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Former Postal Service official accused of misconduct

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Three weeks before he announced his resignation from the board that oversees the U.S. Postal Service, Alan Kessler was accused of misconduct for pressuring postal officials to scuttle a real estate dispute involving a long-time friend.

Kessler stepped down from the Board of Governors on July 31 after 10 years of service that included a term as chairman. His departure followed a five-month investigation by the Postal Service Inspector General that found his interference with a real estate deal the agency was negotiating in Sarasota, Fla., gave the appearance of a conflict of interest.

Inspector General David C .Williams also said the Postal Service’s general counsel, Mary Anne Gibbons, failed to act swiftly enough to make sure Kessler removed himself from the case and report the conflict to investigators.

The inspector general’s office “gathered substantial evidence that Governor Kessler’s personal involvement — which continued after he was warned by the general counsel — created an appearance that he used his public office for private gain,” the 39-page report concludes. The Post obtained the report through a Freedom of Information Act request.

Kessler’s attorney, Pamela J. Marple, said in a statement that Kessler’s conduct was proper and that his role as a member of the Postal Service board required him to get involved in a range of matters involving the public.

These duties “included constant communication with Congress, the public, and other third parties,” Marple said. Kessler was not pressured to resign, she said, but his decision “was based on the escalating demands and problems of the Postal Service as well as his increasing family, professional and civic commitments.”

Postal Service spokesman David Partenheimer said the inspector general report “stands for itself” and declined further comment. The investigation was first reported by the Federal Times.

Kessler is a prominent Philadelphia attorney and one of the city’s most prominent Democratic fundraisers. He served as a member of the Clinton-Gore transition team in 1991-92 and as national finance chairman of Hillary Rodham Clinton’s presidential campaign in 2008.

The dispute centered on a post office and maintenance building in Sarasota that the Postal Service had leased for years and wanted to exercise its option to buy. The property is owned by a real estate partnership that includes Douglas Band, a prominent Florida Democrat and businessman who is close friends with Kessler, the report said.

Under the option, the property would have cost the Postal Service $825,000, significantly below its market value of $12 million, the inspector general said. The option price was determined many years ago. The Band family disputed the price, and after the parties could not reach agreement, the Justice Department filed a lawsuit last year on behalf of the Postal Service to force the owners to sell the property. The suit recently was settled.

The inspector general described Kessler as a persistent and vocal advocate for the property owners that put him in the position of acting against his own agency. He helped the owners come up with a strategy to oppose the Postal Service’s effort to purchase the property at the option price and raised his concerns with other board members, the report said.

“Governor Kessler had a fiduciary duty to the Postal Service,” the report said. “Nonetheless, he did not provide [USPS] with draft legal documents he received from Band regarding their strategy . . . On multiple occasions, he urged postal officials to settle the dispute, a result favored only by the property owners.”

The inspector general said that Kessler was advised in July 2010 by Gibbons, the Postal Service general counsel, to stop his advocacy on behalf of the Band family. But he continued to “act as an intermediary between his friend or political associates and the Postal Service,” the report said.

Even though she knew Kessler had continued to promote the interests of the property owner, Gibbons “took no further action to counsel Governor Kessler and did not refer Governor Kessler’s misconduct . . . to the office of the inspector general,” the inspector general said.

Partenheimer declined to comment on Gibbons’s role.

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