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news alert!


By Gayle M.B. Hanson

Feinstein’s Husband Involved in Lawsuit for Fraud

News alert! has learned that the Perini Corp., a Massachusetts company controlled by an investment group headed up by California Democratic Sen. Dianne Feinstein’s husband, banker Richard Blum, has become the focus of a lawsuit filed by the Los Angeles County Metropolitan Transportation Authority, or MTA, alleging massive fraud in the construction of the Los Angeles subway system. This one has big-time political implications.
       The lawsuit, which names as defendants Tutor-Saliba Corp., California’s largest contractor, and the Perini Corp., owned by an investment group headed up by Blum, alleges that Tutor-Saliba-Perini used dummy minority business enterprises to land contracts on the subway portion of the 57-mile Los Angeles Metro Rail line. The lawsuit also alleges that the white-owned firms set up dummy companies that were “either not qualified or in whom they owned a disclosing interest.”
       The lawsuit alleges that Tutor-Saliba-Perini worked with subcontractors to present false claims for work on the Los Angeles subway to obtain millions of dollars for additional payments.
       The companies also are at the heart of an ongoing federal investigation involving similar allegations in the awarding of contracts for the $2 billion San Francisco International Airport expansion.
       The legal wrangling comes at a time when Feinstein, who often is named as a possible vice-presidential candidate for the Democratic Party, is contemplating her upcoming reelection campaign for the Senate.
       “There is absolutely no connection between Tutor-Saliba and Richard Blum,” says Ron Tutor, the outspoken owner of Tutor-Saliba and the managing general partner for the joint efforts by the two companies. “I know him personally. He’s a nice man. And he would never, ever, put his wife’s career in any kind of jeopardy. This is merely an attempt by the MTA to get out of paying Tutor-Saliba the money we are owed.”
       According to statements by Murray Indick, general counsel for the San Francisco firm, Blum Capital Partners, Blum knows nothing about the Los Angeles lawsuit. Indick has said that at the time Blum’s group took control of Perini, which has been in continued operation in Massachusetts since 1894, it was a requirement of the deal that Perini no longer be involved in any public projects in California and, additionally, Perini sold its interest in the airport work to Tutor-Saliba approximately 22 months ago.
       Blum, who did not return news alert’s request for an interview, continually has attempted to erect a fire wall between his business dealings and his wife’s political career. However, this is not the first time his business dealings have come under public scrutiny, particularly those involving the People’s Republic of China, where he has maintained long-standing business investments.
       Robert Reagan, an attorney representing the MTA in its complaint against Tutor-Saliba-Perini, declined to comment on the specifics of the case but said that he was not surprised to hear Tutor vigorously defend himself.“I would not expect Mr. Tutor to say anything else,” said Reagan. “But the lawsuit speaks for itself.”
       Tutor also blames the lawsuit on the ongoing investigation being conducted in San Francisco for heating up things for his company in Los Angeles, where Tutor-Saliba has been involved in litigation against the MTA for the last six years and is scheduled to go to trial in six months.
       “I cannot comment on the nature of that investigation because of the law-enforcement agencies involved,” said Reagan. “Our lawsuit was filed in February of this year.”
       The FBI began looking into financial irregularities in the awarding of contracts at the San Francisco International Airport in 1998 following a request to investigate a civil-rights complaint filed by the local chapter of the National Association for the Advancement of Colored People.
       At the center of that probe is one Charlie Walker, a longtime friend of San Francisco Mayor Willie Brown, who received $1 million in trucking contracts for the San Francisco airport. Walker, a legend in the city’s predominantly black Hunter’s Point neighborhood, was convicted in 1984 for irregularities regarding the awarding of minority contracts and served three years in prison as a result. He did not return Insight’s calls.
       While the complaint filed by the MTA does not specifically name any minority subcontractors, the only company which appears to have connections to both cases are firms linked to Walker.
       Accu-crete, an Orange County-based firm, which filed with San Francisco’s Human Rights Commission for minority status to get work at the San Francisco Airport, gave as its local address the same address as that for Charlie Walker Trucking. Accu-crete no longer is in business and, according to Tutor, went bankrupt.
       The Los Angeles lawsuit was filed as a cross-complaint against the lawsuit filed by Tutor-Saliba in 1995 alleging that they are owed $11 million in payment for work they did on the Los Angeles subway.

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Horacio Grana was a retired member of the Carpenters Local Union 1506 in Los Angeles.
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