UNITED STATES POSTAL SERVICE OFFICE OF INSPECTOR GENERAL 1735 NORTH LYNN STREET SUITE 10000 ARLINGTON, VA 22209-2020 CASE CROSS REFERENCE TITLE: ALAN C. KESSLER, MEMBER, POSTAL SERVICE BOARD OF GOVERNORS, WASHINGTON, DC CASE AGENT (if different from prepared by): MEMORANDUM OF ACTIVITY On June 8, 2011, Special Agent lot the United States Postal Service Office of Inspector General (OIG), conducted a review of case evidence, including e-mails, calendar logs, memorandum of interviews, memorandums, briefing documents and other information developed during the course of the investigation regarding Alan Kessler, Member, U.S. Postal Service Board of Governors. The reporting agent (RA) identified the following significant contacts involving Kessler and the Sarasota, FL, property dispute between September 2009 and December 2010. The following list of Kessler's contacts was compiled through document and e--mail reviews, as well as witness interviews. However, the OIG did not obtain telephone records. CONTACTS BETWEEN POA, KESSLER, AND POSTAL SERVICE OFFICIALS 1. Greg Band sent Kessler an e--mail on September 1, 2009, containing a document detailing Post Office Associates position on their property dispute with the Postal Service. On September 2, 2009, Kessler forwarded the e-mail to General Counsel Mary Ann Gibbons, and included the following comment: I am attaching a copy of a memorandum regarding an apparent dispute with the owner of the Sarasota Post Office in a position taken by USPS. This matter, of which I am assuming you may be aware, involves an original lease executed in 1985 and an amendment negotiated in 1981 in which the rental paid by USPS was significantly decreased (by approximately At the same time, the owner contends that the previous fixed price purchase option had to have changed in favor of a fair market value/appraisal purchase option. Thus, the owner states "for the USPS to have received a dramatically below market rent for 28 years and to now contend that the purchase option in the original lease is still valid allowing them to purchase the property at a price that was below market in 1981 when the lease amendment was signed is unjust, unfair and unreasonable." Mary Anne, as you Page 1 INFORMATION This report is furnished on an official need to know basis and must be protected from dissemination which may compromise the best interests of the U.S. Postal Service Office of Inspector General. This report shall not be released in response to a Freedom ofinformation Act or Privacy Act request or disseminated to other parties without prior consultation with the Office of lnspecto' General. Unauthorized release may result in criminal prosecution. know, I do not involve myself inthe day-to-day operations of the Postal Service, although I have not hesitated to pass on matters of serious concern, when appropriate, to those who do pass on suchmatters. I am concerned that this matter appears to be headed to significant and possibly difficult litigation unless reasonable heads prevail. Could you please carefully review this matter and reach out to Gregory S. Band, Esquire. Greg Band's September 1, 2009, e-mail to Kessler was preceded by a series of communications (both e--mail and telephone) between' Doug Band, Kesslerand Greg Band. 2. On December 2, 2009, Kessler participated in a teleconference with theproperty owners and attorneys, in which they discussed POA's draft reply to a Postalservice letter. POA's reply letter was suggested by Kessler. Two days after the teleconference, the final version of'POA's letter was sent to the Postal Service. 'On December 11, 2009, Governors Kessler, Mickey Barnett and Thurgood Marshall, Secretary Julie Moore, and Gibbons exchanged e-mailsiregarding the criteriafor Gibbons' future briefings about litigation to the Governance and Strategic Planning Committee (GSPC). The e-mail clarified what types of information the GSPC>>would receive during their briefings. During the exchanges Kessler stated: one of your criteria Mary Anne, as you know, I have been contacted by the Band' Family regarding a real estate issue which may be somewhat troubling, I did advise Mary Anne that I know one of themembers of the Band family, but othen/vise have no professional or business relationship. Therefore, on that matter, lwould' like a follow--up, briefing. At Kesslefs request, Gibbons added the Sarasota, FL property dispute to the GSPC agenda and provided at least two formal briefings to the GSPC, in April 2010 and December 2010. 4. On December 11, 2009, Gibbons sent Kessler an e--mail and provided him with the Postal Service's position on theon the propertydispute. On December 15, 2009, Kessler sent a response e-mail to Gibbons thanking herfora recentfupdate and advising he was still "troubled." Kessler stated the following: Thanks very much for therecent update on the Sarasota Post_Office matter brought to my attention by Mr. Band. I must saythat am still troubledsomewhat by the argument regarding the 1981 amendment. Thus, I guess I am not sure what the purpose of the fair marketvalue option would have been, if it were not to have been exercised and how theassurnption of maintenance, utilities and taxes compared to' the reduction in the rental. Page 2 This report is fumished on an official need to know basis and mustbe protected from dissemination which may compromise the best interests ofthe U.S. Postal Service Officeiof Inspector General. This reportshail not: be released inresponse to~.a Freedom of Information Act or Privacy Act request or disseminated to other parties without prior consultationwith the Office of inspector General. Unauthorized release may result in criminal prosecution. 1 is there no compromise available that would allow us to avoid expensive and possibly timeconsuming litigation? 5. On or about March 11, 2010, Kessler participated in a teleconference with Governor Marshall, Gibbons, and other Postal Service employees todiscuss the Sarasota property dispute; OIG was advised by one of the participants that?Kessler position was adversarial, stating "Kessler was testing our position'" withlfacts and mirrored the property owners' position. 6. According to Facilities Vice President Tom Samra, on or about, March 23, 2010, Kessler conducted a meeting regarding Sarasota, FL, property dispute in the office of the BOG. Samra, Gibbons and Kessler were present for the meeting. 7. On July 19, 2010, Doug Band complained in an e-mail to e-mail Samra sent to another POA principal, N.J. Olivieri. On the same date, Kessler attempted, through Board of Govemors' Secretary Julie Moore, to set up atelephone call with Gibbons about "an unprofessional response by Mr. Samra relatedlto the Sarasota matter." (Attachment 1) 8. On Jul 20, 2010, Chief Counselfor Ethics and Federal Requirements sent an e-mail to 'Gibbons ex ressing herconcerns aboutK'eiss|er's personal involvement in the property dispute.quoted the provisions of 5--CFR Gibbons responded to withthe following e-mail; I have had a discussion w/Governor Kessler. From our discussion, it appears that he understands the issue and, therefore, hehas agreed notto have further personal involvement in the matter; l-lewill inform, the' individual who contacted him that any further concerns about professionalism and the like should be raised with me. The followingday, Law Department (DWXC) Counsel e-mailed (Attachment 2) a colleague that: [Gibbons] justtold me that she told [Kesslerthat] questions had been raisedabout his involvement and that he needed to back offset this point. However, she has also decided that to insure there is nothing to their potential complaints about Tom [Samra], she wants to be at the meeting with the owners after Tom reviews the proposal. 9. On August 13, 2010, Kesslerlcontacted DeputyjGeneral CounselJCharlestKappler about scheduling a future meeting with Band (POA). During the conversation, Kessler advised Kappler he (Kessler) was instructed to "keep out" of the Sarasota matter. Page 3 RESTRICTED NFORMATION This report is fumished on an ofiicial need torknow basis andrmustbe protectedfrom dissemination which may loornprornise the bestjinterestsof the Postal'-Service, Office, of Inspector General. This jreportshall ,notfbe :releasedin_ response to gafireedom of Information' Act or Privacy Act request or dlsseminated*to.other parties withoutprior consultation with the Office of Inspector General. Unauthorized release may result in criminal prosecution. Prior to Kessler's telephone call with Kappler, Kessler received a forwarded email from Doug Band regardinga POA request-to meet with Gibbons regairdirigithe property dispute. 10. According to a written statement by Gibbons, subsequent to a BOG meeting in December 2010, Kessler approached Gibbons and told her: The lessor had informed him that a settlement proposal they had submitted was summarily rejected by USPS. As he had done previously, Gov. Kessler expressed concern that USPS facilities staff may not have been acting courteously and that this could cause the lessor to pursue political action that would hurt USPS. Attachments: 1. July 19, 2010, e-mails. 3-far df 2. July 21, 2010. e-mail. Special I it Page 4 RESTRICTED INFORMATION This report is furnished on an official need to know basis and must be protected dissemination which may compromise the best interests of the U.'S.Postal Service Office of Inspector General This reportshall _not be released in response to a Freedom ofylrifonnation Act or Privacy Act request or disseminated to other parties without prior consultationvwith the Office of inspector General. Unauthonzed release may result in criminal proysecutiori. From: Doug Band [doug@presidentclinton.com] Sent: Monday, July 19, 2010 9:59 PM To: Kessler, Alan subject: Re: Sarasota This is nice for him Original Message .From: Kessler, Alan To: Kessler, Alan Sent: Mon Jul 19 16:52:48 2616 Subject: Fw: Sarasota what a guy that samra is Original Message From: NJ To: Greg Band Doug Band; 'steve.hur1but@akerman.com' Sent; Mon Jul 19 16:51:39 2910 Subject: Fw: Sarasota Greg: . Below is the email from Tom Samra. I need the Final report as soon as possible so I can get it to Samra. From: Samra, Tom A - Arlington, VA [mai1toKbX7XC) I Sent: Monday, July 19, 2619 4:45 PM . To: NJ Cc: Subject: Re: Sarasota I was sorry to hear about your colleague's illness. I do need to inform you that the Department of Justice intends to go forward with the Filing of the related litigation, and they tell us that should occur by July 30th. In the meantime, we will evaluate your proposal if we receive it in the near future . From: NJ I I 'To: Samra, Tom A - Arlington, VA Sent: Thu Jul 15 13:45:27 2618 Subject: Sarasota Sorr For the dela but one of our partners He wanted his children to review the report before I submitted it to you so they can be made aware of what is happening. Hopefully I should hear back From them and his wite shortly. These are not ?un times. Hopefully you understand and I should send this to you once it has been approved by all the partners. Once you receive the report I would like to meet with you to see if it is acceptable and to see what questions I can answer and how we would structure an arrangement from this point on. NJ Olivieri, President Horizon Mortgage Corporation 298 South washington Boulevard, Suite 8 .aras ta Florida 34236 Confidentiality Notice: This e~mail message, including any attachments, is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. For more information about Duane Morris, please visit Confidentiality Notice: This electronic mail transmission is privileged and confidential and is intended only For the review of the party to whom it is addressed. If you have received this transmission in error, please immediately return it to the sender. Unintended transmission shall not constitute waiver of the attorney--client or any other privilege. CONFIDENTIAL rm: Sqnf; 3955*' . .. .. . xqu. and Maw Mr-' Siiflvri gnlat?ilflo-tlicisnfimbta 'yjoub"c' from 3:30 Efidayfijqna; I-'mm: I Sent: 7/2 l/2010 2:50:20 Received: 7/21/2010 2:50:22 PMIGMTI To: CC: BCC: Subject: Re: Misue of Position She-just' thzuthis moming she told him questionsthadlbeen Vraiscdiabout his involvement andthat he needed to U1iS;p9inl, However. she also has decided thatto insure there is nothing, to their potential complaints about Tom. she wants to be at the meeting with the owners a Tom reviews the Via Blackberry Handheld mm To: I 21 09:05:02 20l0 Subject: FW: Misue ef'.l'osition l'v'lA(iaslc' ut involvement in Sarasotayesterday afternoon. Emtn Washington. DC Sent: Wednesday. July ll. 20! 0 8:56 AM Subject FW: Misue. of Position l"Yl From: (hhbons. Mary Anne - Washington. DC To: Washington. DC Subject Misuc of Position Tltank you for this have had :1 discussion From our discussion, it appears that he the potential eappcarance issue he has agreed not to have further personal involvement in the matter. He will. inform the individual who mnmeted him. that any further concerns about professionalism and the like should be raisedlwith me. Mary Anne Front: 7 DC Sent: Tuesday. July 20. 2010 5:24 PM To: Gibbons, Mary Anne - Washington. DC Subject: FW: Misuc'oi"l'osition The citation for the quotation below is 5 CFR Fromtl lb 117 )1 Washington. DC Sent: Tuesday. July 20.2010 5:22 PM To. Gibbons. Mary Anne - W:tshingum. DC Subject: Misue oi'l'osition Mary Anne, under the "Misuse ol'i'osition" regulations. here is what I am concerned about with respa.-Lt to Governor Kcss|et's participation in the Samsotnimmter: of ofiieinl duties 8 private intetuzt To ensure that the performance of his ofiicial duties does not give rise 10 an' appearance. ofuse of public olliee for private gain or ofgiving pn:li:n:ntial treatment. an employee whose duties would afiect the linzmciel interests ofa friend, ~wiiIi W. avnii?lil? the. n19v9?'w- fiiforih pmbteiaznndiwaittror. UNITED STATES POSTAL SERVICE OFFICE OF INSPECTOR GENERAL 1735 NORTH LYNN STREET SUITE 10000 ARLINGTON, VA 22209-2020 MEMORANDUM OF INTERVIEW Interview Date: April 5, 2011 Case Name: ALAN C. KESSLER, MEMBER, POSTAL SERVICE BOARD OF GOVERNORS, WASHINGTON, DC Case Number: interviewee: Alan Kessler Interview Location: Postal Service Headquarters 475 L'Enfant Plaza, SWL Washington, DC 20024 Interviewed By: Special I land Attorney William Keefer Witnesses: On April 5, 2011, Special Agent lnvestigatoriimmic) and Attorney William Keefer, U.S. Postal Service Office of Inspector General (OIG), Special Inquiries Division (SID), interviewed Alan Kessler, a member of the Board of Governors (BOG) of the Postal Service. This Memorandum of Interview summarizes the content of the interview about his knowledge of and involvement with the Postal Service's lease and purchase option for property in Sarasota, FL, owned by Post Office Associates (POA). Kessler participated in an initial interview on February 9, 2011 and this interview provided an opportunity to obtain clarification on answers provided by Kessler on February 9, 2011. Kessler provided the reporting agent with the following information: When asked what are your fiduciary responsibilities as governor? Kessler said that his fiduciary responsibilities are to overall, act in the best interests of the Postal Service, deal with broad issues, planning and review of strategies, monitor individual issues and deals (financial) that impact the Postal Service. As Chair of the BOG Governance and Strategic Planning Committee, Kessler said that he is responsible for Postal Service planning and review other issues with possible significant impact on the Postal Service. He is also responsible to look at the negative impact of Postal Service decisions, but not micromanage its operation. Page 1 RESTRICTED INFORMATION This report is furnished on an official need to know basis and must be protected from dissemination which may compromise the best interests of the U.S. Postal Service Office of Inspector General. This report shall not be released in response to a Freedom of Information Act or Privacy Act request or disseminated to other parties without prior consultation with the Office of Inspector General. Unauthorized release may result in criminal prosecution. Kessler advised during his re-nomination process for the BOG, he met with Senator Collins, who he said, believes the BOG should be more involved in labor and legal issues. Kessler said that the property dispute between the Postal Service and Post Office Associates "falls in a larger area" of significant legal matters that can impact the Postal Service. Kessler said any legal matter is something the BOG should review and be involved in on a formal level. Kessler said that he has tried to have the same approach to anyone who comes to him with a Postal Service issue. He said the Postal Service is a service business and the BOG should be responsive. Kessler handles all requests the same. When he received concerns from external parties, he passed the information on to the Secretary to the Board Julie Moore for appropriate action if it is a non-legal matter. Kessler said initially, legal issues were forwarded to Moore, who then passed them to General Counsel Mary Anne Gibbons. Kessler said that he received information about the property dispute between Post Office Associates and the Postal Service from Doug Band. Kessler knows Band through a political campaign with former President Clinton. Kessler said that he has no financial, business or social contact with Band. He characterized Band as a political colleague. He said that he does not see Band often, only when he (Band) is working and visiting with President Clinton. Kessler said he could not recall an instance when he shared a meal or drink with Band. Kessler said he has a political affiliation with former President Clinton, who nominated Kessler for the BOG. Band worked with former President Clinton in the White House and has a position with the William J. Clinton Foundation. He said that he normally sees Band when he visits President Clinton, because Band works for Clinton. He said normally Band, through the Clinton Foundation, "asks for things, [but] don't do things." Kessler requested and received from Band, a summary with his issues regarding the property dispute. After review, Kessler was concerned with Band's issues. Kessler said the Postal Service believed they had a strong position, but he felt that both (Postal Service and POA) had strong cases. Kessler said he does not "know any case where the judge doesn't want the parties communicating, look for basis to resolve." Kessler said he was interested in the process and ensuring that POA had their "points communicated." Kessler said that the dispute had costs and risks of litigation, such as "money and time" and the Postal Service could be portrayed as unjust. When asked to explain the issue between POA and Postal Service as he understands it, Kessler said he recalled there was an issue of whether the Sarasota, FL real estate was valued by the Postal Service using fixed value or should it be valued differently, using fair market value, which he recalled was agreed to by the Postal Service. He also vaguely recalled the dispute was over a reduction in rent vs. maintenance of the building the Postal Service tool over. The Postal Service valued the POA property less and the owners' (POA) valued the Sarasota, FL, property more. He also recalled that POA's position was that the Postal Service only agreed to do maintenance on the exterior of the Page 2 RESTRICTED INFORMATION This report is furnished on an official need to know basis and must be protected from dissemination which may compromise the best interests of the U.S. Postal Service Office of Inspector General. This report shall not be released in response to a Freedom of Information Act or Privacy Act request or disseminated to other parties without prior consultation with the Office of Inspector General. Unauthorized release may result in criminal prosecution. building and countered the Postal Service's claim that the Postal Service maintained the interior of the Sarasota Post Office and Vehicle Maintenance Facility building. Kessler could not recall all the details of the property dispute, stating have a lot of cases, and don't recall the substance after a while." He referenced the "sponge theory," specifically the "brain gets full and don't remember more." However, Kessler said he was concerned with the Postal Service's real estate techniques and practices. Kessler was also "concerned with the communicating" between the Postal Service and POA. Kessler added he cared about the process, therefore after he received POA's memo regarding the property dispute, he "dictated an e-mail to Gibbons, based on the memo." Kessler also stated he reviewed another summary from Band and contacted him by telephone to "go over it." When asked if POA's attorneys participated in any of his telephone meetings with the property owners, Kessler confirmed he participated in multiple calls with attorneys Doug and Greg Band, as well as one or two calls with the attorneys representing POA in the property dispute. He recalled most of his communications with POA, were with Doug or Greg Band. Information Kessler learned on the teleconferences, he would pass on to Gibbons. For example, Kessler said that he advised Gibbons that the original property owner, Joseph Penner, said when he participated in the lease amendment program, in return for the Postal Service to take on some maintenance costs and pay taxes. For participation in the Lease Amendment Program (LAP), Penner was supposed to receive less rent and the Postal Service would adjust purchase option in the lease to fair market value. He also advised Gibbons that POA claimed to have FOIA documents in their possession that were damaging to the Postal Service's position. Kessler denied he was involved in POA's strategy sessions, but admitted that he recommended to POA that they respond to Postal Service's letter detailing their position, with their own memorandum. He also recalled that he contacted POA and told them when to submit their proposal to the Postal Service. He wanted POA to be responsive. Kessler said that after POA advised him that the Postal Service did not pay for interior maintenance on the building, he questioned Gibbons. Kessler said that Gibbons told him to call Facilities Vice President Tom Samra and meet with the Postal Service "Real Estate" (facilities) group. Samra provided evidence that the Postal Service did in fact, pay for significant maintenance of the building and POA misinformed Kessler. Kessler said that Band sent him unsolicited documents, which he had no time to review and no interest in reading. He said when Band sent him e-mails, he asked that they also send them to Gibbons. He said he also advised Gibbons when he received information from POA, however, he could not recall if he forwarded the e-mails he received from Band to Gibbons. He said that Gibbons found the information helpful, recounting an instance when he advised the Postal Service about POA's position on interior maintenance. Page 3 RESTRICTED INFORMATION This report is furnished on an official need to know basis and must be protected from dissemination which may compromise the best interests of the U.S. Postal Service Office of Inspector General. This report shall not be released in response to a Freedom of Information Act or Privacy Act request or disseminated to other parties without prior consultation with the Office of Inspector General. Unauthorized release may result in criminal prosecution. Kessler said the property owners offered him details regarding their communications with US Congressional Oversight committee staff. Kessler said he didn't advise them to go to Congress, adding that the owners are politically savvy. Kessler said he was concerned that POA would criticize the Postal Service's process to Congress. The RA asked Kessler to recount the facts of his meeting with Gibbons in July 2010, after his complaints about Samra. Kessler said that he reviewed an e-mail from Samra that he thought was insensitive. Kessler said his complaints were not about the substance or the Postal Service's position in the e-mail, it was concern about "how people deal with each other'. Kessler said he talked to Gibbons and not Samra about the e-mail. Kessler said that Samra had sent an insensitive e-mail to POA after the illness of one of their colleagues. He recalled Samra sent an e-mail "that said sorry to hear about your colleague's serious illness, then in paragraph 2, it said the Postal Service just Kessler said the e-mail was an embarrassing, inappropriate way to respond to POA. Gibbons advised Kessler to relax and said "as you've done, continue to steer clear of the issues, substance, on the process." Gibbons said "rest assured I'll stay involved" and "make sure they're communicating [and] meetings are scheduled." He said her advice was consistent with his past practice to "steer clear of the substance of the positions" and Gibbons continued to update him. Kessler recalled that he last spoke with Gibbons about Samra in November or December 2010. At that time, she provided an update on the status of a POA settlement proposal. Gibbons advised Kessler that the proposal was not acceptable, "not even close." Kessler said he didn't discuss why the proposal was unacceptable, but suggested to Gibbons that the Postal Service prepare a counter proposal. Kessler said that if they offer a counter proposal, then POA could not complain to Congress that the Postal Service did not consider their proposal. He said that Gibbons thought a counter proposal was a great idea. Kessler denied that Gibbons ever talked to him about any potential 2635 Section 702 violation (Using Public Office for Private Gain), or using his position to help Band or POA. Kessler said it was never an issue, because Gibbons understood it was not happening. Kessler was unaware that Gibbons' received a complaint about him interfering with the property dispute. Kessler said he was "just keeping parties communicating." Kessler said that Gibbons position was always "steer clear, let me (Gibbons) be the point of contact" and "That's always the way I conducted myself." Kessler said, didn't agree not to have any more personal involvement in the matter. If so, I'd have no more contact with Band and no updates with Gibbons." Kessler reiterated that Gibbons never told him (Kessler) to not be involved with the property dispute. Kessler said subsequent his meeting with Gibbons about his complaints regarding Samra's e-mail, she continued to provide him updates, through e- mail and verbally after meetings. Kessler also requested a briefing at the GSPC meeting, which Gibbons provided. Kessler reiterated I "don't recall any conversation Page 4 RESTRICTED INFORMATION This report is furnished on an official need to know basis and must be protected from dissemination which may compromise the best interests of the U.S. Postal Service Office of Inspector General. This report shall not be released in response to a Freedom of Information Act or Privacy Act request or disseminated to other parties without prior consultation with the Office of Inspector General. Unauthorized release may result in criminal prosecution. with Gibbons saying stay out, steer clear" or never still have been involved in the substance." Kessler said subsequent the July 2010 conversation with Gibbons, he had one or two calls with Gibbons' Deputy General Counsel Charles Kappler about scheduling meetings with POA, when she was away from the office on vacation. Kessler said that his concerns were that the parties were communicating, ensuring that POA received timely responses, keep the process going and communication channels open. Kessler said that don't want the perception of no negotiations or discussions, don't want them to go to the Hill staffers saying the Postal Service is wrong, not treating us well." He advised Gibbons, if they complain, "let it be about the substance and merits and not about the lack of process." The RA asked how Governor Marshall became involved in the property dispute and Kessler responded that Band told him that he had a relationship with Marshall and he was going to contact him (Marshall). Kessler said he may have given Marshall a heads up about the property dispute and Bands concerns. Kessler was asked by the RA to describe the March 2010 Postal Service teleconference he participated in and confirm that Marshall, Samra and Gibbons also participated as well. Kessler recalled participating in a maintenance teleconference, but could not recall the participants. However, he said he did not recall on the teleconference. PREPARED DATE: 4/15/2011 Page 5 RESTRICTED INFORMATION This report is fumished on an official need to know basis and must be protected from dissemination which may compromise the best interests of the U.S. Postal Service Ofiice of Inspector General. This report shall not be released in response to a Freedom of Information Act or Privacy Act request or disseminated to other parties without prior consultation with the Office of Inspector General. Unauthorized release may result in criminal prosecution. I I A A A Wiggin and Dana 1.1.9 Scott D. Corrigan 450 Lexington Avenue 212.551.2605 Suite 3800 212.490.0536 fax (mm? or: a aw New York, New York scorrigan@wiggin.com 10017-3913 VIA ELECTRONIC 8: FIRST CLASS MAIL May 4, 2011 Special Agent United States Postal Service Special Inquiries Division Office of Inspector General 1735 N. Street Arlington, VA 22209 Dear Agent I write on behalf of Doug Band andand in response to your request to interview Messrs. Band an (X7) 'n connection with a United States Postal Service Office of Inspector General administrative investigation concerning Governor Alan Kessler. I understand that the OIG is investigating Governor Kessler's conduct in relation to a property dispute between the USPS and Post Office Associates, an entity in which Mr. Band has a financial interest. That property dispute is the subject of a pending lawsuit initiated by the USPS against Post Office Associates. During our telephone convers April 28, 2011, William Keefer said that the OIG wished to interview Messrs. Band an whom Mr. Keefer characterized as witnesses, about certain communications with USPS personnel. Messrs. Band and decline your request to interview them. Given the current pending litigation between the USPS and Post Office Associates, it would be inappropriate for the OIG to interview Messrs. Band outside of the normal discovery process governing civil litigation -- in an investigation related to that litigation. That is especially true since Mr. Band's interests and the interests are adverse in the pending litigation. While Messrs. Band andecline your interview request, I take this opportunity to address an issue Mr. Keefer raised during our telephone conversation. Mr. Keefer said that you wished to as on whose behalf he sent an email to the USPS, and that it appeared that he may have sent the email on 'of William Clinton, former President of the United States. Please note that Messrs. Band and both work for President Clinton, and that their email addresses note their affiliation with the ormer president. However, while the email from was sent from his presidentclinton.com email address, did not reach out to the USPS on behalf of President Clinton. President Clinton has_ no involvement in this matter, which involves a dis - ute between the USPS and an entity in which Mr. Band has a personal financial interest. email to the USPS was sent at the direction of Mr. Band, who is supervisor. Mr. Band directed to try to arrange a telephone call with the general counsel of the USPS to discuss New Haven New Yor/e Philadelphia WIGGIN AND DANA Counsellor: at Law May 4, 2011 Page 2 an offer by Mr. Band on behalf of Post Office Associates to the USPS to settle the matter and develop the disputed project together. Finally, Mr. Band has known Governor Kessler as a friend for many years. Mr. Band believes Mr. Kessler conducts himself in accordance with the highest of ethical standards and is not aware of any improper conduct by Mr. Kessler concerning the dispute between the USPS and Post Office Associates. Please treat this letter with the same degree of confidentiality afforded the OIG's written report of its investigation. If the OIG's written report is released in response to a Freedom of Information Act request, please release this letter along with the report. From: Gibbons. Mary Anne - Washington, DC Sent: Friday, December 11, 2009 7:53 PM To: Kessler. Alan Cc: Jim Bilbray; 'Mickey D. Bamett'; 'Marshall, Thurgood, Jr}; Moore, Julie 8 - Washington, DC Subject: RE: Question on criteria used to inform the Govemors on litigation Alan, Thanks for thetfeedback on reporting to the Board. We have a process in place currently called the Complaints improvement; Project where, at the request of the Committee, we are developinga twice yearly report on thiejvarious types of from employees and customers both through formal processes J(such as EEO, court, grievances) andinforrnally (by letter, email, etc.). We are~usin'g lean six sigma methodology to identity trends, districts and areas out of the norm (either better or worse). root causes, and needed improvements. We have already made reports to The Committee ona few sets of data (EEO Complaints and NLRB charges) _and arecontinuing to review additional data sets for futurereports. Our next report will be in March. Bytheend of this hope to have analyzediall bfthe individualidata sets and to have an overall, standardized reportcovering all of thettroutinevareasof litigation. From the perspective of Board oversight of risk, the above reporting should be sufficieni. Nevertheless. if wants to see the same information as we could provide that information. Also, if GSPC wants a more lgerleral report on litigation, wegcould do a first report covering how USPS handles litigation strategically, the various types of 'litigation, overall numbers, ihistoric payouts,'pending potential liability, stepsiin place to reduce, liability, etc, Then, we couldfollow up with any specific information the Committee wants. Alternativel - ddition,we could periodically provideithe Committee a report of all pending and new cases with exposure of [The information below reflects cases assessed at $,10nm or moreejjreported on the contingent liability report to the finance staff and the extemal auditors as of the end of FY '09. We reporteeunder the GAAP rules, which require us to categorizecases as having a "ProbabIe" Iikelihoodof payout (meaning liabilityis likely), likelihood of payout (liability could go either way), or "Remote" likelihood of payout (liability not likely). Probable Reasonably Possible Remote Grievances: >$10rn -- 4 13 4 EEO Cases: 3 (Class Actions) 0 0 FLSA: 0 1 0 Torts: . 3 0 0 Business: 0 1 0 lwill separately send you an update on the Band matter. Mary Anne um 7 ibjmic) lduanemorriscom] Oriwaehalfioif Kesslerg Sent: Thursday, December 10, 2009 2:33 PM To: Moore, Julie 5- Washington, DC Cc:fGibbons, Mary Anne - Washington, Jim Bilbray; Mickey Barnett; Thurgood Marshall Subject: RE: Question on criteria used to inform the Govemors on litigation After reviewing Mary Anne's email, I must honestly say that I really don't recall too many instances of briefings on litigation, unless the litigation is somewhat extraordinary. I do think we should receive more briefings and, forthe most part, agree with the criteria Mary Anne listed although I would suggest that any litigation in which the Postal Service may be liable in excess of $10 Million, rather than $50 Million, we be briefed. on. I suggest, that we have; regular briefings atthe Strategic, Planning Comrnitteeimeeting unless' you both feel that anotlierffiommittee would be moreappropriate. In that. regard, your criteria Mary Anne, as you know, I have been contacted by the Band family regarding a real estate issue which may be somewhat troubling. I did advise Mary Anne that I know one of the members of the Band family, but otherwise have no professionalorbusiness relationship. Therefore, on that matter, I would like a follow-up briefing. Sarasota . Sent: Thursday, January 14. 2010 l0:3O AM To: Subject: FW: Sarasota From: Gibbons, Mary Anne - Washington, DC Sent: Wednesday. December 16, 2009 9:08 AM To: Cc: Kappler, Charles - Washington, DC Subject: FW: Sarasota What is the response to this? Mary Anne i@duanemorris.com] on Behalf of Kessler, Alan Sent: Tuesday, December 15, 2009 2159 PM To: Gibbons, Mary Anne - Washington, DC Subject: RE:,Sarasota Mary Anne: Thanks very much for the recent update on the Sarasota Post Office matter brought to my attention by?Mr. Band. I rnulstsay that! am still troubled somewhat by the argument regarding the?1798i] amendment. Titus; I. guess I am not surewh-lat the purpose of the fair market value option would have been, if it were; not to have.bee'n exercised and how the assumption of maintenance, utilities and taxesicompared to the reduction" the rental'. is there nocompromise available that would allow us to avoid expensive and possibly time consuming litigation'? Alan From: Gibbons, MaryaAnne-- Washington, DC Sent: Friday, December 11, 2009 3:41 PM To: Kessler, Alan cc: Moore, Julie 8 - Washington, DC Subject: FW: Sarasota Alan, Chip Kappler has provided an update on the Sarasota Post Office matter broughtto your attention by Mr. Band. Although Mr. Hurlbut, an attorney retained by Mr. Band on this matter. states in his attached letter that postal management has paidafair market value versus the much lower purchase price authorized by the lease in circumstances similar tothe Sarasota facts, postal policy would not allow for that and my staff is unaware of that as a matter of practice. Nevertheless. my staff is checking further to see if there is any truth to Mr. Hurlbuts assertions. Please let me know if you would like any additional information at this point Going forward. I will keep you posted as this progresses. Mary Anne From: Kappler, Charles - Washington, DC Sent: Friday, December 11, 2009 3:12 PM To: Gibbons, Mary Anne - Washington, DC Subject: Sarasota 1 Sarasota Mary Anne, This is to updategyou on the Sarasota Post. office purchase-optioongissue thativvas brought toour attentiongby (3overnor,Kessler. Governor Kejsslervwas concemed that this issue be handled appropriately and as a result; we contacted the the ownerswofthe building who are opposing the Postal Servicesexerciseiof its opurchasejoption. We sent*th_e_ attorney, Greg Band, a letter (copy attached) outlining our position. In response, Mr. Band called usand?l again explained our position and told him that we felt it was strong enough that we would have no basis for requesting our clients not to exerciseitheir-rights. under the lease. I told him that we don't always prefer to litigate matters, but in this case. a decision not to exercise oursrightsawould be appropriately questioned at several levels, particularly given our current financial picture. He rdidhaveusome detailed questionsabout the lease program, in general, to based on lack of -.1 "ed.Il> (A copy of her response is. attached.) The United States Attomey's office in Florida has been contacted oonceming this matter 'andiwe anticipatetthatfanfactionlwill be filed in January. Please let you have any questions regardingathis. Thanks; Chip For there at-out Uuzerze 3:42-ass: 'trig. 'i't~is s-iactmruc IS -an-:1 and as for 11:2'. of in-:9 r.-any to whom rt it you have -i'-red transmissaon l3's error, please -t to the the or any other "1 Setting; cal 5/2011 elnvestigator Quick Message View From: Kappler, Charles - Washington, DC Sent: 8/12/2010 4:10:18 Received: 8/12/2010 4:10:19 To: Gibbons, Mary Anne - Washington, DC CC: Bcc: Subject: Re: Will do. They are really pulling out all the stops on mis. Original Message From: Gibbons, Mary Anne - Washington, DC To: Kappler, Charles - Washington, DC Sent: Thu Aug 12 11:07:27 2010 Subject: Re: Handle the call--tell him I'm out of town. So that the Gov would not cross the ethics line, I told him to have the Sarasota owners contact me if they have complaints on Tom. This is likely in that category. So, tell him you are the Deputy GC, acting for me. Mary Anne Gibbons Wa Blackberry Wireless handheld device. Original Message From: Kappler, Charles - Washington, DC To: Gibbons, Mary Anne - Washington, DC Sent: Thu Aug 12 11:05:46 2010 Subject: Re: Handle setting up the meeting or handle the meeting itself? This looks like Sarasota from another angle. Original Message From: Gibbons, Mary Anne - Washington, DC To: Kappler, Charles - Washington, DC Sent: Thu Aug 12 10:56:05 2010 Subject: Fw: Please handle.. Mary Anne Gibbons Via Blackbeny Wireless handheld device. 33:5: To: ns, ary Anne - Washington, DC Sent: Thu Aug 12 10:56:01 2010 Subject: Ms. Gibbons, My name is I work for President Clinton. His Counselor, Doug Band, asked that I set up a call with you in the coming days. Please let me know of your availability. Best, Office of President Clinton 55 West 12501 Street New York, NY 10027 212.3 360 presidentclintomcom (7) Attachments: No Attachment . ThisMessae ed A William J. Clinton Foundation Contributor Information I CAREERS CLINTON CENTER . CLINTON =sDonate0nir~e Contributor Information Donate by MaiUPhone Filter: sum I Matching Gifts Planned Givi "9 $1001 to $5000 3- Contributor Information Clinton Foundation Records 1351 to 1400 of 3026 Bush-Clinton Katrina Fund Helen C. Kennedy 't 8 3 ommi men Stan Kent Millennium Network Edward Kerbs tr Internships Ruby H. Kerley *2 Volunteer i Dessie Kerr Andrew M. Kessel Alan C. Kessler Heydar Khaledi Adnan U. 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