CALIFORNIA ELECTIONS : U.S. SENATE : Huffington Accuses Feinstein of Improper Votes : Ad says the senator supported bills benefiting a firm partly owned by her husband. He terms the charge outrageous.

After months of complaining that his wife was an unfair political target, Republican U.S. Senate candidate Mike Huffington on Monday blistered Sen. Dianne Feinstein and her husband in a television commercial that accuses Feinstein of improperly voting on bills that financially benefited the couple.

Specifically, the commercial accuses the incumbent Democratic senator of casting four votes on appropriation bills that benefited a vocational education company whose largest shareholder is a company owned by her husband, investor Richard Blum. The ad, which began airing statewide Monday night, contends that Blum and the Irvine based-company, National Education Corp., have received “millions from taxpayers.”

Feinstein’s campaign manager and Blum immediately attacked the commercial as outrageous, wrong both in fact and in its implication that Feinstein acted to benefit herself financially.

“They are saying Feinstein votes certain ways to benefit her and her husband. The fact is they lost money. They say the company received (more than $100 million) since she became a senator. The facts are NEC did not receive this money from the federal government. . . . They are loans that go to students,” said campaign manager Kam Kuwata.

Blum called the ad “a desperation attempt by a politician who, frankly, is out of control. And I deeply resent his taking a totally distorted shot at National Education Corp.”

“I have sat by for six months while both (Huffington) and, on occasion, his wife, have absolutely distorted everything my wife has ever stood for . . . in what has been absolutely the most malicious campaign I have ever seen,” Blum said.

While it makes several accusations, the thrust of Huffington’s commercial is that Feinstein improperly voted on federal education funding that made its way to NEC, a 4,000-employee corporation that operates vocational schools and publishes workbooks.

Though Feinstein did vote on two appropriation packages totaling more than $4 billion, the funds for student loans and other education programs did not include specific allocations to NEC. Instead, the funds provided for student loans that help fund vocational schools such as those run by NEC.

Under Senate ethics rules, Feinstein is allowed to vote on bills that affect her husband’s finances as long as the legislation is not designed to specifically benefit Blum or his investments.

Huffington’s campaign said the allegations would be aired in both 30-second and 60-second spots, the latter the longest negative ad aired so far by Huffington. The first-term congressman from Santa Barbara has spent more than any candidate in U.S. history, most of it on television ads, in his closely contested race with Feinstein.

“Feinstein,” the ad concludes, “a senator who serves special interests . . . and her own.”

Although the commercial clearly suggests that Feinstein’s husband is profiting from her government service, Ken Khachigian, Huffington’s senior adviser, insisted that its intent is not to attack her husband but to show Feinstein’s alleged conflict of interest.

“Dick Blum is not the issue. The issue here is Dianne Feinstein voting on an issue that directly benefits her financially,” Khachigian said. “It is one thing for Mr. Blum to have financial interests. It is quite another for her (Feinstein) not to . . . know there is a conflict and decline to vote.”

But Herbert E. Alexander, director of the Citizens Research Foundation at USC, an organization that studies political financing and ethics, said, “If it was a broad-based bill on education, there should have been an inclination to vote for it.

“Now, she may or may not have realized that there were (financial) consequences related to her husband. But even if there were, she may have had an overriding reason for voting for it, namely that this is an education program important to a lot of people.”

Alexander added that the commercial underscores the nastiness of the Senate campaign. “There is so much negative that they are really digging pretty deep now.”

According to the commercial, NEC has received more than $100 million in federal funds since Feinstein became a senator.

But Feinstein’s campaign pointed out, and Huffington’s spokesman admitted, that NEC had taught students financed by federal student loans for many years before Feinstein was in the Senate. Those funds also were provided to students, not directly to the schools.

Further, Blum contended that his company’s investment in NEC has actually lost about $12 million during his wife’s time in the Senate.

In addition to the allegation of a conflict of interest, the commercial alleges that “some controversial schools are run by the National Education Corp., whose largest shareholder is Richard Blum’s company.” Later, the ad claims that NEC employees pleaded guilty to 23 counts of defrauding the government and have been “investigated nationwide.”

Blum acknowledged that three employees at one NEC center in Houston did plead guilty to forging documents to receive about $300,000 in federal loans. But Blum said that the misdeed took place in 1988, shortly after his company acquired some shares in NEC, and the firm since has enjoyed a good record.

But the Huffington campaign says the ad is accurate. Khachigian said, “In this case, I think what is clear is that Dianne Feinstein should have been all the more vigilant about her votes.”

Khachigian added that Blum’s business activities were fair game even though the Huffington campaign has bristled at questions about the congressman’s wife, Arianna, and her involvement with a controversial Los Angeles church.

“Our objection to their mention of Arianna has always been that it relates to her personal beliefs and has almost nothing to do with his conflicts as a congressman or potential conflict as a U.S. senator,” Khachigian said.

Times staff writer Glenn F. Bunting in Washington contributed to this report.