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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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