I Lance McDermott a USPS Employee file this Intervention for consideration in Postal Regulatory Commission’s Docket No. N2012-1, 15 December 2011.
PURPOSE: To inform the American Public about the corruption of the U.S. Postal Service and its new Mailing Industry Partners. The U.S. Postal Service has stolen the American Public’s original investment in public facilities given to it in 1970 and much more.
First, the Agency was given 30,000 post offices in 1970 that were built with Federal (Public) funds to be held in trust and if sold the money was to build new ones. The Service now only owns 8,000+/- facilities and leases 27,000+. Now forty years later, the Postal Service says it has 33,000-38,000 facilities that it reports it has. In reality, it has only 27,200 facilities that are revenue producing Post Offices. The Public is blindly footing the bill for 10,000 public facilities that are not public serving or revenue producing Post Offices. Then there is the $78 billion that was the Military Retirement stolen by the Agency and given to its Mailing Industry Partners. In 1970 when Congress gave the new Agency 30,000 public facilities to start it asked in consideration that the Agency fund the Military Retirement (Vietnam) portion. Forty years later, the Agency cried “it’s unfair” without telling how many billions of dollars postal employees paid out of their own pocket to buy-back their military time for retirement. In 2006 the fooled Congress forgave the $78 billion to put the Agency back into financial health. Five years ($15.6 billion per-year) later the Agency is crying false alligator tears giving $18 billion a-year in workshare discounts to the Mailing Industry. What happened to the Public’s original investment in the lost 22,000 Public Facilities or their Public Trust Funds (average $4 million*22,000=$88 billion)? What happened to the $78 billion in Military retirement funds given by Congress in 2006 with the promise from the Postal Service that the money would be wisely used to keep the mail moving long into the future?
Second, the U.S. Postal Service used public funds to create the Junk Mail Industry which in fact is simply advertising revenue stolen from the American Newspapers and Magazines. The American Public has suffered a double blow from the loss of many of our “Free Press” communications that Congress intended the Agency to help with not destroy. I would cite Advo/Valpak’s purchase of the Chicago News Tribune to show how much the publicly funded Junk Mail Industry has invaded our Free Press. This has also allowed the Postal Service and its marketing Partners to drown out any opposition in the “Press” with their propaganda. One part of the Mailing Industry the Credit Card (big Bankers) Companies with a Federal Agency’s “stamp of approval” (the Public’s Trust of a Federal Agency to do Good) convince the American Public that these credit card and other advertising offers through the mail must be legitimate. The Postal Service did not put in any check, balances or accountability into it’s publicly created and funded Mailing Industry. The Postal Service did not ask Congress or the American Public if it could create the Mailing Industry. The Postal Service Officials, “who could not plan their way out of a paper bag,” but with a $500 million in Public funds spent each year for advertising also gets the best “Spin Doctors” to tell its sad story of how they tried their best. This keeps any “bad press” out of the free-press receiving millions of dollars in Public Money spent by the Postal Service for advertisement. Fronted by its Mailing Industry Partners, the Postal Service is now asking Congress’s belated approval to pull the plug after they have taken a very expensive ride paid for by the American Public. The true question is, does Congress and the American Public want to give the dog the bone after it has eaten all the best meat or is there enough meat on the bone left to make soup for the Public’s trillion dollar investment?
Thirdly, and not last the Transformation and Privatization Plans of current and retired Postal Executives, Contractors, Consultants and other associate “Partners” seem to be simply take any postal product or service and its Public Funds and “privatize” it. In doing so the Postal Service created hundreds of entities like SkyPostal Network, Mail2000, Mail Express, Streamlite and Earth Class Mail using the unknowing Public’s Funds. All of which are managed by former postal executives (Stamps.com), federal contractors (Pitney Bowes Mailing Services) and consultants (Accenture). The Postal Service is using Public Funds to create nonprofits like Nation Postal Forum, Direct Marketing Association, Association of Postal Commerce and the CEO Council, to name a few. These Entities after receiving the Public’s money turn around and lobby for more so they can take another profitable chunk before throwing the scraps into the “downsizing” pile. Just compare how many closed meetings (Mailers Technical Advisory Committee), Closed contracts (FedEx), conferences (PostCom), forums (National Postal Forum), and trade shows (World Mail Awards) Postal Executives have had with their Mailing Industry Partners (paid for by the public) and how many meetings Postal Executive have had with their Employees or the Public. Every USPS Board of Governors meeting has been certified closed to the Public by approval of the USPS General Counsel since the Sunshine Act was created by Congress. A USPS BOG sitting on the Board of Washington Mutual and sitting on the Board of the National Postal Forum should say enough about any BOG’s opinion in favor of the Mailing Industry. PRC Officials long ago have stated their opinion of privatization of postal services. A PRC Commissioner created nonprofit Women In Logistics and Delivery Services (WILDS). WILDS meetings are held in PRC Headquarters and wine tasting in Law Offices representing the Mailing Industry. Members include Attorneys, Contractors, and Consultants of the Mailing Industry and other government officials from the USPS OIG, USP IS and the GAO. Consider former Inspection Service, Office of the Inspector General and the PRC Officials are on the Boards of the mailing industry companies and their opinions and testaments do not lie in the Public’s interest. These Mailing Industry companies were created with Public (Trust) Funds and their profits go to the Federal Officials and Contractors who created them not the Public. The only question an investor can ask is how much of the Mailing Industry does the American Public own for their Trillion Dollar Investment?
There is a simple analogy of the Money-Changers in the Temple. The Temple was built by the people for the people to use not the Money-Changers. The Money-Changers say they have a right to use the Temple for what they say is a better and higher public purpose which can only be both propaganda and a lie to the ones who paid for the Temple. The simple solution or test is to kick the Money-Changers out of the people’s Temple and see they can live without changing the Public’s money into their own.
Junk Mail funded by the Public is 1-2% of the Public’s waste which makes the Public pay more to have disposed-of doubling the cost to Public. In the words of Conan the Barbarian “destruction” of the Enemy and their cries of lamentation would be good to here. The American Public and their Temple, the U.S, Postal Service, was built for a meaningful free-society communication purpose has been turned into another tool of the Advertising Industry all financed by the American Public.
Thereby, I intervene to save my Federal Employee Retirement along with the unaccountable public funds stolen and wasted to create and continue to waste supporting the Junk Mail Industry which Congress and the American Public have never wanted.
Title 5 § 2635.101, Basic obligation of public service – “(11) Employees shall disclose waste, fraud, abuse, and corruption to appropriate authorities.”
5 CFR 2635.702, - “Employees must not use public office for their own private gain or for the benefit of others such as any business with which they are affiliated.”
Postmaster General Patrick R. Donahoe, 18 February 2011, Dear Colleagues, - “Over the years I have spoken often about the importance of ensuring that the Postal Service always meets the highest ethical standards and that everything we do as an organization earns the trust placed in us by the American people. Doing the right thing is a responsibility we all share collectively, and as individuals, and it is not an exaggeration to say that it is vital to our success as an organization. … At every level of the organization, we must foster an internal culture that values the person who identifies an ethical problem and finds the appropriate solution; who stops to seek guidance if a particular matter poses an ethical dilemma; and, who encourages discussion and raises awareness of the conduct we must all promote…”
PRC Docket RM2008-3, Order Establishing Rules for Complaints, Order 195, 24 March 2009, - “The Commission believes also that its enhanced authority under the PAEA may encourage more individuals to seek the Commission’s assistance in resolving their issues with the Postal Service. As a result, the proposed rules provide the mailing public with an avenue for bringing their concerns to appropriate Postal Service personnel. ... Section 3662(b) requires the Commission to make a determination as to whether the complaint raises a material issue of fact or law within 90 days after the filing of such complaint. ... The Commission understands that it may not be clear when something is the beginning, as opposed to the middle or end, of a pattern. The Commission’s goal for this provision is to identify occurrences that may indicate that a pattern is developing...” USPS OIG and the Mailing Industry - USPS Mail Processing Network Rationalization Service Changes, 2012 Docket No. N2012-1, - “The Postal Service explains that the circumstances under which it seeks this advisory opinion are explained in the Direct Testimony of David Williams on Behalf of the United States Postal Service (USPS-T-1)…”
Minutes of the USPS Mailers Technical Advisory Committee (MTAC) meeting, November 2-3, 2005, Office of Inspector General Presentation David Williams, Inspector General, - “...The investigative difference between the OIG and the U.S. Postal Inspection Service is that the OIG looks inward on employee and contactor crimes such as bribery, extortion, and conflict of interest... Mr. Williams commented that the audit arm is currently involved in the restructuring of the network operation, the resolution of some of the issues related to technology design, the development of faster and more accurate financial reports, and implementation of efficiencies in the management information systems area. There is a continual quest for the lowest combined cost (usually through work sharing) for the mutual benefit of both the USPS and its customers...”
Inspector General David C. Williams letter sent to Senator Grassley, 15 Dec 06, (OIG report #SA-OT-07-001) stated that the jurisdiction for internal criminal investigations was transferred to save money and a report of the $50 million savings was included. The IG stated that this was done because internal criminal investigations functions were not transferred in 1996 to the OIG as required by the IG Act and Congressional intent. Nothing in the IG Act grants the OIG criminal investigation authority with the added benefit of a 20-year law enforcement retirement’s high costs that are then blamed on employees as labor costs.
15th Conference on Postal and Delivery Economics, May 30 – June 2, 2007, in Semmering, Austria presented by Center for Research in Regulated Industries, Rutgers Business School. Sponsors: Royal Mail, Deutsche Post (DHL), USPS, Canada Post Corporation, FedEx, La Poste, RR Donnelley, UPS, Swiss Post, Pitney Bowes, U.S. Postal Regulatory Commission, IBM Global Business Services, and Venable LLP. SESSIONS: James I. Campbell, Jr. and Amelia Porges. “The New Legal Framework for Postal Delivery Services in Japan”; - Robert Cohen (PRC), Luigi di Paola, Renee Sheehy, & Vincenzo Visco Comandini: The Distribution of Post Offices in Italy and the United States; - Luis Jimenez, Michael Lintell, & Anna Owsiany: “Evaluating Measures of Dispersion to Explain the Unobserved Heterogeneity in Mail Volumes across Countries” Robert Reisner. Pierce Myers & Lawrence G. Buc: Postal Regulatory Reform in the U.S. – Key Issues and Measuring Results; - SERVICE QUALITY Chair: Linda A. Kingsley; - John Haldi & William J. Olson: Economic Imperatives that Drive Further De-averaging of Postal Rates; - USO II Chair: Nancy Sparks Discussants: PRC Commissioner Ruth Y. Goldway, Alberto Rovero & Vincenzo Visco-Comandini; - Michael A. Crew & Paul Kleindorfer: Regulation and the USO under Entry. RESEARCH PANEL: Chair: USPS Inspector General David Williams; Panelists: James I. Campbell, Jr.; - Stephen C. Littlechild; - Walter Maschke; - PRC Commissioner James C. Miller III, - John Panzar; - Joëlle Toledano; - Anton van der Lande and Joost Vantomme.
APWU Web News Article #108-07, Nov. 27 2007, - “APWU President William Burrus slammed the Office of the Inspector General recently, charging that in a September audit report [PDF] on employee benefit programs the office had inserted itself into the collective bargaining arena. To Inspector General David Williams, Burrus said, “Simply put, your analysis of the cost of postal benefits compared to those of other federal agencies lacks relevance.” “The statutory mandate for bargaining has been and continues to be ‘to establish and maintain wages and benefits comparable to the private sector,’” Burrus wrote, “but your analysis compared the USPS negotiated-benefit programs to six federal and five quasi-federal agencies.” The OIG comparison, the union president said, “has no standing in the bargaining process.” He noted that both the Postal Reorganization Act of 1970 and the Postal Accountability and Enhancement Act of 2006 require the Postal Service to bargain with employee unions over wages, benefits, and working conditions…. Burrus said that he was “particularly offended by the report’s claim that reductions in benefit program contributions represent ‘$1.073 billion in funds put to better use.’ “Your auditors are not positioned to arrive at such a conclusion,” he said. The APWU president also criticized the Inspector General for the OIG’s failure to address billions of dollars granted to major mailers in excessive worksharing discounts. “Despite the enormity of this loss of revenue, your office has failed to document and analyze this egregious violation of the integrity and accountability of the Postal Service.” “It is especially troubling that your office has remained silent while the USPS has failed to adjust workshare discounts to reflect the reduction of millions of work hours that resulted from automation. As you undoubtedly know, under the law, as work hours used for mail processing are reduced, the avoided costs reflected in workshare discounts must be reduced proportionally.” “Rather than producing an irrelevant comparison of postal benefit costs to those in other federal agencies,” Burrus wrote, “your office would better serve the public interest by exposing this collusion between major mailers and postal management.”
Memorandum for all OIG Staff - 16 Jan 08, Inspector General David C. Williams, - “Last year, OIG special agents conducted 8,128 investigations and arrested 817 employees and contractors for postal crimes… Administrative action was taken against 4,051 employees as a result of our efforts… long-term cost savings of over $208 million dollars as a result of our work… Our hotline received more than 80,000 contacts last year.” Compatibly the OIG Reading Room website has less than 200 audits of Postal Service Programs and Products (audits of management).
--- Note --- Out of 80,000 complaints received by the OIG only 10% were investigated. Out of 8,000 investigations 10% resulted in arrest and 50% resulted in administrative discipline. $208 million/8,128 = $25,590 saved each investigation is 6-months of pay for the average postal employee. 4,051 employees times $50,000 yearly-pay = $202,550,000. Administrative discipline can only impose a 14-day suspension or discharge so all 4,051 employees would have to be discharged for the OIG to claim $208,000,000 in cost-savings. OIG employees are paid a twice the rate of regular postal employees to do investigations so where is the $208 million cost-savings really come from? The cost of the OIG investigation plus the cost of training new employees and their pay would off-set any savings (cost more). The 72,000 complaints not investigated could have resulted in $1,842,480,000 saved. Since management is 13% of the total personnel in the Postal Service 13% of the 4,051 employees disciplined 450 should be management and of the 817 employees arrested 85 should be management. With far more Contractors and other private Postal Industry Employee (8 million) touching the mail than Postal Service Employees most of the investigations should be directed at non-postal employees or it would show that the OIG investigations and arrests are bias (discrimination). And the there is the Postal Inspection Service Law Enforcement Officers, with their 20-year retirement jacking up the labor-cost blame on employees, unlawfully (39 U.S.C. 233) conducting criminal investigations of the same employee misconduct that costs the rate-paying Public double.
If the American Public can’t trust the OIG Inspectors or Federal Law Enforcement Officers who can they trust? Their Annual Report numbers and results of audits would make any ENRON accountant blush, except that the Postal Service has hired ENRON’s former public accountant Arthur Anderson turned consultant Accenture to help cook-the-books and spew forth propaganda worthy of a Nazis-Spin Doctor.
APWU Web News Article #21-08, Feb. 28, 2008, - “APWU President William Burrus has asked USPS Inspector General David Williams to conduct an audit of the postal practice of permitting subcontractors to park trucks and store equipment on USPS property free-of-charge. The practice raises USPS operating costs and defers potential revenue, Burrus charged in a letter to the Inspector General (IG). “There is no uniform policy to determine when this added benefit will be afforded,” Burrus wrote, noting that the value of using USPS property is not considered when contracts are negotiated. He requested that the IG conduct an immediate review of the “economies and efficiencies” associated with management’s ad hoc arrangements. “The postal policy of granting this perk is significant,” Burrus explained later, “because it obscures the true cost of subcontracting.” In his letter to the IG, Burrus also charged that “the Postal Service has routinely accepted amendments increasing the costs of contracts that have been bid upon and finalized.” The practice avoids transparency in the bidding process and provides a competitive edge to the original bidder, he said. Raising the Bid, Burrus cited a 1997 contract that showed dramatic increases in cost over a short period of time, without the benefit of a competitive bid. Postal documents [PDF] reveal that just 17 days after the bid was submitted, the cost of the Phoenix AZ subcontracting agreement increased from more than $151,000 to more than $509,000; five-and-a half months later it ballooned to more than $845,000. The cost of the contract exceeded $1.098 million in November of 2000, before settling down to more than 300 percent of the original bid in 2001. Each price change was accepted and paid by the Postal Service without additional competitive bidding….. I hope the Inspector General will live up to his responsibility to investigate these matters,” he continued. “The IG has shown little enthusiasm for monitoring excessive worksharing discounts that also deprive the Postal Service of needed revenue, while displaying great interest in examining employees’ benefits and their medical records.” Burrus and the Inspector General have had sharp exchanges over these issues, and in January the APWU and the National Association of Letter Carriers filed suit against the Postal Service and the IG for systematic and widespread intrusions into the medical records of postal employees. “The Inspector General needs to adjust his priorities. I hope he will begin here,” Burrus said.”
Oral Statement on the three R’s of the Postal Network Plan: Realignment, Right-Sizing, and Responsiveness, 24 July 2008, David C. Williams, IG USPS, - “The Postal Service has used several strategies in its network realignment and each has its challenges… In the past 5 years, they have closed approximately 50 airport mail center and remote encoding centers, consolidated mail at 12 processing and distribution centers, and outsourced 13 airport mail centers… Looking to the future, the recently issued Network Plan describes the Postal Service’s vision of rationalizing its infrastructure and workforce… The Postal Service is considering improving efficiency and service in the bulk mail centers (BMC) network through outsourcing, and issued a draft request for proposal on July 1, 2008. Risks that must be addressed in this approach include reporting requirements of misconduct by contractors; work stoppages’ and conflicts of interest from contracting with parent or subsidiary companies of mailers.”
USPS OIG News Release, 14 October 2008, - “...The Postal Service OIG has ventured into the Blogosphere to become the first IG office to open up a public blog. Dipping into the toolbox of Web 2.0 applications, the OIG is blogging to reach and gather ideas from Postal Service and mailing industry stakeholders. ‘We are sponsoring this blog to facilitate an ongoing dialogue on relevant issues affecting the Postal Service. This effort will allow us to reach stakeholders for online discussions of emerging issues as well as attack chronic dilemmas with new ideas from a large number of perspectives,’ said inspector General David C. Williams... The OIG’s goal with this venture is to add further value to the USPS.”
Rutgers University’s 17th CRRI Conference on Postal and Delivery Economics, 27-30 May 2009, Bordeaux, France. Speakers: Margaret Cigno PRC and Organizing Committee: David Williams Inspector General USPS and John D. Walker, Director, Rates Analysis & Planning PRC. Attending: Gary Battaglia Pitney Bowes, Mary Davis PostCom, Gene Del Polito Association for Postal Commerce, Charles E. Fattore RR Donnelley, Paul SmithUPS. Abstract: Changing Postal Environments and the Impact on Marginal Cost, by Margaret Cigno and Diane Monaco PRC, - “...In this paper we will be using U.S. Postal Service mail processing plant data for the entire United States, we will calculate plant level average cost on both a quarterly and an annual basis. Preliminary results reveal a wide variation in average cost among plants.” “An Operational Measure of the cost of Universal Service as Cross-Subsidy” Authors: Margaret Cigno, Dianne Monaco and Edward S. Pearsall. – “In this paper we present estimates of the maximum cross-subsidy for several recent postal fiscal years. In addition we identify and characterize the properties of the regions of the U.S. that are apparent beneficiaries of the cross-subsidies.” Dr. Edward Pearsall, Operations Research Consultant with Distribution Consulting Service Inc., London. A registration fee of $1,500 is payable to Rutgers University. Statement of USPS Inspector General David C. Williams, before the Committee on Oversight and Government Reform, 15 April 2010, - “...Thirdly, we and the Postal Service, have recognized the need for a simplified, pricing structure, to replace the over 10,000 prices in their 1,700 page customer manual. A simpler pricing structure would be easier to use, encourage new customers, and improve revenue accountability... The Postal Service is being bled white with erroneous payments before they open their doors. The $7 billion mischarge accounts for 66 percent of the Postal Service’s projected $11 billion loss for this year. This is also serious because the Postal Service Pension Fund is not made of tax dollars. The two funding streams are employees’ own money and money collected from postage sales inflated as a result of this mischarge.”
May 28, 2009, CRRI Session Paul C. Smith & Paul Vogel: Transportation Outsourcing: A Team of Rivals. Papers of PRC Staff, Abstract: Transportation Outsourcing: A Team of Rivals, 5 December 2008, by Paul Vogel USPS and Paul Smith UPS. Lobbying Report, 2009, Senate ID#48144-63, Paul Smith (DBA as Policy Cons Services) United Parcel Service - $30,000, Postal Regulatory Commission. LobbyData.com, Paul Smith, Clients Served: 3, Estimated Revenues: $156,363, Years in Business: 11. Paul Vogel USPS VP Network Operations.
USPS News Link, 29 June 2010, - “As part of the Postal Service’s ongoing efforts to increase service levels, improve flexibility and speed and meet the ever-changing dynamics of the marketplace, PMG Jack Potter has announced four officer assignments within USPS Operations ... Tim Haney, David Williams, Kelly Sigmon ... Tim Haney…”
--- So is the OIG’s testimony for the Postal Service or the Mailing Industry “Partners?”
Is his testimony in the best interest of the American Public that pays his federal salary and 20-year law enforcement retirement?