Initially reported as part of a larger story about spies in Silicon Valley, a former intelligence official later revealed that the staffer was Feinstein’s driver for many years.
The staffer was recruited to spy after visiting China.
The staffer, who has not been named, worked for Feinstein for 20 years.
Senator Feinstein was alerted to the spy about five years ago. The FBI alerted Feinstein after investigating and finding the staffer shared nothing of substance.
“They interviewed him, and Dianne forced him to retire, and that was the end of it,” the source said. “None of her staff ever knew what was going on. They just kept it quiet.”
Feinstein’s Relationship With China
Some details of Feinstein’s past are now being examined anew, centered on her close relationship with China, beginning with her service as mayor of San Francisco from 1978 to 1988.Feinstein also defended China, despite its communist policies, insisting that it was merely “socialist.”
Husband Becomes Prominent Investor in China
Several articles from the 90s explore the development of not only Feinstein’s developing relationship with China while she was mayor, but her husband’s burgeoning investments there.In 1992, the investments amounted to one project worth less than $500,000. Two years later he was planning to invest up to $150 million and two years after that a Blum investment firm paid $23 million for a stake in a Chinese government-owned steel company.
Another investment by Blum’s firm was helped by the International Finance Corp., an arm of the World Bank, which invested $10 million in the leading producers of soybean milk and candy in China.
“It seems to be going quite well,” Rashad Kaldan—who in 1994 managed the IFC’s capital markets investments in Asia—told the Times of the project. He added: “There also was some comfort in that Mr. Blum had some contacts with the Chinese.”
Trips to China
Feinstein took three trips between 1995 and 1997 to China, in addition to trips earlier in her mayoral service, to meet with top communist officials, including Jiang. Blum often attended the meetings with her, an arrangement the Times described as “unusual.”At one time, the couple had dinner at Zhongnanhai, the enclave reserved for the Chinese Communist Party’s officials located in Beijing.
Feinstein insisted that Blum had never spoken to officials during meetings about business.
“I am open to any suggestion as to how I can even make a firewall more fireproof,” she said. “I don’t know what else I can do. . . . Either he retires or I suppose we end our marriage.”
Experts noted that even attending the meetings and being so visible conferred a certain benefit to Blum, in addition to Feinstein’s pro-China record.
“There is no doubt in my mind that, if Dianne Feinstein had a pattern of taking positions on U.S.-China policy that Chinese officials disliked, Mr. Blum would have a great deal more difficulty doing business in China and probably would find it impossible to do,” said Ross Munro, co-author of “The Coming Conflict with China.”
The Los Angeles Times noted that Feinstein has sometimes taken on issues that seemed to coincide with those of her husband, such as calling in a speech on the Senate floor in 1994 for President Bill Clinton to increase favorable trade relations with China. At the same time, Blum was planning to invest up to $150 million there.
China Attempts Illegal Contributions
A widespread campaign of making potentially illegal donations stemmed from a 1996 vote on whether to bestow permanent most-favored-nation trading status on China, an effort Feinstein led.“We have reason to believe that the government of China may try to make contributions to members of Congress through Asian donors,” a statement in the FBI briefing materials to elected officials read.
A Justice Department task force said Feinstein nor any other member of Congress knowingly received illegal payments from the Chinese government.
However, authorities said that the Democratic National Committee returned $3 million in campaign contributions because the money came from questionable or improper sources. Officials believed the potentially illegal campaigns were an attempt to influence votes on the trading status.
Feinstein has received awards and recognition from some groups for promoting U.S.-China ties, accepting the California-Asia Business Council’s New Silk Road award in 2005.
“For many of us who watch China, there is both a sense of awe at what China has accomplished, as well as a sense that it could all unravel overnight.”
“Rather than just pinning the blame on China, we need to better understand the costs that lead to outsourcing abroad and take action to remediate them,” she added.
“I strongly believe that the US-China relationship is and will be America’s most important bilateral relationship. We must not let differences, economic or otherwise, derail the progress that has already been achieved over the past three decades.”