Monday, July 5, 2010

"What About Bernstock?" And Other Tough Questions for Postal Execs

The U.S. Postal Service's failure to address some inconvenient questions will hurt its chances of winning approval for several controversial measures, including the rate increase it will request tomorrow.

The questions include "What about the Bernstock fiasco?", "Why are you offering discounts on a product that loses money?", and "Why do you hope attrition will eliminate excess employees, then discourage people from retiring?"

Various sources report that the USPS will file for unprecedented "exigent" rate increases tomorrow of roughly 5% for most mail, with even higher price hikes for such allegedly money-losing products as Periodicals and Standard flats. Along with the elimination of Saturday delivery, reversal of overpayments to a pension account, and elimination of so-called pre-funding of retiree health benefits, that will give postal officials an ambitious slate of proposals requiring Congressional or regulatory approval.

Postal executives argue that they need these rules changes because they have done all they can under current rules to get the USPS's finances into line. But it will be hard for Congress, the Postal Regulatory Commission, or the public to believe them as long as they avoid answering some tough questions. Over the next few days, Dead Tree Edition will be exploring five of these questions.

The first question is: Why was a top executive allowed to run amok, and what are you doing to prevent this kind of problem from recurring?

Bad news keeps dribbling out about Robert F. Bernstock, the former president of mailing and shipping services, in what must seem like Chinese water torture for the folks at L'Enfant Plaza. (Which is why public relations experts say that if you've got bad news, release it all at once on your own terms rather than having the news media drag it out of you bit by bit.)

First there were the no-bid contracts to Bernstock's cronies, then the use of his Postal Service staff to conduct private business, and most recently the revelation that top postal officials looked the other way as Bernstock broke the rules.

In a pickle
Noting Bernstock's checkered history, Brian Sheehan at postalnews blog recently questioned why the Postal Service even hired him in the first place. (Answer: The Postal Service was in a pickle, so why not hire a guy who used to run a pickle company?)

Even the worst-case scenario is that the money Bernstock wasted would not cover one day of the Postal Service's losses (or its interest-free loans to the federal government that are euphemistically called prepaid retiree health benefits). But the incident certainly doesn't inspire confidence in Postal Service management.

There's a limit to what postal executives can say without running the risk of slandering Bernstock or violating his privacy. They did at least overhaul their contracting rules recently.

But they need to go further to put the incident behind them. They should openly discuss the mistakes they made, reiterate that no one in the organization is exempt from rules or oversight, and reveal whether the USPS got its money's worth from the no-bid contracts.

For related articles, please see:
Tomorrow: Is the Flats Sequencing System a boondoggle?


    Anonymous said...

    Why are there so many rumors when top managers of the postal service disappear. You hear things about them stealing and then retiring without charges ever being least we know about Mr. Bernstock!

    Anonymous said...

    that one is easy to answer.

    The Postal Service's top attorney, Mary Anne Gibbons, told investigators she thought there were two sets of rules governing the so-called "de minimis" policies on the use of postal equipment for outside activities: one rule for hourly employees and another for executive employees...

    if this person believes there are two sets of rules then there must be two sets of rules!!!!

    Anonymous said...

    I would lovw to see someone pin Potter's ass to the wall for answers. Then get rid of him.

    Anonymous said...

    At the very least Mary Anne Gibbons has got to go! She "thought" there were 2 sets of rules? Why didn't she check after Bernstock made his admissions? This is the USPS' top attorney?

    Also, what did Potter know and when did he know it?

    Anonymous said...

    havent you ever heard of the golden rule he who has the gold make the rules

    Anonymous said...

    There is a Code of Conduct that is suppose to apply to all employees. ELM 660. I have seen many employees prosecuted for far less $ amounts. Why does the Postal System still fund the OIG and not Congress? Why is their budget not funded totally by Congress? Maybe when the OIG is totally independent of the USPS,(funding not billed back to the USPS) there will not be a problem with holding senior management to the same accountability as the rest of the working employees and prosecution will be the same regardless where you stand on the employee ladder. The seperate set of standards started with PMG Marvin Runyon and Loren Smith and has been an accepted way of business since then for Senior Managers.(HDQ)