February 24, 2000

Bryan Saddler, Esquire

Acting Counsel to the Inspector

General

U.S. Department of Housing and

Urban Development

Office of Inspector General

451 – 7^th Street, S.W.

Washington, D.C. 20410

Dear Bryan:

This responds to the points raised in your February 23^rd letter.

First, OIG should not require any additional assurance that the records that Hamilton designated as "non-responsive" are, in fact, non-responsive – but let me address your concerns by reiterating what we have already stated. As Hamilton’s counsel, Michael McManus and I (along with associates and paralegals) reviewed all of Hamilton’s paper records at Storch & Brenner over the course of three months. We believe that we were very broad in designating responsive documents, therefore, the non-responsive documents represent just a fraction of the total documents stored at Storch & Brenner. Your predecessor at the OIG nevertheless asked the Special Masters to "spot check" the non-responsive documents, insisting that they would find responsive documents improperly segregated, even going so far as to designate specific boxes identified by Ms. Hetherton as containing responsive documents. The Special Masters conducted that review and agreed with Hamilton’s designations on each document. It is our opinion that the non-responsive documents are just that.

Second, regarding the back-up tapes, your suggestion that this matter now be put on a fast track is inappropriate in all respects.

Third, Hamilton has not and will not pay the Special Masters’ fees for overseeing Hamilton’s use of its own documents, whether searching for duplicates or otherwise reviewing Hamilton’s records for legal, business or other purposes. These are Hamilton’s records, and Hamilton has a right to use them. The OIG always has borne the Special Masters’ expenses when Hamilton needs access to its documents because the OIG is the only party that wants the records to remain there. If the OIG no longer wants to bear those expenses, release all of the documents. Since no one from the OIG has gone to Storch & Brenner’s offices to review documents for the past five months (in fact, for the past 10 months, two OIG investigators have signed in to review documents on only two occasions), the OIG should consider whether keeping any documents there serves any legitimate purpose at this late stage. As long as they remain there, however, Hamilton will exercise its right to access its own documents, and the OIG will have to incur the Special Masters’ fees and expenses that flow from this unnecessary arrangement.

/gw

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