Advertisement
YOU ARE HERE: LAT HomeCollections
(Page 2 of 2)

California and the West | CALIFORNIA ELECTIONS / U.S.
SENATE

Husband's Business Ties to China Dog Feinstein

As he vows to have no personal stake in the nation, the senator expresses frustration that the issue remains under constant scrutiny.

October 20, 2000|RICHARD SIMON and GREG KRIKORIAN | TIMES STAFF WRITERS

He is chairman of BLUM Capital Partners L.P., which, along with its affiliates, manages $3.5 billion in assets invested in companies involved in everything from high technology to aviation. Blum and his firm have interests in dozens of partnerships.

Blum also is a director of companies such as Northwest Airlines, Korea First Bank in South Korea, Playtex and Shaklee. He is honorary consul to Nepal and Mongolia and once served as an unpaid "special foreign advisor" to Shanghai International Trust and Investment Co., a government-owned investment firm.

As the husband of a senator and former mayor of San Francisco, Blum has enjoyed access to Chinese officials. He has accompanied his wife on trips to China, including one in August 1999 when she delivered a letter from President Clinton to President Jiang Zemin, seeking to jump-start talks on China's entry into the World Trade Organization. The couple paid their own way.

In the mid-1980s, Blum invested in a trading company and a building in China. A spokesman said the investments were liquidated in 1994, two years after Feinstein was elected to the Senate.

That year, Blum joined forces with Texas financier David Bonderman to create Newbridge Associates Ltd. to seek investments in emerging countries such as China.

With more than $100 million in capital, the first Newbridge limited partnership bought major interests over the next few years in a Chinese pig iron company and in leading Chinese producers of soybean milk and candy.

His business activity generated enough controversy that in 1997 he pledged to donate profits from his China investments to the American Himalayan Foundation, a charity he founded and runs out of his office to support social programs in Tibet and other countries in the region.

Last May, as Feinstein campaigned for reelection, Campbell accused her of failing to fully disclose Blum's financial interests. "Do you or your family have any holdings in China?" Campbell asked.

A Feinstein campaign aide said Blum no longer had any investments in "mainland China."

Earlier that month, Blum had divested himself of an investment in a Hong Kong-based Internet company, Asiacontent.com, his spokesman said recently.

When asked whether Blum planned to donate the profits from Hong Kong investments to charity, his spokesman initially said that no commitment had been made to do so. But days later, the spokesman said Blum's investment of $100,000 to $200,000, in fact, had been placed into a charitable trust on May 1, because it was mistakenly listed as a mainland China investment, not a Hong Kong investment.

In fall 1998, Newbridge Asia II, another firm, bought a stake in Kerry Properties, a large Hong Kong-based property investment and development company with projects throughout China.

Blum's spokesman said that Newbridge sold its interest in Kerry in April and August and that Blum would give his approximately $400,000 profit to the charitable trust.

The Newbridge partnership, of which Blum is co-chairman, made two investments in recent months in China: China Civilink Ltd., an Internet provider, and Zhongxing-Suntek Data Communication Co. But Blum's stake in the investments was simultaneously transferred to an irrevocable charitable trust, according to his spokesman.

Blum sold his last personal investment in mainland China--North Dragon Iron & Steel Group--on Dec. 1, 1999, although Newbridge still has an investment in the company, his spokesman said, noting that Blum lost $105,383 last year on mainland China investments.

Blum's earlier $490,000 investment in Shanghai Pacific Partners made a $203,000 profit, he said, and now is in liquidation.

Stakes in Firms With China Presence

Newbridge Capital Ltd., formerly Newbridge Associates, last year bought a controlling interest in Korea First Bank for a reported $415 million. Blum is a board member of the bank, which affiliated with Qingdao International Bank in China three years earlier.

The China-Korea joint venture, Blum's spokesman said, constitutes only about 1% of Korea First's assets. "The fact that Korea Bank may be doing business in China is . . . no different than any other company located in the United States--such as Boeing, GE, GM or IBM--doing business in mainland China," he said.

Blum owns interests in Northwest Airlines and iAsiaworks, a San Mateo company that has set its sights on China's Internet market.

His spokesman said Blum's partnerships and accounts he manages own about $116 million in stock in Northwest, which in 1998 signed a three-year passenger sharing agreement with Air China, China's flag carrier. Northwest is seeking U.S. Department of Transportation approval to add flights to China.

Blum has $457,000 invested in iAsiaWorks, and the company had $47,000 in China revenue last year, his spokesman said.

Blum expressed dismay over continued questions about his business, noting that last year he received an award from the Dalai Lama. He and his wife donated about $560,000 to the Himalayan foundation.

"I am very proud to have received this award, but it's hardly one I would have been interested in if I care at all about making money in China," Blum wrote.

*

Times librarian Paul Singleton contributed to this report.

Advertisement
Los Angeles Times Articles
|
|
|