November 10, 2013
A former subcontractor and employee of Northrop Grumman named Beau Michaud has filed a lawsuit in the U.S. District Court of Virginia against Grumman. The Complaint claims that Grumman repeatedly gave “false reports and certifications to the USPS that materially misrepresent the speed, reliability, accuracy and efficiency of the FSS machines and that materially misrepresent the conformity of the machines to the Contract’s requirements.”
The FSS (Flats Sequencing System) machines are huge contraptions that sort catalogs, magazines, large envelopes, and newsletters. The Postal Service’s contract with Northrop Grumman to develop the FSS machines states that USPS would not pay the full amount of $874 million unless Grumman delivered 100 FSS machines meeting the performance and maintainability standards set forth in the contract.
The machines have been plagued with problems, and the Postal Service has withheld over $400 million in payments. In May 2012, Grumman filed a lawsuit against the Postal Service claiming it’s owed $180 million in extra costs it incurred because of changes made by the Postal Service while the machines were being developed. The Postal Service says Grumman owes it $341 million for losses allegedly tied to retesting costs, late delivery and other issues. Michaud’s whistleblower complaint will provide plenty of details that will probably make their way into the lawsuit between Grumman and the Postal Service.
Michaud worked on the FSS project for Northrop Grumman from January 2007 through February 2011, first as a subcontractor and then as an employee. During this time, Michaud says he witnessed Grumman’s fraud about the performance reports “and tried to stop it but was met only with resistance and retaliation.” At one point, he was summoned to a supervisor’s office and told to “mind [his] own business,” and “stop trying to undermine the program.”
Michaud’s Complaint is filled with specific details about the periodic reports of Failure Modes, Effects, and Criticality Analyses (FMECA) that Grumman was required to provide the Postal Service showing that the company was complying with the contract.
Michaud claims that he and his co-workers were told to provide a “best guess” on performance times for various operations involved with maintaining and repairing the machines. The numbers they were asked to report were essentially a fiction, then, and the workers began referring to the “measurements” as “tribal lore.”
November 6, 2013
When the Postal Service sold two historic post offices in Connecticut, there was probably a general sense that they would be protected by preservation laws. But over the past few weeks, the post offices in Fairfield and Greenwich have been totally gutted, and a good portion of the Fairfield exterior has been destroyed as well. About all that will remain of these two structures is the shell.
Maybe there wasn’t much worth preserving inside these buildings, but it still comes as a shock to see pictures like those in the slideshow. Apparently all that matters of history is the facade.
Gutted in Greenwich
The post office in Greenwich was built in 1917, and it served the community for 95 years. In May 2012, the building was sold for $15 million to Peter Malkin, a Greenwich resident who also happens to own the Empire State Building. Mr. Malkin is a trustee emeritus of the National Trust for Historic Preservation, and he apparently has a reputation for saving historic buildings.
When Malkin emerged as the buyer of the Greenwich post office back in May 2011, local officials said they were told the property would be rented by the high-end retailer Bergdorf Goodman. That deal fell through or it was a false rumor to begin with. The new tenant will be Restoration Hardware, a luxury brand in home furnishings.
Restoration Hardware describes itself as “a curator of the finest historical design the world has to offer,” so it is rather ironic that the “restoration” of the Greenwich post office has required a total gutting of the structure’s interior.
While the old Greenwich post office gets repurposed as a high-end retailer, the new post office in town is housed in a building that used to be a pet food store, for which the Postal Service pays over $21,000 a month in rent. As Evan Kalish observed on his website Going Postal, the two buildings make quite a contrast.
The historic Greenwich post office is on the National Register of Historic Places, so one might think that it would be protected, inside and out. But landmark status has turned out to mean a few more hurdles to overcome before the demolition could begin.
In September 2011, a news report said that any changes to the building would need to be approved by the state of Connecticut. According to documents filed with the Greenwich Town Clerk's office, "No construction, alteration or rehabilitation shall be undertaken or permitted to be undertaken that would affect the historic features ... without consultation with and the express permission of the Connecticut Historic Preservation and Museum Division."
Well, all that consultation took place and the plans were approved — by the town’s Planning and Zoning Commission, by the Historic District Commission, by the Architectural Review Committee, and probably by other government agencies as well. It sounds like the approval was quite enthusiastic.
According to the Greenwich Time, Donald Heller, chairman of the Planning and Zoning Commission, “lavished praise” on the planned transformation of the landmark. "I felt very good about it," Heller said after seeing a presentation of the plans. "It's just a magnificent job. Isn't it gorgeous?"
October 29, 2013
Yesterday there were several important developments in the fight over the historic Atlantic Street Station post office in Stamford, Connecticut, which closed on September 20 with only two-days’ notice to customers, just as the building was about to be sold to a Westchester developer.
The U.S. District Court issued a preliminary injunction to stop the sale of the historic building to developer Louis Cappelli, who has plans to raze a 1939 addition to the structure and build two high-rise apartment buildings. As the Court’s order explains, the Postal Service failed to do a satisfactory environmental review as required by the National Environmental Protection Act (NEPA), and therefore the sale should not go forward at this time.
The effort to block the sale of the Atlantic Street Station began on September 25 with a Complaint filed in the District Court by Stamford resident Kaysay H. Abrha, the Center for Art and Mindfulness (CAM), which wants to buy the building itself and turn it into an arts-and-education center, and the National Post Office Collaborate, which is fighting the sale of historic post offices across the country. The plaintiffs are represented by attorneys Adam Ford and Harold Hughes of the legal firm Ford & Huff, which is based in Utah. They’ve been joined in Connecticut by attorney Lawrence Grossman.
Yesterday’s decision could have far-reaching impacts. It’s not clear at this point if the ruling will become a precedent, but as the case moves forward, it may put more pressure on the Postal Service to conduct environmental impact reviews when it wants to sell a historic post office. As the Court stated yesterday in its ruling, “There is a strong public interest in ensuring that USPS complies with its NEPA obligations here and in any future sales of its other properties.”
Being held to NEPA obligations would mean more opportunities for public input into decisions over sales, more attention to what will happen to the post office after it’s sold, more transparency in the process, and more obstacles for the Postal Service to overcome before it sells a historic property.
The ruling also addressed the matter of the $1 million bond that the Postal Service was seeking. The Court determined that in this case, no bond was required at all. This was a huge victory for the plaintiffs because if such a large bond had been required and they were unable to come up with it, the whole case might have fallen apart.
The Court also issued a second ruling in favor of the Postal Service that removes the lis pendens that the plaintiffs had put on the property. The ruling on this matter may be significant because it involves the extent of judicial review in cases involving 39 USC 403(c).
In addition to these two rulings by the District Court, there was activity on the Stamford docket at the Postal Regulatory Commission. The Postal Service filed a motion to dismiss the appeal on the closing on the grounds that it was premature since the post office had closed for an emergency suspension, not a final determination. The PRC will probably dismiss the appeal, but the case raises important questions about why the post office closed in the first place, and one hopes that they will be addressed before the Commission decides what to do.
Yesterday’s ruling granting the preliminary injunction on the NEPA issue, without requiring a large bond, was a huge victory for CAM, the Collaborate, and their attorneys. The Collaborate has been fighting the sale of historic post offices across the country, from Berkeley to the Bronx, and its executive director Jacquelyn McCormick has been working tirelessly on the fight, networking impacted communities and fundraising for legal fees.
October 28, 2013
It’s not easy getting information out of the Postal Service about the properties it has sold or those it has earmarked for disposal, but thanks to investigative reporter Peter Byrne, a lot of news articles, and various other sources, there’s enough information out there to piece together a picture. Here’s what it looks like.
Overall, the Postal Service has sold at least 60 properties over the past three years, maybe as many as a hundred. It's brought in over $200 million through these sales and paid out over $3.7 million in commissions to its real estate broker, CBRE. Of the post offices that have been sold, 18 were historic buildings on or eligible for the National Register. In addition, over 40 historic post offices are currently listed for sale or under review and headed for the market place.
Investigating the sales
In its 2012 Annual Report to Congress, the Postal Service says that it “reviewed over 4,000 facilities, resulting in the identification of over 600 buildings earmarked for disposal.” When the New York Times asked for details to help with its article on historic post offices being sold, the Postal Service said the 600 buildings included leased properties and there were no plans to sell that many. The word “disposal” isn’t typically used for terminating leases, but the Postal Service wouldn’t provide any details about how the 600 broke down into leased and owned properties.
When asked to provide a list of the properties identified for disposal, the Postal Service typically refers reporters to the CBRE Properties for Sale website. This website, however, does not list all the properties for sale, and it doesn’t include those that are known to be under review for potential sale.
Investigative reporter Peter Byrne spent the better part of a year gathering information about the postal facilities that had been sold over the past couple of years. He filed several FOIA requests and had to fight with the Postal Service to get information about assessed values and other details on the sales.
It’s no surprise that the Postal Service would be less than cooperative. As Byrne’s study reveals, many of the facilities were sold at less-than-market value, and it appears that the main beneficiary of most of the sales was the Postal Service’s real estate broker, CBRE. According to the records obtained by Byrne, “The total assessed value of the CBRE's portfolio of 52 postal properties before it was sold was $232 million. CBRE sold the entire portfolio for $166 million.” Yet CBRE has made millions in commissions off these sales.
Byrne summarizes his findings in an extremely informative report entitled Going Postal: U.S. Senator Dianne Feinstein’s husband sells post offices to his friends, cheap. Byrne tells a damning story about conflicts of interest and other shenanigans involving postal officials and the real estate company run by Richard Blum, husband of Senator Dianne Feinstein. It’s well worth reading. There's a Kindle Edition available on Amazon.com, but you don't need a Kindle to read it; you can access it on any PC, Mac or tablet. There's also a good excerpt from the report in the East Bay Express, here.
Through a FOIA request, Byrne obtained a list of 52 USPS properties sold by CBRE over the past three years, and he gathered CBRE invoices for commission payments on nearly all of these properties (many of which are here). Many of the sales have been reported in the press, another key source of information about the sales.