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CREW Urges Investigation Into FDIC Contract Awarded to CB Richard Ellis
WASHINGTON - April 27 - Citizens for Responsibility and Ethics in Washington (CREW) urged the Inspector General (IG) of the Federal Deposit Insurance Corporation (FDIC) today to investigate a suspect contract the agency awarded to a company run by the husband of Sen. Dianne Feinstein (D-CA).
The CB Richard Ellis Group (CBRE), chaired by Sen. Feinstein's husband Richard Blum, won the contract with the FDIC last November to sell foreclosed properties inherited from failed banks. The company won the contract in an allegedly competitive bidding process although CBRE is a commercial real estate firm with relatively little experience selling foreclosed properties.
One month earlier, Sen. Feinstein had written a letter in support of the FDIC's desire to expand its loan modification program. After the contract was awarded, she introduced legislation that would use $25 billion in Troubled Asset Relief Program funds to bankroll the FDIC's plan.
The contract with CBRE reportedly contains highly favorable terms including set-up, administrative management and commission fees not typically awarded in comparable contracts. According to the Washington Times, many of the fees either exceed industry norms or would not usually be paid before a sale has gone through.
Based on CBRE's lack of relevant experience, the unusually favorable terms, and the possible intervention of Sen. Feinstein, CREW asked FDIC's IG to investigate whether there was any impropriety in the award process.
Melanie Sloan, executive director of CREW, said today, "In these times of great economic turmoil, we must be able to trust that the government is getting the best value for our taxpayer dollars. The Inspector General should investigate the terms and genesis of this contract and let the American people know if this is a fair deal or not."
Read CREW's letter and exhibits in the Related Documents section on the right.