August 29, 2018

Two more expected

Two USPS Governors were confirmed by the Senate: Robert M. Duncan of Kentucky to fill the term expiring December 8, 2018, and David C. Williams of Illinois to fill the term expiring December 8, 2019.  This follows a period of 20 months in which the U.S. Postal Service operated without a Board of Governors.

There remain seven vacancies for Governors at USPS, but the President announced his intention to nominate two more candidates: Ron A. Bloom of New York, to be a Member of the Board of Governors of the United States Postal Service, for the remainder of a seven-year term expiring December 8, 2020; and Roman Martinez IV of Florida, to be a Member of the Board of Governors of the United States Postal Service, for the remainder of a seven-year term expiring December 8, 2024.  If the president does formally nominate these two gentlemen, they will go through the process of being vetted by the Senate Committee on Homeland Security & Governmental Affairs.  Then they will need to be confirmed by the full Senate.

Governors are critically important for several reasons.  Many important decisions are reserved for the Governors by law, including changing rates and product definitions, and hiring and removing the Postmaster General.  Equally if not more important are setting strategic leadership, making difficult decisions about growth and cost-control initiatives, and giving career management the air cover needed when risks are taken or controversial actions called for.

One clear consequence of the confirmations is that we can expect a usual CPI-capped postage increase in late January 2019.  It likely will be kicked off with a filing at the Postal Regulatory Commission in mid-October.  It appears that the average increase for each class of mail will be about 2.5 percent.

Actual rates will vary.  For example, we expect drop-shipped Marketing Mail letters, often used for fundraising by nonprofits, to go up much more than inflation for the third consecutive year.  This is due to the USPS finding that it has been overly generous in passing through its cost-savings to the mailers who do the work-sharing.  Of course, one could argue that the measured cost-saving inside USPS should be higher.

As for the policy and strategy directions the new Governors will take the USPS, one can only speculate.  We provide some biographical information below.  We also believe the President’s Task Force on the United States Postal System could have a major impact.  See our article below.

Robert M. Duncan

Robert M. (Mike) Duncan is a banker and a big deal at the Republican National Committee.

Mike Duncan is the 17th chairman of the President’s Commission on White House Fellowships. Appointed by President Donald J. Trump in 2017, Mr. Duncan leads one of America’s most prestigious programs for leadership and public service.

In addition, Mr. Duncan, a 40-year political strategist and veteran of Republican politics, served as the 60th chairman of the Republican National Committee (RNC) from 2007-2009. As RNC Chairman, he raised an unprecedented $428 million dollars and grew the donor base to 1.8 million – more donors than at any time in RNC history.

Mr. Duncan’s service in the federal government includes working in the President George H.W. Bush White House as assistant director in the Office of Public Liaison and being nominated by President George W. Bush to the Tennessee Valley Authority (TVA) board, a position to which he was unanimously confirmed by the United States Senate in March 2006. Mr. Duncan served as TVA board chairman from 2009-2010.

As an aside, Marvin Runyan was named the CEO of TVA in 1988 until he was appointed Postmaster General in 1992. According to the New York Times: “The service had been losing millions of dollars a year since 1989, but Mr. Runyon soon had it in the black. By the time he left, in 1998, it had amassed more than $1 billion in profits, with only one rise in the first-class postal rate: to 32 cents, from 29.”

Mr. Duncan and his wife Joanne live in Inez, KY where he serves as Chairman and CEO of the Inez Deposit Bank. Mr. Duncan holds degrees from Cumberland College and the University of Kentucky College of Law.

David C. Williams

David C. Williams was sworn in as the second independent Inspector General (IG) for the U.S. Postal Service on August 20, 2003. He departed the position January 28,2016. Williams was responsible for a staff of more than 1,125 employees — located in cities nationwide — that conducts independent audits and investigations for the largest civilian federal agency. The office is under the general supervision of the nine Postal Service governors and is not subject to any other Postal Service supervision.

In July 2011, Williams was appointed by the Obama administration to serve as Vice Chair on the Government Accountability and Transparency Board. The Board will develop plans to enhance transparency for federal spending and to improve methods for detecting and acting upon fraud and waste in federal programs.

Williams has served as IG for five federal agencies. He was first appointed by President George Bush to serve as IG for the U.S. Nuclear Regulatory Commission from 1989 to 1996. President William Clinton next appointed him IG for the Social Security Administration from 1996 to 1998, and then as IG for of the Department of the Treasury in 1998. In 1999, President Clinton named him as the first IG for Tax Administration of the Department of Treasury, where he directed a staff of 1,050 to detect fraud, waste and abuse. In 2001 President George W. Bush named Williams the Acting IG for HUD, while he was also serving at the Department of the Treasury.

Williams served in the U.S. Army Military Intelligence and began his civilian federal career as a special agent with the U.S. Secret Service. Williams is the recipient of the U.S. Bronze Star and the Vietnamese Medal of Honor for service in Vietnam.

A native of Illinois, Williams graduated from Southern Illinois University, Edwardsville, Ill., and received his Advanced Degree in Education and a Master’s in Education from the University of Illinois in Champaign, Ill. He also attended the U.S. Military Intelligence Academy, the Federal Law Enforcement Training Center and the U.S. Secret Service Training Academy.

Roman Martinez, IV

Roman Martinez, IV, has been an Independent Director at Cigna Corporation since July 1, 2005. Mr. Martinez was a Partner of Lehman Brothers of New York, where he served for more than thirty years. Mr. Martinez is involved in a broad spectrum of U.S. and international investment banking activities. He headed a sector of Lehman’s investment banking division from 1986 to 1989. He serves as a Member of Investment Advisory Council at Florida State Board of Administration.

Martinez serves as a Member of the Council on Foreign Relations. He serves on the Board of Governors of New York Presbyterian Healthcare System, Inc. Lehman Brothers Inc. acts and has acted as Financial Advisor. He serves as a Trustee of The New York and Presbyterian Hospital and a Director of International Rescue Committee. He served as the Managing Director of Lehman Brothers from 1978 to 2003. Mr. Martinez has been an Independent Director at Orbital ATK, Inc. (formerly known as Alliant Techsystems Inc.) since May 4, 2004 and Bacardi & Company Limited since July 2008. He served as a Director of Bacardi Limited since July, 2008.

Martinez served as a Director of GreenPoint Financial Corp. since January 2004 and Spanish Broadcasting System Inc., since November 2, 1999. He served as a Member of the Board at the Lehman Brothers division of Shearson Lehman Brothers from 1989 to 1993. Mr. Martinez is a Graduate of Boston College and also obtained an MBA Degree from The Wharton School of the University of Pennsylvania.

Martinez is currently retired and living in Palm Beach, Florida. He recently served as a personal representative in a $41 million real estate deal, representing the estate of Damon Mezzacappa (who started Lazard Freres &Co.) which is located a half-mile from President Trump’s Mar-a-Lago.

Mr. Martinez’s son, Roman Martinez V is a partner of Latham & Watkins and is a member of the firm’s Supreme Court & Appellate Practice. In 2008, he clerked for President Trump’s Supreme Court Nominee Brett Kavanaugh.

Ron A. Bloom

Ron Bloom was a senior official in the Obama Administration from February 2009 to August 2011.  This included working as the Assistant to the President for Manufacturing Policy between February 2011 and August 2011, in the Department of the Treasury as a Senior Advisor to the Secretary of the Treasury and member of the President’s Task Force on the Automotive Industry, and also as Senior Counselor to the U.S. President for Manufacturing Policy.

Ron Bloom was born to a Jewish family in New York City and raised in Swarthmore, PA.  His mother, Paula Yackira, was an educator, and his father, Joel Bloom, served 21 years as President of the Franklin Institute Science Museum.  The elder Bloom was a prime mover in the conception and development of the Mandell Futures Center, a 90,000-square-foot (8,400 m2) wing that transformed the institute “from a dusty bin of outmoded exhibits into what is probably the most advanced science museum in the world.”  A co-author of the influential ‘’Museums for a New Century: A Report of the Commission on Museums for a New Century’’, he was a president of the American Alliance of Museums (the first science museum president to serve in that capacity), chairman of the U.S. National Committee of the International Council of Museums, and founding president of the Association of Science-Technology Centers.   In 1993, the American Alliance of Museums presented him with its Award for Distinguished Service to Museums; and in 2002, the Franklin dedicated its renovated observatory as the Joel N. Bloom Observatory.

After graduating from Wesleyan University in 1977, the younger Bloom went to work first for the Jewish Labor Committee and a year later for the Service Employees International Union. After a time, however, he realized that labor unions suffered from a lack of business knowledge, so he enrolled at Harvard Business School, earning an MBA with Distinction in 1985.

Upon graduation from HBS, Bloom joined the investment banking firm of Lazard Frères & Co. At Lazard, he divided his time between mergers and acquisition, the firm’s principal business, and working with unions whose members were involved in corporate bankruptcies and restructuring transactions (a practice originated by Lazard partner Eugene Keilin).  Many of the employee-related transactions involved the steel industry—whose hourly employees were represented by the United Steelworkers (USW)—and the airline industry, where Lazard represented pilots who were members of the Airline Pilots Association (ALPA).

In 1990, Bloom joined Keilin to create their own investment banking firm, Keilin and Bloom, which specialized in representing unions and other employee groups in turnaround and restructuring situations. Representing the USW in the Canadian bankruptcy of Algoma Steel, Bloom avoided a liquidation of the company and succeeded in obtaining majority ownership for the employees in the reorganized company.

Continuing a project they began together at Lazard, Keilin and Bloom also represented the ALPA pilots at United Airlines in their attempts to acquire ownership of the company through an employee stock ownership plan. In 1994, they succeeded in obtaining a majority stake in United for the ESOP, creating one of the largest employee-owned companies in the United States.

On Labor Day, 2009 (September 7), President Obama formally introduced Bloom as the Administration’s Senior Counselor for Manufacturing Policy.  He was charged with “working closely with the National Economic Council [to] provide leadership on policy development and strategic planning for the President’s agenda to revitalize the manufacturing sector.”

In this capacity, he was instrumental in the formulation of the Administration’s Framework for Revitalizing Manufacturing (released on December 16, 2009).  The Framework underlines the critical role manufacturing plays in the U.S. economy and in the fabric of American life; it outlines the major factors that have contributed to the significant difficulties facing American manufacturers; and it describes the Administration’s efforts to address each of these factors and revitalize the manufacturing sector.

From February to August 2011, Ron Bloom served as the Assistant to the President for Manufacturing Policy at the White House.  During this time, Bloom played a key role in the agreement between the federal government and leading automakers to raise light-duty vehicle fuel economy standards to 54.5 miles per gallon by 2025.  The White House has estimated that these standards will save consumers $1.7 trillion and reduce oil consumption by an estimated 12 billion barrels.  Bloom also oversaw the launch of the Advanced Manufacturing Partnership, an initiative between industry, universities, and the federal government designed to invest in the emerging technologies that will make U.S. manufacturers more economically competitive.

On October 16, 2011, The New York Times reported, “the National Association of Letter Carriers announced that it had hired Mr. Bloom and Lazard, the financial advisory and asset management firm, to develop a strategy to revitalize the deficit-laden [U.S.] postal service”, currently facing a deficit of nearly $10 billion.  The union is looking to Mr. Bloom to help expand and explore possible solutions needed to address the service’s immediate fiscal crisis as well as a range of long-term business strategies. The national president of the union, Fredric V. Rolando, commented about Bloom and Lazard: “They have experience in analyzing large, financially complex institutions and crafting creative solutions.”