A LITTLE CORRUPTION? YOU BE THE JUDGE

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Facing a deficit of billions of dollars in recent years, the United States Postal Service (USPS) has floated a number of proposals to reduce that deficit, including selling off hundreds of post office properties in order to gain cash flow and reduce expenses. According to the Postal Service’s 2012 report to Congress, more than 600 buildings nationwide have been “earmarked for disposal,” and the “USPS Properties for Sale” web site currently lists 40 buildings and land parcels for sale across the U.S.

In 2011, the CB Richard Ellis Group (now CBRE Group, Inc.), the world’s largest commercial real estate services firm, was awarded an exclusive contract to market USPS facilities which provides CBRE with a commission of 2 to 6 percent on the sale of those properties.

This award has been the subject of some controversy, as CBRE’s Chairman of the Board is Richard C. Blum, the husband of Senator Dianne Feinstein, who represents the state of California in the U.S. Senate.

It isn’t accurate to say Richard Blum is “solely in charge” of CBRE or he “owns” the company, as CBRE is headed by President and Chief Executive Officer Robert E. Sulentic is a public company whose shares are owned by many different individuals and institutional stockholders. However, it is indeed true Richard Blum is both CBRE’s chairman and the husband of a U.S. senator, and Blum Capital, a private equity firm founded by Richard Blum, is one of CBRE’s larger institutional stockholders.

Writing in the San Francisco Chronicle, columnist Andrew S. Ross quoted a representative of Senator Feinstein as asserting she was not involved in her husband’s business dealings, and the contract between the USPS and CBRE was not initiated or influenced by Congress:

As for accusations of a conflict of interest and suspicions that Feinstein may have influenced the awarding of the contract to her husband’s firm, Feinstein’s office strongly denies the charges.

Comment: If you believe that lsat paragraph, I have a bridge to sell you in Brooklyn.