Priority Box

Amidst all the talk of bonuses, sweetheart mortgages and micro-management at Wednesday’s oversight hearing, there was precious little discussion of the facts behind the Postal Service’s obligation to “pre-fund” its retirees’ health benefits by depositing over $5 billion a year with the US Treasury- something no other agency or corporation is required to do.

This obligation didn’t arise out of an actual concern for those retirees- it was political expediency, pure and simple. In 2001 the Office of Personnel Management determined that the USPS had been improperly overcharged for Civil Service retirement benefits.

There wasn’t any dispute about the mistake- everyone freely admitted that the USPS had overpaid. Unfortunately, giving the money back (and not continuing the overcharging in the future) would mean increasing the national debt (on paper), as well as increasing future budget deficits (also strictly on paper).

So our representatives in Congress took the only course they thought reasonable: they scrambled to come up with an excuse to not only keep the money the Treasury already had, but to keep the gravy flowing! It took time to craft a rationale, so for a while we had an undefined escrow account into which the overcharge flowed. Then someone came up with the brilliant idea of using the continuing overcharge to “pre-fund” future postal retiree health benefits. How much should the USPS should set aside for the pre-funding? Amazingly enough, the amount turned out to be just about what the CSRS overcharge would have been.

So the Treasury would still get an extra $5 billion from the USPS’s customers, decreasing (on paper) the federal deficit by that amount!

So what’s wrong with this picture? The first problem is the voodoo accounting that allows the Treasury to count the USPS contribution as revenue. The funds the USPS contributes, regardless of whether they are overcharges for CSRS retirements, or “pre-funding” of retiree health benefits, are already totally committed to paying those charges. Counting those dollars as revenue to decrease the deficit is nothing but a shell game.

Secondly, and more importantly, the USPS no longer has $5 billion in spare change to contribute to the Treasury every year- consider what will actually happen if the USPS has to contribute the required $5 billion to the “trust fund”:

- The USPS will be required to pay the Treasury $5 billion.
- The USPS doesn’t have $5 billion, so it will have to borrow the funds.
- When the USPS needs to borrow money, it borrows it from the Treasury. So it will borrow $5 billion from the Treasury that it will then loan back to the Treasury for the “trust fund”!
- But wait- there’s more! As you may have heard, the Treasury has no money either!. The US Government is operating at a deficit, and will be for the foreseeable future. So if it needs another $5 billion to loan to the postal service, so that the postal service can loan it back to the Treasury, guess what? The Treasury will have to borrow another $5 billion from China!

Which shell is your (borrowed) $5 billion under?!

If the USPS makes the RHBTF payment, it will simply be converting $5 billion in presumed future USPS obligations to an immediate $5 billion debt to the Treasury. It will also take $5 billion of the total US debt off of the federal government’s books and charge it to the USPS. It will have done nothing to insure that future retiree health benefits are actually funded.

Charles Ponzi would have been proud of this scheme!

(Fun fact- when the GAO’s Phillip Herr was asked during Wednesday’s hearing whether he could think of any other companies that were required to pre-fund employee health benefits, he proudly pointed out that the GAO does it! He didn’t mention the fact that when the GAO needs funds to do something like that, it doesn’t actually have to come up with the cash- it just asks Congress to appropriate it…)

Figures released by the US Postal Service show that the organization spent $78.4 million on relocating employees in the fiscal year that ended September 30, 2008. Of that, almost half, or $37.9 million went to “Residence Purchase and/or Sale/Lease”. The USPS home purchase program for relocated employees has been a subject of controversy since it was revealed that the USPS had spent $1.2 million to purchase the home of a South Carolina postmaster who had taken a voluntary lateral transfer to a position in Texas.

Just under $15 million of the home purchase funds money went to Headquarters and Area staff, which account for less than four thousand of the postal service’s 632,000 career employees. A similar amount went to postmasters and supervisors, who make up a much larger share, about 54,000 employees, of the workforce. Employees of the Inspection Service and the Office of the Inspector General, about 3,900 total staff. got $3.4 million in home purchase benefits, down from almost $7 million the prior year. Home purchase benefits for clerks, carriers and mail handlers came to just over three hundred thousand dollars.

GERONIMO A. CELLAMARE, age 46, a resident of Westwego, Louisiana, pled guilty in federal court today before U. S. District Judge Helen Berrigan to unlawfully detaining, delaying and opening United States mail, announced United States Attorney Jim Letten.

According to the factual basis, the defendant admitted that in September and October, 2008 he had detained and failed to deliver approximately 2950 pieces of First Class Mail, Second Class Mail, Presorted-Standard Political mail, Standard mail, and ADVO advertisement mail. All of the mail was found in his apartment on October 3, 2008 pursuant to the executio of a Federal Search Warrant by the United States Postal Service, Office of Inspector General.

CELLAMARE faces a maximum term of imprisonment of five (5) years, a fine of $250,000.00 and three (3) years of supervised release following any term of imprisonment. Judge Berrigan scheduled sentencing in this matter for July 8, 2009 at 9:00 A.M.

The case was investigated by the United States Postal Service-Office of Inspector General. The case is being prosecuted by Assistant U. S. Attorney Marvin Opotowsky.

Factual basis:

Should this matter have gone to trial, the Government would have proved, through the introduction of competent testimony and admissible tangible exhibits, the following facts, beyond a reasonable doubt, to support the allegations in the Bill of Information now pending against the defendant, GERONIMO A. CELLAMARE The defendant has agreed to plead guilty to Count One of a Bill of Information charging the defendant with a violation of Title 18, United States Code, Section 1703(a) relative to felony delay of the United States mail.

On October 3, 2008, a search warrant was executed at the residency of the defendant, GERONIMO A. CELLAMARE, located in Westwego, Louisiana, in the Eastern District of Louisiana by United States Postal Inspectors. Upon searching the defendant’s apartment, the United States Postal Inspectors found 829 pieces of First Class mail, 57 pieces of Second Class mail, 921 pieces of Presorted-Standard Political mail, 732 pieces of Standard mail, and 412 pieces of ADVO advertisement mail. The mail was seized by postal inspectors and taken to their offices.

A supervisor for the United States Postal Services, Westwego Post Office, would testify that the defendant, GERONIMO A. CELLAMARE, was a United States Postal Service Transitional Employee city letter carrier during the months of September and October, 2008.

The supervisor would testify the addresses on the mail seized from the defendant’s apartment on October 3, 2008, was United States mail assigned to him for delivery and should have been delivered by the defendant on mail routes that he was assigned to during that period of time.

Additionally, the supervisor would state all of the mail found at his apartment was addressed to more than 250 individuals, organizations, or companies who should have received this mail. The supervisor would further state all of the United States mail described above was entrusted to GERONIMO A. CELLAMARE in his capacity as a United States Postal Service letter carrier
and it should have been conveyed and delivered to the addresses stated on the mail therein without any delay. The defendant was not authorized to detain or retain any United States mail in his personal possession for any reason.

An individual will testify that he/she confronted the defendant concerning his failure to deliver the mail described above and the defendant stated to him/her that he was tired and could not deliver all his mail so he brought the mail to his apartment.

A Tucson, AZ, letter carrier walked away with only minor injuries from what could have been a life-threatening collision.

A vehicle crossed the center line on the a two-land road and struck the long-life vehicle. The estimated speed was more than 60 MPH.

The carrier was wearing a seat belt – perhaps saving her life.

The following information was released by the United States Attorney’s Office for the Southern District of Texas:

Former rural carrier associate LaNardsha Rose has been sentenced to prison for aggravated identity theft, acting United States Attorney Tim Johnson announced today.

U.S. District Court Judge Gray Miller sentenced Rose to two years imprisonment, the mandatory statutory maximum sentence today. Indicted in April 2008, Rose pleaded guilty on Dec. 8, 2008, admitting she stole mail from three customers residing along an assigned delivery route. Rose stole mail containing several boxes of personal checks addressed to two different postal customers and a MasterCard credit card destined for a third postal customer. The effected customers resided on Route 116 and Route 69 delivered out of the Copperfield Carrier Annex on Highway 6 North in Houston.

Special Agents of the U.S. Postal Service Office of Inspector General (USPS-OIG) initiated an investigation upon receiving customer complaints. As a rural carrier associate Rose was not assigned to one permanent route; however, USPS-OIG agents determined Rose had been assigned to the effected routes when the reported mail losses had occurred. In addition, Rose was captured and identified from video surveillance attempting to pass one of the customer’s stolen checks made payable to “LaNardsha Rose.” In addition, at least two other checks made payable to “LaNardsha Rose” cleared the second victim’s account. Rose’s cell phone number was also captured in connection with an inquiry seeking information about the stolen Mastercard account. Rose was later identified making several purchases using the card. She was also captured on video surveillance using the card and signing the legitimate customer’s name iIn connection with one of the purchases

“Identity theft is one of the fastest growing crimes in the United States and is a serious federal offense,” said Max Eamiguel, Executive Special Agent-in-Charge, Office of Inspector General, USPS, Southwest Field Office. “The American public trusts the Postal Service to deliver its mail intact. When a postal employee betrays that trust and steals mail, then uses stolen financial information to wreak havoc in the lives of our citizens, Special Agents of the Postal Service’s Office of Inspector General investigate. Fortunately, these incidents are not common, and the overwhelming majority of the 700,000 postal employees are honest and hard working. With the prosecutive support of the United States Attorney’s Office, we will aggressively pursue any employee committing a postal crime.”

Rose began her employment with the United States Postal Service as a rural carrier associate in December 2006. Her employment has since been terminated.

Rose will be allowed to self-surrender to the Bureau of Prisons in two weeks. In addition to the mandatory prison term, Judge Miller also imposed a one-year-term of supervised release to begin following her release from prison and further ordered she pay restitution to the victims in the amount of $1304.04.

The investigation leading to Rose’s indictment and arrest was conducted by Special Agents with USPS-OIG. The case was prosecuted by Special Assistant United States Attorney Tammie Y. Moore.

Almost daily, there are reports of more people being laid off. It seems that most of the people in charge can only see as far as creating a temporary influx of funds. By doing this, they preserve their own excessive pay and bonuses instead of anything else to preserve jobs.

The only company that seems to be run correctly is the U.S. Postal Service. Its leaders are trying many different approaches to ease the money crunch, including possibly cutting back to five days delivery instead of six, changing routes to make them more efficient and even the unpopular item of raising the cost of postage.

As far as I know, there has not been a post office layoff, thanks to the measures that the post office has been taking. I wish other company leaders would do what they are being paid for and try to preserve employees’ jobs instead of just throwing them to the wolves.

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