February 7-13, 2007

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Letters to the Editor

Michael R. Klein Responds

I am writing to respond to two recent articles by Peter Byrne about me and my efforts on behalf of my friends, Dianne Feinstein and Richard Blum ("Senator Warbucks," Jan. 24; The Byrne Report, "Daddy Kleinbucks," Jan. 31). Without seeking to address all of Byrne's many inaccuracies, I want your readers to know the following core points.

I did not assist Sen. Feinstein to use her position to enhance her husband's investments in Perini Corp. or URS. In fact, the opposite is true, as I will explain.

When Blum Capital invested in Perini, a construction business, in 1997, Richard and I negotiated three conditions designed to preclude any suggestion that the senator would or could help Perini:

First, Perini would not lobby or contact the senator at all.

Second, Perini would stop bidding on federally funded work in California, so that on issues relating to her constituents, she need not worry about being seen to aid Perini.

Finally, Perini, acting through me, would periodically alert a senior staffer in the senator's office to any proposed Perini bid that might depend on new funding, so that the Senator could avoid any action to aid Perini. Perini complied with all three conditions, and they worked. The record is clear that the senator never, not once, proposed, voted for or otherwise supported any measure that would specifically benefit Perini. Indeed, what this system of alerts also revealed over the time that Blum Capital had its investment (1997-2005) was that every federally funded job that Perini planned to bid for previously had been funded, typically by general multibillion dollar, multi-year appropriation bills which never provided a single special, targeted or other specific benefit for Perini. Byrne's suggestions to the contrary are based on misunderstandings, mischaracterizations or outright lies.

The same is true regarding URS, for a different reason. Blum Capital had invested in URS before his wife became a senator. After we had negotiated the anti-conflict assurances with Perini, Richard asked URS to do the same, but URS declined except to promise not to lobby the senator. Thus the senator was not informed what federally funded business URS might be seeking. Again, she never, not once, proposed, voted for or promoted any legislation that she understood would specifically benefit URS.

As to Astar Air Cargo, as Byrne finally acknowledged after reciting a series of arguments made by DHL competitors when I and Richard invested in Astar Air Cargo, every single one of those arguments was found to be groundless by an administrative law judge and then affirmed by the Department of Transportation after a full litigated hearing in which those competitors failed to prove any of them. By the way, contrary to Byrne's description of Astar's business, only about 5 percent of Astar's flying has involved the military; its basic business is flying commercial packages around the United States for DHL.

Finally, I must address Byrne's mischaracterization of me as a "war profiteer" engaged in a massive cover-up of ethical misconduct. That is both false and offensive. Less than 1 percent of my net worth and less than 5 percent of my income has come from military- or civil-government-related revenue. My principal asset is CoStar Group Inc., a business I founded that sells commercial real estate data embedded in software.

The principal source of my earnings has been as a partner of a law firm where much of my career involved investigating and disclosing corporate misconduct. That firm, Wilmer Cutler & Pickering (now Wilmer Hale), has for decades been a leader in providing free representation for a wide range of public-interest causes (last month, it was among those criticized by a Bush administration official for providing free representation to Guantanamo detainees). I have been involved in a wide range of anti-war and other public-interest activities throughout my life.

As to the Sunlight Foundation, my involvement in it as a co-founder and its principal financial supporter (thus far over $4 million) is a source of great pride to me, my colleagues, our grantors and grantees. Sunlight is all about bringing transparency to the Congress, and we practice what we preach. Your readers can visit and judge for themselves. Thus, Byrne's description of me and Sunlight as "systematically purchasing control over the agendas of congressional watchdog groups and journalists" to cover up my activities or Blum's as war profiteers is an extraordinarily bizarre assertion having no relationship to reality. Little else in his articles is any more accurate.

Michael R. Klein, Washington, D.C.

Editor's note: We did Mr. Klein the courtesy of reprinting his letter as sent. However, the Bohemian stands by the facts as reported.

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