The Senator, The Spy and The Rich Investor

It sounds like a script poached from a spy movie.  A Chinese agent hiding in plain sight, worms his way as an employee of a high-ranking senator with access to some of America's most sensitive secrets. For almost 20 years, the spy reports to intelligence officials embedded in China's consulate.

The senator isn't just another faceless member of the chamber.  This individual once chaired the Senate Intelligence Committee and now sits on the subcommittee for the Senate Select Committee on Intelligence.  Both groups receive briefings from intelligence agencies and review classified intel.   

Five years ago, the FBI approached the senator to apprise her that a staffer was being investigated for spying for the Chinese.  The senator's employee had never been vetted for a security clearance.  Warned by the FBI, the senator quietly forced the traitorous staffer to retire in 2013.

This account is not a Hollywood film.  California Democrat Sen. Dianne Feinstein was duped by a Chinese espionage agent whose handlers operated in San Francisco.  In what appears suspiciously like a cover up, the spy was never charged, saving Feinstein the embarrassment of a messy trial.

It may be purely coincidental but the Senate Intelligence Committee oversees certain FBI investigations into foreign activities.  It is the same committee Feinstein once chaired.  The FBI director at the time was none other than James Comey.

Did the FBI decide it did not want to make an enemy of a powerful senator who might be chair again?  The questions do not end there.

How could a U.S. senator never suspect a Chinese mole was operating in her organization for two decades?  Why did the FBI drop its probe even after they suspected the spy was sharing intel with the Chinese?  How was Feinstein able to shield her entire office staff from further investigation?

Americans, especially Californians, deserve answers.  Apparently, Feinstein considers the matter closed.  The FBI's official conclusion is the spy didn't divulge "anything of substance."  But there has been no public report issued by the agency.  Not even Feinstein's staff knew a probe was going on.

A couple of articles appeared in San Francisco about the episode but the mainstream media ignored it.  Then Politico ran a story online on July 27, 2018, recounting the Chinese recruitment of a member of the senator's staff.  That compelled Feinstein to issue a formal statement on August 6.

In her brief written response, Feinstein said, "The FBI reviewed the matter, shared their concerns with me and the employee immediately left my office."  She left unsaid that the staffer did not depart voluntarily but that the spy was "retired" by the senator.

The spy, outed by The Daily Caller as Russell Lowe, was ostensibly a driver and gofer for the senator. But that description belies his extensive work for Feinstein.  He attended Chinese Consulate functions for the senator.  He served as a liaison to the Asian-American community for her office.

This agent was more than just a driver who could overhear private conversations when the senator was in the car.  He became an confidant with access to Feinstein.  While a special counsel investigation drones on in Washington, the senator treads on her influence to avoid a similar probe.

This isn't Feinstein's first brush with Chinese interference.  After hosting a fundraiser in her multi-million dollar California mansion, she was forced to return a campaign donation from a Chinese national as a result of a Department of Justice investigation in 1996.

Coincidentally, the senator has been one of the strongest proponents of closer ties with China, championing the Communist nation's causes for decades.  Feinstein was instrumental in the effort to make China a member of the World Trade Organization (WTO).

Taking advantage of her access, the senator's husband, investment financier Richard Blum, rode the coattails of his wife, accompanying her on numerous official government trips to China.  Surely it was just a coincidence that Blum's firm Newbridge Capital began investing in the Asian country.

Prior to Feinstein entering the senate, Blum had little investment interest in China.  At that time in 1992, he held a stake in one project worth less than $500,000, according to financial disclosure records.  Apparently, he discovered more lucrative deals once he visited China with his wife.

In 1996, Blum invested $23 million in a steel company owned by the Chinese government. His firm also acquired assets in companies in the Communist nation that produce soybeans, milk and candy, according to a report in the Los Angeles Times.

Under Blum's tutelage, the firm began sinking millions in Chinese government connected businesses.  Before long, his China investments began to draw scrutiny, particularly a $300 million position in Northwest Airlines, then the sole non-stop operator with permission to fly from the U.S. to China.

When pesky questions arose in 1997, Blum dodged a media bludgeoning by cleverly pledging to donate any future profits from his holdings into a nonprofit foundation to aid Tibetan refugees.  But in 2000, Newbridge continued to own stock worth millions in Chinese corporations.

An article in the Los Angeles Times pointed out the possible conflict of interest in 1997 and both Feinstein and Blum insisted they "maintained a solid firewall" between her role as an influential foreign policy player and his career as a private investor overseas.

Blum currently is chairman of Richard C. Blum & Associates, Inc., the general partner of Blum Capital Partners, L.P.  The vice president of the firm is T.C. Ostrander, who served five years as Senator Feinstein's advisor on financial, banking and economic policy in Washington.

Apparently, the "firewall" doesn't preclude a cozy relationship between Blum's private firm and the senator's staff.

And Blum's firm continues to trade on its connections to China.  For instance, one of the Blum Capital Partners' main investments is Avid Technology, which two years ago expanded its presence in China through a $75 million investment in a Beijing company.

In light of the current climate in Washington, eyebrows should be raised by this tale of spying and potential influence peddling.  It is well known in the intelligence community that the Chinese are overtly courting favor with key U.S. influencers in both government and business.

Yet no one appears interested in Senator Feinstein's decades long friendly relationship with Chinese leaders nor her husband's investments in some of the Communist nation's state-owned businesses. Nothing to see here. Old news, the wealthy couple insist as they swat away prying eyes.

The Democrat senator, a long-time Chinese ally with 16 years tenure in the Senate, appears to be able to skirt the rules and standards that apply to other lawmakers and The White House. It must be good to be Dianne Feinstein.