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Sen. Feinstein’s Husband Reaps Profits from Post Office Closings

By Ken Broder | AllGov | September 30, 2013

The conventional wisdom is that the Internet, competition from the innovative private sector and sky-high pension costs of pampered federal employees are killing the U.S. Postal Service (USPS). The only hope is to slash costs, scale back services, sell off unnecessary assets and shift the business of mail delivery to more efficient private owners.

It’s not true. The post office is being savaged for thinly-disguised political reasons, including the enrichment of a few select individuals. Investigative journalist Peter Byrne says California Senator Dianne Feinstein’s husband, Richard Blum, is one of those profiting mightily.

The postal service’s August financial report (pdf) showed a net operating profit of $182 million with one month left in the fiscal year, and improved revenues over the previous year. But, as post office critics would be quick to point, it still had a net operating loss of $4.95 billion. How can that be?

In 2006, the Republican-controlled Congress passed the Postal Accountability and Enhancement Act, which forced the USPS—which pays its own way and does not receive money from the federal budget—to prefund its future health care benefit payments to retirees for the next 75 years. The Postal Service was ordered to pay for the benefits of workers it hasn’t even hired and do it an accelerated time frame, a requirement not demanded of any other federal government agency.

The law instantly put the post office on the verge of bankruptcy and unleashed a movement to villainize and privatize the service. Unions would take a beating, private carriers would get a boost and $85 billion in hard assets could be sold to those who would know how to properly monetize them.

One of those in the know is Blum, chairman of C.B. Richard Ellis (CBRE), which has the exclusive contract to handle sales of post office property, according to Byrne. In his e-book Going Postal, Byrne cites an audit by Postal Service Inspector General David C. Williams that questions a “fundamental change” in policy that allowed, for the first time, a single outsourced firm to manage all sales and leasing of postal real estate, rather than handling it in-house.

The result, Williams wrote, “are conflict of interest concerns.”

CBRE was hired as exclusive agent for the postal service in June 2011 and proceeded to sell millions of dollars worth of property. By Byrne’s count, CBRE “arguably” sold 52 properties for $66 million less than their assessed value ($79 million if you toss out the nine properties that sold above assessed value). Most of the sales did not involve distressed properties, perhaps ravaged by the economic downturn, and tended to be in economically healthy neighborhoods.

“The sales were mostly of central downtown buildings, with parking, in wealthy or revitalizing neighborhoods that attracted restaurant, boutique, and residential developers, or modern, suburban office buildings and warehouses, also with ample parking that attracted high-tech industrial firms,” Byrne wrote. “In other words, the most saleable postal properties were the ones most likely to command prices that exceeded their assessed values.”

Byrne also found that 20% of the portfolio was sold to business partners or clients of CBRE, while it took up to a 6% commission in 34 of the 52 transactions. CBRE appeared to act as an agent for both the Postal Service and buyers in many of the transactions, contrary to customary property sales, according to Byrne.

On Wednesday, USPS announced that it would ask Congress to let it raise the price of a stamp 3 cents next January 26 because of its “precarious financial condition.”

“Of the options currently available to the Postal Service to align costs and revenues, increasing postage prices is a last resort that reflects extreme financial challenges,” USPS Board of Governors Chairman Mickey Barnett wrote in a letter to customers.

To Learn More:

Going Postal (East Bay Express excerpt from a book by Peter Byrne)

Senator Diane Feinstein’s Husband Selling Post Offices to Cronies on the Cheap (Naked Capitalism)

Contracting of Real Estate Management Services (U.S. Postal Service Office of Inspector General)

The Selling of the Venice Post Office: More than a Touch of Evil (by Greta Cobar, Save the Post Office)

Feinstein Derails Assertions that Husband Is Chief Bidder on High-Speed Rail (by Ken Broder, AllGov California)

Congress Struggles to Deliver Solution to Postal Problem It Created (by Matt Bewig, AllGov)

September 30, 2013 Posted by | Corruption | , , , , , | Leave a comment

New Postal Service Plan a Bait and Switch, Equivalent of Closing 5,567 Post Offices

New “POSt Plan” Is Not Good News for Rural Post Offices or Their Customers

Ralph Nader | May 11, 2012

Consumer watchdog, Ralph Nader, today said, “The Postmaster General’s Post Office Structure Plan (“POSt Plan”) is a bait and switch tactic, and is not good news for rural Post Offices.”

The Postmaster General claims that his new strategy, released on Wednesday, is designed to benefit rural Americans and keep open the 3,652 postal facilities it was considering for closure. Though it is unclear how many of these offices are included in the “POSt Plan”, it seems that many of them have been incorporated in the new plan as well. The new direction that the Postmaster General proposed is to cut hours at nearly 13,000 Post Offices and offer early retirement incentives for more than 21,000 non-executive postmasters.

“As more details about the plan emerge, the picture grows increasingly dire for rural customers of the U.S. Postal Service,” Nader observed. “I expressed deep concern about the preliminary details of the Postmaster General’s plan on Wednesday. Unfortunately, those fears were confirmed as we have analyzed the details of the Postmaster General’s new strategy.”

After examining 260 pages of the U.S. Postal Service’s proposal for Post Office hour reductions nationwide, we found that the new strategy eliminates 42,699 hours per day from retail window hours of nearly 13,000 Post Offices.

“This proposal is calling for a gargantuan cut in retail window hours nationwide – 42,699 total hours each day. To put this in perspective, 42,699 hours equates to nearly 5 years,” Nader explained.

The current average retail window hours of the nearly 13,000 Post Offices proposed for reduced hours are 7.67 hours per day. “The enormous cut in hours that the U.S. Postal Service has proposed is the equivalent of closing 5,567 of these Post Offices. The Postmaster General started with a list of 3,652 offices being considered for closure. Now we see that by reducing window hours he has proposed the equivalent of closing 2,000 more offices than he started with,” Nader continued.

Nader concluded by saying, “This is, plain and simple, a bait and switch. As I said on Wednesday, by further restricting Post Office hours the Postmaster General makes the corporate “alternatives” to the U.S. Postal Service more likely and sets the stage for future Post Office closings when the revenues and workload of reduced-hours offices inevitably suffer. The Postmaster General has effectively taken a list of 3,652 offices that were on the chopping block and added nearly 10,000 more offices to that list.”

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May 11, 2012 Posted by | Deception, Economics | , , , , , , | Leave a comment

Ralph Nader Calls for the Postmaster General to Resign

The Nader Page | April 26, 2012

Consumer Advocate Ralph Nader today called for Postmaster General Donahoe’s resignation. Several consumer non-profits joined him in this letter, including Public Citizen, Consumer Action, the Gray Panthers, and Essential Information. The Postmaster General Donahoe is “actively presiding over the demise of one of our country’s greatest founding institutions,” said Nader.

In December 2011, Congressman DeFazio called for the Obama administration to fire Postmaster General Donahoe. From the House floor he said, “This guy, this so-called postmaster general, should be fired because of a lack of any imagination or initiative…He’s proposing the death knell for the great United States Postal Service.”

In his letter, Nader drew attention to the fact that, if the U.S. Postal Service was not required by Congress to prepay retiree health benefits of the next 75 years by 2012, nearly 80 percent of the USPS’s deficit would be eliminated. Nader stated that this is “an imposition unheard of in either the corporate world or by any other government agency.” He continued by pointing out that the federal government even owes the U.S. Postal Service $80 billion in overpayments that the USPS has made to two retirement funds, the Civil Service Retirement System and the Federal Employees Retirement System.

Yet, Nader notes, the Postmaster General remains virtually silent on these issues. Instead, he says, the Postmaster General makes “the case for shutting rural post offices, slashing 150,000 postal employees’ jobs, ending Saturday delivery, and extending delivery dates as if they do not produce a spiral of decline and loss of customers who will not come back.”

“In a phrase, you are not up to the job!” Nader concludes.

A full copy of the letter can be found here.

For More Information Contact:
Ralph Nader or Jeff Musto
202-387-8034

April 28, 2012 Posted by | Deception | , , , , , , , | Leave a comment