rosily in paid obituaries, wealthy investment banker Richard Charles Blum, 86, got a freebie hagiography. Education beat reporter Nanette Asimov breathlessly lauded the deceased financier as a “self made millionaire,” a “philanthropist,” a reform-minded University of California Regent, and, oh, yes, the husband of U.S. Senator Dianne Feinstein.
According to Asimov, and similarly flattering obits in rich and powerful-fawning media, Blum was a brilliant businessman with no flaws as a human being; he was, in fact, a morally pure saint who brightened a world shared by rich and poor alike.
Please allow us to set the record straight.
Beginning in 2000, this reporter published numerous stories in SF Weekly, Bohemian, and other California newspapers exposing the many ethically corrupted money deals engineered by Blum as he manufactured for himself a lucrative career by leveraging his wife’s political power to profit from billions of dollars in government contracts awarded to companies controlled by himself.
My investigative stories on Blum have been lauded through the years with journalism awards from organizations such as Project Censored, Society of Professional Journalists, Investigative Reporters & Editors, California Newspaper Publishers Association. The scandalous findings detailing Blum-Feinstein conflicts of interest have been echoed in other media news columns for decades. Some of the reports have inspired government investigations of Blum’s operations, and feeble efforts by Feinstein to disassociate herself from her partner’s scores of interlocking businesses by claiming that she only has ownership of a small “blind trust.”
In fact, Feinstein has always owned exactly one half of Blum’s assets under California community property laws, period. And she has many times intervened in Congressional oversight of projects that have benefited her family. But such is the reverence in which corporate-enslaved politicians and the press that depends upon their favor holds the politically neoliberal, closet-neoconservative Feinstein, that Blum was allowed to continue his grifts in broad daylight until his San Francisco-based bank, Blum Capital Partners, busted flat a few years ago, taking down with it many millions of dollars in public funds.
Feinstein’s reputation has long been protected by political Teflon and willfully blind reporters in the face of decades of documented havoc caused to the public interest by her family businesses. And, horribly, as she continues to sink into a widely-recognized zombie state of piteous dementia, she remains a powerfully influential Senator wielding life and death responsibilities in an out-moded, obstructionist branch of government run by obvious psychopaths and narcissistic, geriatric basket cases. But I digress.
In addition to his not-so-mysterious way of attracting billions of dollars in government construction and real estate and military supply contracts, Blum’s other business ventures were based on “private equity,” which is a piratical method of investing which coldly destroys businesses, like PetSmart, for one example of a Blum takeover. The private equity way practiced by Blum Capital Partners is to buy cash flow-healthy companies by assuming massive bank debt to finance the aggressive, normally unwanted take-over. The new owner’s acquisition loans are off-loaded onto the books of the just-acquired firm. Typically, the private equity banditos loot the firm by selling off its productive assets to pay back the acquisition debt and to generate surplus cash which they siphon off for themselves. The asset-crippled firm goes bankrupt, the workers are fired, and people like Blum walk away with largely untaxed profits, casually stepping on the company’s corpse as they sniff out the next victim.
Here is a compendium of the Blum-Feinstein family deals which I exposed to public light during more than two decades of factually robust and unchallenged reporting.
“San Francisco International Airpork” (2000) revealed that construction companies partnered with Blum caused the budget for renovating the airport to unnecessarily balloon by a billion dollars which generated excess profits for Blum and his partners.
“Hawk Tale” (2005) The firm of Feinstein, Condoleeza Rice, Blum, & Bush—war made easy and profitable.
“MIG Attack” (2005) How Feinstein interfered in Indian casino siting legislation, while her husband builds Indian casinos.
“Senator Warbucks” (2007) A national journalism award-winning expose of how Feinstein used her chairpersonship of the Senate Military Construction subcommittee (MILCON) to steer billions of Iraq & Afghanistan war dollars to firms controlled by her husband.
“Feinstein Resigns” (2007) Sen. Feinstein suddenly resigns from MILCON in public blow back from the Bohemian’s revelation that Blum sells prosthetic limbs at huge mark-ups to Iraq and Afghanistan war wounded troops.
“Daddy Kleinbucks” (2007) Founder of the nonprofit investigative Sunlight Foundation, lawyer-investor Michael R. Klein has made curious investment choices with his business partner, Richard C. Blum. Klein was Feinstein’s closest legal and ethical advisor.
“Blum’s Plums” (2007) The first story about how Blum finagled University of California endowment funds to profit himself while he was a university Regent in charge of investments.
“The Investor’s Club” (2011) How the University of California Regents Spin Public Money into Private Profit and into the Pocket of Regent Richard C. Blum. An 8-month investigation crowd-funded by Spot.us and published in multiple newspapers revealed how Blum steered University of California funds into private equity investments, often controlled by him, and how the university lost vast sums of money that would have otherwise gone toward education.
“Going Postal” (2013) The husband of US Senator Dianne Feinstein has been selling post offices to his friends, cheap. The investigation resulted in an damning Inspector General investigation of Blum’s firm, and Blum resigning from the company involved. It is also a “best selling” book.
And the final report, “Blum and Doom” (2017) Feinstein’s hubby, and California pension system, take a hit in the downfall of ITT Educational Services as Blum goes broke.
Last June, according to the Securities & Exchange Commission, Blum Capital Partners was officially terminated after losing most of its capital on bad investments promoting for-profit colleges which it controlled. Unfortunately, Blum had lured tens of millions of dollars from California Public Employees Retirement Fund into these bad investments, while he was a highly paid investment manager for the public fund. Remarkably, Blum steered public investments into his failing for-profit educational company, ITT Educational, trying to prop up the value of his own investments. ITT Educational profited mightily by making federally guaranteed student loans for providing certifiably substandard educations. The company was forcibly liquidated by the US government for fraud and Blum’s investment bank went down, at the same time.
Let us now leave insincere plaudits for the dead aside by reversing the standard sanctimonious obituary tropes made by obsequious reporters to the rich and powerful whom they envy and bootlick.
The world is a better place without Mr. Blum.
This story was first published in the North Bay Bohemian.