(This post is from our new blog: Unofficial Sources.)
CBRE, a giant real estate company partially owned by Sen. Dianne Feinstein’s husband, Richard Blum, is costing the U.S. Postal Service millions of dollars a year in lease overpayments, and its exclusive contract should be immediately canceled, the service’s inspector general has found.
Eyebrows rose when the USPS made the contract with CBRE in June 2011 for all real estate transactions. Blum chaired CBRE at the time; he stepped down last year, but remains a director and a major shareholder. Feinstein, D-Calif., has always denied involvement in the deal, which proved lucrative as the cash-strapped Postal Service looked to its excess real estate to finance operations.
The contract enables CBRE to market and sell properties, and conduct negotiations for leases of postal buildings. Prior to the contract, USPS negotiated leases directly with landlords. Now, CBRE often represents both the Postal Service and the landlord in negotiations, known as “dual agency transactions.”
The inspector general’s report described something akin to a shakedown, with a kickback thrown in.
Landlords have complained about CBRE demanding commission payments for negotiating the leases, under threats to otherwise discontinue them. These payments are not mandatory under CBRE’s contract, yet the landlords allege CBRE makes them appear that way. The report states that since October 2012, CBRE has collected $20.6 million in commission payments on 3,400 leases.
CBRE also reportedly tells landlords that they can “recover” commissions through increasing rent on the properties. In that sense, the Postal Service effectively pays the commissions, with CBRE collecting higher payments as the rents grow.
Lease renewals brokered by CBRE have gone up by an average of $2,792 annually, three times the average $773 annual increase for leases renegotiated by the Postal Service. Some leases have grown over 200 percent upon renewal. This translates to a potential overpayment of $38 million over the last four years. The arrangement causes “the Postal Service to pay for CBRE to negotiate against the Postal Service,” says the report.
Both Postal Service management and CBRE maintain that nothing untoward is happening. “It is standard practice for landlords to pay a commission when a broker is negotiating on behalf of a tenant — that is the how a broker is compensated,” CBRE said in a statement. However, under the contract, the firm also receives money from USPS through meeting “performance targets” for lease renewals.
The Inspector General also expressed concern about CBRE property sales. The firm controls the appraisal process without input from the Postal Service, despite a requirement to review appraisals independently. Of the 21 property sales studied, the report identified problematic appraisals on one third of them, where the data underlying the appraisals was either speculative or flawed. One building in Richmond, Virginia, which CBRE sold for $1.4 million, re-sold for $2.4 million just four months later. In one out of every four sales examined, CBRE had an existing business relationship with the property buyer. That dovetails with independent news investigations of CBRE’s sale practices.
Postal Service management disagreed with the inspector general’s recommendation to terminate the contract, or even to inform landlords that they are not required to pay CBRE commissions. They did agree to hire an independent consultant to evaluate the leasing program. They also defended CBRE’s work, saying that leases were mostly negotiated at or below market rates.
The American Postal Workers Union, currently embroiled in contract negotiations with USPS, criticized “the cozy relationship between postal management and the world’s biggest real estate company.” They also pointed out that CBRE CEO Robert Sulentic sits on the board of directors of Staples, which postal workers have boycotted for years over a public-private partnership with USPS to sell postal products at their stores. The Staples deal coincided with USPS personnel cuts and sell-offs of post offices, which are managed by CBRE.
APWU President Mark Dimondstein added in a statement, “We need to protect the USPS from corporate pirates who would plunder it.”
David Dayen is a contributing writer to Salon and a weekly columnist at The Fiscal Times. Follow him @ddayen. Email at [email protected]
Photo: Justin Sullivan/Getty Images
A THIEF will always find a way to steal – that is what they do – – look at Washington
Well, well…It’s pay back for wife’s role in the Senate’s CIA Torture Report, I think.
Part of me wonders if this has been retribution for the torture report. The other part thinks it’s probably true anyways. Another part knows Feinstein is more or less a piece of crap but also takes me back to step 1. D:
She (Feinstein) is a puppet master. I believe the appearance of her conflict with CIA is a diversion to keep people from focusing on the money her and her husband have made through her position in the Senate. Feinstein needs to be removed from office immediately!
I heard her say (I’m paraphrasing) she stuck her finger(s) in the bullet wounds of Harvey Milk when he was shot in trying to save his life and that is a bullshit LIE! This verbal diarrhea was shat during a Senate committee meeting on possible new gun restrictions after Sandy Hook. Why no one called her on the LIE is confusing to me?
Now she is trying to get her daughter to take her place in the senate after this term. This cannot happen!
The Intercept chronicles the end of the illusion of democracy in America.
The end of the illusion of democracy in America…Well said. What’s next? Let it all hang honestly in an 1984 tehnology update nightmare?
I agree, but in my estimation, the vast majority in America are either drinking the Kool-aid, or have stopped caring. Wake up America and start caring. We still have voices if only more would use them, while Free Speech still lives.
I always wonder if the russian who helped the canadian was cia navy, and part of the matiasevich crew.
I wonder if the drunk dude with the strippers was a decoil for the whole thing.
Did our government use a canadian to get a cocain crew together?
If san francisco was a vagina,
It would be a one of kind super raunchy vagina,
If that vagina would transcend into a human
and that human would stand next to diana feinstein,
that vagina would be a holly saint.
For those who havnt been in san francisco,
Sf is snoopy overpriced and every squrefoot of city concrete has been urinated on,
the city should be called new los banos, since there already is a los banos (toilet bathroom)
in the central valley california.
I also would like to refeer to that lady as schweinstein since she is on the very top of the Merovingian industrail operation cartel or Zionist.
And also a pearly moist chunk of cocaine should be called feinstein. I dont support cocaine thou because it is so Gehlen-Odessa.
I think schweinstein cartell is working right now with(i always forget that crime familie name, but it is the last familie that didnt go coorperet on the casinos in nevada, and today they own a pulp mill in reno sparks Nevada) the union represanites and legal aid out of Washoe county to go cooperate with the calofornia marijuana.
I wonder about the fallowing and it would be funny if you guys could report about a cocaine shipment that got brought into bellingham wa. in the eighties. The story is about a canadian
uge Canadian star, and I was his co-host and I was the producer. It was great. But it was only the second greatest time of my life.
What is it about smuggling that was so great?
It was about the camaraderie; somehow we managed to put together 110 guys who all loved each other. They were all family guys who had wives and children. Who all went to university, who all had brilliant abilities and who were just lovely guys… we didn’t have guns. We did $225 million worth of business over two years and I never saw a gun once. I would pick up $10 million from a stranger in the Garment district of New York City in my 34-foot motor home. I knew where to go, I’d pull up there, open my door, he’d get in and put in the suitcases full of money and we’d talk for a sec, drive around the block, drop him off, and then I’d head back to California with the money.
Are drug smugglers of your ilk a thing of the past?
Pretty much. The risks are way too high now. People get killed. They arrested all the low hanging fruit—guys like us who didn’t carry guns. I got into the business by accident. I got into it because someone turned me on to a joint in university and I liked it and I blew my tuition and my rent and my food money on pot for me and the boys. I started selling what I got on and holding a little back to keep me in weed, and that’s how I translated from a pot smoker to a pot seller and it just somehow took over my life. It took over everything about my life. It became my hobby, my habit, my job.
Brian and Otis
Did you feel like pirates?
You know it’s funny you should ask that, because here is the greatest story of them all, buddy. We are up in southeast Alaska, in a Dutch harbor called Ketchikan and a fucking parrot flies on our boat. And it stays. It stays for two years. And it is never caged. This parrot flies off of the boat and will go for an hour and a half and come back again. This is in the middle of the Bering Sea. So we called him Otis, after Otis Redding. He was a pain in the ass. He’d get on your shoulder and just start pulling your hair, pecking at and screaming in your ear. So my buddy, the chief engineer, used to put Otis in the microwave and threaten to turn it on. He never did. You know, Otis was sacred, buddy. Imagine a parrot flying onto a pirate ship. That’s unheard of. And in Alaska! This was an omen from the pirate gods. Everybody loved Otis for what he represented metaphorically and mythically. When we transferred all the stuff off our boats and the deal was complete, Otis took off and never came back.
His work was done. Once you went straight, you famously posted an ad in a Canadian paper listing your skills and talking about your experience as a dealer. You even listed the district attorney who arrested you as a reference. What kind of response did you get to that ad and what was the thinking behind it?
My prison sentence had expired and I was struggling. So I sat down and just started to write, and basically the ad came out. I phoned The Globe and Mail, Canada’s main newspaper, read the copy out to them and the guy choked—“Uhhh… I’m gonna have to get back to you.” They didn’t take it. I called the National Post and they ended up doing a front-page story on it. I got 600 responses from all over the world. Every police agency in the US wanted me to come and work for them. I got all kinds of whacky and interesting offers, including some from organ smugglers, but ultimately I ended up on a television show.
I know you’re arguing for the legalization of drugs. Do you think there’s a chance that will ever happen?
No. The facts speak so loudly, but you see we’re locked into a punitive mindset today. As the various governments around the world gain more and more control, they relinquish it with greater and greater reluctance.
It’s a depressing prognosis. Thanks very much, Brian.
No problem, buddy.
Follow Oscar on Twitter @oscarrickettnow
Brian O’Dea is winner of The Arthur Ellis Award for Best Non-fiction Crime writing, Canada, for HIGH: Confessi
I may be on the liberal side, but even so Feinstein just about tops my personal Congress shitlist. Ever since she tried to censor information about everything from bombs to methamphetamine from the Internet, she has been a definitive villain; and that’s not even getting into the surveillance issues (despite her recent posturing). As I understand it, there was a day when she and Harvey Milk were both members of the same city council, and I can’t count how many times I’ve wished that the two had been standing in opposite places the day Dan White came knocking. Indeed, as Wikipedia puts it, his murder was her publicity jump-start; so often like this it seems like villainy breeds true throughout all the ages.
I used too yoke with each usps employees i meet,
they were also going to sell usps off and privatisas it.
I told usps employess that that was facko because, now after renting the logistics out they also can run it on stocks and get a dividend out of the mail.
It just shows me how much feinstein owns california and the weed industry.
At ukiah airport the mail is contracted uot by ups and fed ex and after helloween the amout of airplanes tripple.
I hate diane feinstein and her groups there are so behind your back vs. say putin and the nightwolfs.
ITS ALL ABOUT THE MONEY…… POSTAL MGMT HAS NO RIGHT TO SELL OUR NATIONAL TREASURE POST OFFICES FROM THE NEW DEAL AREA.
THE POSTOFFICES CONTAIN ART THAT IS PRICELESS….. …
WHAT IS GOING ON…..????? ITS ALL ABOUT THE MONEY….
I just read The Constitution from cover to cover and confirmed what I had been told that the establishment of the USPS was written into that document. Therefore it should take a Constitutional amendment to privatize the USPS. When has Congress bothered lately to abide by the law of the land?
There’s nothing about bleeding the post office dry. They can get support for an amendment if they artificially make the post office unprofitable by forcing them to fund retirees not even born yet and exploit the facts that postal service needs to be provided to every person in the United States and that they can’t control their own rates. That’s what UPS SurePost is, UPS won’t waste time and money driving out to the sticks to deliver packages. Just deliver to the post office hub for artificially low rates, and make them do the last mile heavy lifting. No private company could survive the constraints placed on them. They’re actually extremely efficient, given the circumstances.
@jgreen7801-Crap, I thought I had already pulled my head out of my ass?
That knowledge failed to be stored because of my chronic cranium induced colitis!
Thanks for the education! It appears you are correct about the amendment.
Wow, that is a good example of how far our government has deviated from its mandated role…….