Tuesday, April 21, 2009

I've Been Away....

I apologize for not posting as regularly as I had been... I have been preoccupied. So, let’s get caught up on what has been going on lately.

Let’s see…

How about talking about something different for a change:

[Democrat]Senator's husband's firm cashes in on crisis

[California Democrat Senator]Feinstein sought $25 billion for agency that awarded contract to spouse
The Washington Times
By Chuck Neubauer
Tuesday, April 21, 2009

On the day the new Congress convened this year, [California Democrat]Sen. Dianne Feinstein introduced legislation to route $25 billion in taxpayer money to a government agency that had just awarded her husband's real estate firm a lucrative contract to sell foreclosed properties at compensation rates higher than the industry norms.

REALLY? I thought we were into a new era of transparency, hope and change... I guess some things never really change. All that changes if whether you have a (R) or a (D) after your name. Of course, if you a (D) after your name the MSM won't mention. That is why I added a little clarification in the article.

Mrs. Feinstein's [California Democrat Senator] intervention on behalf of the Federal Deposit Insurance Corp. was unusual: the California Democrat isn't a member of the Senate Committee on Banking, Housing and Urban Affairs with jurisdiction over FDIC; and the agency is supposed to operate from money it raises from bank-paid insurance payments - not direct federal dollars.

This is delicious....

Spokesmen for the FDIC, Mrs. Feinstein [California Democrat Senator]and Mr. Blum's [California Democrat Senator's husband] firm told The Times that there was no connection between the legislation and the contract signed Nov. 13, and that the couple didn't even know about CBRE's business with FDIC until after it was awarded.

No, of course not! No, it was purely coincident. Lucky! But coincidental. Wait! It gets better:

Real estate specialists also question the government's generosity in the CBRE contract.

The firm, known for its commercial real estate services, is to be paid monthly maintenance fees for each foreclosed property it handles, as well as commissions and incentives. The total compensation can range from 8 percent of the sales price on many residential properties to 30 percent for properties worth $25,000 or less. A smaller firm also won a slice of the work with similar terms, records show.

Most real estate agents earn no more than 6 percent on residential, even on foreclosed properties, and CBRE doesn't have as much experience in foreclosure sales as other firms, the experts said.

Wanted: Someone to manage & sell foreclosed properties for the U.S. government.
Pay $25,000,000,000.
Experiecence required: 0
Special Skills: Spouse of U.S. Senator

But, wait it gets better!

The FDIC said politics was not involved in its decision, noting the contract was awarded after a six-month competition run by career staff who determined that CBRE was "deemed to be technically qualified and their fee structure fair and reasonable." That means the competition did not mandate the contract go to the lowest bidder necessarily, officials said.

I think I remember someone commenting on no-bid contracts.... Yes, yes.... Here it is:

End Abuse of No-Bid Contracts: Barack Obama and Joe Biden will end abuse of no-bid contracts by requiring that nearly all contract orders over $25,000 be competitively awarded.

Or maybe it was here:

Obama promises to limit no-bid contracts
Says $40 billion could be saved every year

But wait, it gets even better...

Mr. Blum [Democrat Senator Dianne Feinstein' husband], whose position as chairman of CBRE is not full time, sets up partnerships through Blum Capital Partners that invests money for its clients and its owners. He reported owning more than $3 million in CBRE stock through various partnerships at the end of 2007, according to [California Democrat Senator] Mrs. Feinstein's personal financial disclosure statement...

..."Our third quarter results reflected the extremely challenging market conditions, which continued to deteriorate globally," Brett White, president and chief executive officer of CBRE, said in early November.

A few days later, CBRE raised $207 million through a stock offering that sold for $3.77 a share. Mr. Blum's investment partnerships bought 10.6 million shares at the market price of $3.77. The stock offering was announced a couple of days before the signing of the FDIC contract.

What's the saying? "Timing is everything."

BUT WAIT (This is the story that keeps on giving)! There's more!

CBRE has the chance to collect the largest percentage of the sales price for properties worth $25,000 or less, under a flat fee agreement far more generous than the private sector.

Under the FDIC contract, CBRE charges a $5,000 sales commission for each property and can collect an additional $2,500 incentive fee if they sell it in under six months. In other words, they can collect as much as $7,500 on the sale of a property worth $25,000 or less - which works out to a sales commission of 30 percent or more.

Ms. Kenner said she charges $2,000 to $2,500 to sell properties worth $25,000 or less. Another firm, Prescient Inc., which won a similar FDIC contract at the same time as CBRE, charges a $1,948 commission and a $485 incentive fee.

"I think it is a little egregious," Mr. Shaw said of the CBRE compensation deal for small properties.

I think I heard something related to this recently. Oh, yeah, now I remember... Here it is:

Rally Held to Fight Lending Practices

Who do you suppose is going to absorb the inflated fees when purchasing homes valued under $25,000?
Maybe those people buying the houses under $25,000? Won't those be "the working poor"?
Will we see picketing outside CBRE offices? Will we see investigations of whether this is "predatory" sales tactics?

The Grand Finale:

Other experts said they do not think that the Senate Ethics Committee will take any action because [California Democrat Senator] Mrs. Feinstein's legislation did not directly financially benefit her husband and was aimed at solving a problem affecting a broad section of America.


Robert L. Walker, a former chief Senate Ethics Committee counsel, said the Senate conflict rule is so narrow that it "almost requires a senator's sponsorship of a private bill resulting in some personal or family benefit before a violation of the rule would be found."

Oh. Well then. That clears it all up....

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