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U.S. Postal Service: First Class Bribery

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Photo Credit: AP

Photo Credit: AP

The U.S. Postal Service steered millions of dollars in contracts to companies that bribed employees or had relationships with them that violated ethics laws, according to an inspector general report released on Wednesday.

The IG identified eleven instances of employees at USPS vehicle maintenance facilities accepting bribes from contractors, receiving kickbacks for steering work to certain companies, or awarding to contracts to family members.

The report attributed many of the procurement problems to poor oversight of USPS contract awards.

“As a result, Postal Service agreements with suppliers completing vehicle repairs and maintenance are at risk of fraud, including potential conflicts of interest, bribery, and collusion,” the IG said.

More than $13 million in contracts were awarded to two companies, both owned by the same person, after he paid “cash and noncash bribes” to vehicle maintenance facility employees, the IG found.

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US Postal Service preparing for first-ever default, will miss billions in payments

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Photo credit: Gerry Dincher

The U.S. Postal Service is bracing for a first-ever default on billions in payments due to the Treasury, adding to widening uncertainty about the mail agency’s solvency as first-class letters plummet and Congress deadlocks on ways to stem the red ink.

With cash running perilously low, two legally required payments for future postal retirees’ health benefits — $5.5 billion due Wednesday, and another $5.6 billion due in September — will be left unpaid, the mail agency said Monday. Postal officials said they also are studying whether they may need to delay other obligations. In the coming months, a $1.5 billion payment is due to the Labor Department for workers compensation, which for now it expects to make, as well as millions in interest payments to the Treasury.

The defaults won’t stir any kind of catastrophe in day-to-day mail service. Post offices will stay open, mail trucks will run, employees will get paid, current retirees will get health benefits.

But a growing chorus of analysts, labor unions and business customers are troubled by continuing losses that point to deeper, longer-term financial damage, as the mail agency finds it increasingly preoccupied with staving off immediate bankruptcy while Congress delays on a postal overhaul bill.

Postmaster General Patrick Donahoe has described a “crisis of confidence” amid the mounting red ink that could lead even once-loyal customers to abandon use of the mail.

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