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Petitioner maintained a "Loss Prevention" manual that contained
written standards and procedures on prevention of loss associated
with the shipment of packages. Controlled parcel handling was
addressed in a specific section of the loss prevention manual.
As part of the controlled handling procedures, petitioner
performed audits in its hub, transportation, and delivery
operations to ensure security of high-value packages. Petitioner
considered these procedures to be expensive and time consuming.
c. Negotiations To Change Petitioner's Method of
Handling Excess Value Charges
Mr. Kenneth Johnson was the head of petitioner's insurance
department. After various discussions with Mr. Walter
Danielewski, petitioner's chief financial officer (CFO),
regarding the manner in which petitioner collected EVC's, Mr.
Johnson contacted the brokerage firm of Frank B. Hall (Hall).
(1) Hall
Hall was one of the largest insurance brokerage firms in the
world. Mr. Johnson had first worked with representatives at Hall
in 1981. At that time, Mr. George Corde, an experienced vice
president of Hall, worked with Mr. Johnson in connection with
insurance for petitioner's aircraft and other matters. Mr.
Thomas Garrity was a Hall vice president who worked for Mr.
Corde.
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