Tuesday, April 21, 2009

Now This Is How You Butter The Bread

The characters:

Sen Diane Feinstein (D-CA)

Richard Blum - Chairman of the Board CBRE (also happens to be husband of the Senator)

The time line:

10/30/08 - Feinstein writes letter and agrees to initiate legislation to direct TARP money to the FDIC so it can hire an outside company to sell foreclosed properties.

11/12/08 - Blum Partners LLP (yes the same Richard Blum) purchase 10 million new shares of CBRE (price per share $3.75).

11/13/08 - FDIC awards contract to sell foreclosed properties to CBRE.

1/6/09 - Feinstein introduces S 73 (legislation to allocate $25 billion of TARP money to the FDIC).

4/21/09 - Feinstein issues press release:

"There was no connection between my promise to get federal money over to the FDIC, the awarding of the contract to my husbands company, the purchase of stock by my husband the day before the contract was awarded, and the legislation I introduced."

Today's Price per share of CBRE $5.73/share.

Profit (so far) to Blum Partners LLP on those 10 million new shares = $19,800,000.

And this answers the eternal question of why anyone would spend $5-10 Million dollars campaigning for a US Senate seat that has a pay rate of $170,000. Now that's a return on investment.

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