The U.S. postmaster general and his top officials gave investigators varying accounts about the decision to allow a top executive to retain his six-figure outside corporate jobs while working full time, earning more than $230,000 as president of shipping and mailing, for the U.S. Postal Service, records show.
Newly released memos of extensive interviews conducted earlier this year by the U.S. Postal Service’s office of inspector general with Postmaster John E. Potter and other executives provide a rare look into the operations in the top reaches of the Postal Service.
The documents also suggest that executives deferred to their former top marketing officer, Robert Bernstock, even as some inside the agency began raising questions about his outside business interests.
“In the sports world, a new player with a big contract is still treated as a rookie,” said David Hendel, a lawyer at Husch Blackwell Sanders law firm in Washington, who specializes in postal contracting matters.
“Bernstock was a new player at USPS, but he wasn’t treated as a rookie. He was treated as the young phenom, the experienced coach, and the savvy general manager all in one. He was untouchable until the inspector general, acting like the commissioner, stepped in.”
Mr. Bernstock resigned earlier this year before an inspector general’s report concluded that he awarded no-bid contracts to former business associates, failed to report information on a financial disclosure form, and used Postal Service staff and resources for private business activities. The U.S. attorney’s office in Washington declined to press charges.
Mr. Bernstock declined to comment on the inspector general’s report when it was released, saying he was proud to have worked for Mr. Potter and that he’s “moved on.” According to a memo of his interview with investigators, he said he thought he was allowed to use his staff to schedule meetings, print material for outside board meetings and help with occasional travel, but was later told he couldn’t do so by USPS General Counsel Mary Anne Gibbons.
“Bernstock said he is only as good as his advisers,” investigators summed up after their interview.
The Postal Service, through a spokeswoman, said it cooperated fully with the inspector general’s office and tightened existing contract rules as a result of the report, but declined to comment on statements that executives gave to the inspector general.
The records of the inspector general’s interviews conducted with Mr. Potter, Ms. Gibbons and other top executives were recently obtained by The Washington Times through the Freedom of Information Act.
During his talk with investigators, Mr. Potter at times defended Mr. Bernstock, saying he hired him in 2008 after an extensive search because the Postal Service had become “stale,” according to an eight-page memo of Mr. Potter’s February interview. He said Mr. Bernstock had given the Postal Service a “phenomenal lift” and that he was responsible for world-class commercials and growth in the Priority Mail campaign.
He also said the hiring of Mr. Bernstock, a former top executive at Scotts Miracle-Gro and pickle manufacturer Vlasic, drew a lot of negativity, which Mr. Potter attributed to “the nature of the beast.”
When asked about Mr. Bernstock’s business associates getting postal contracts, Mr. Potter praised the contractors, saying he viewed the contractors’ skill sets as higher than what Mr. Bernstock had available at the Postal Service, records show.
“Potter added that the Postal Service ‘in general does a lot of contracting out, like in IT and programming and systems development.’ Potter said he did not believe that the Postal Service employees could keep their programming skill-sets fresh enough to compete with the private sector contractors,” the summary of his interview states.
When he hired Mr. Bernstock, Mr. Potter said, he allowed him to retain his paid, outside corporate directorships at publicly traded Nutrisystem Inc. and the Pantry Inc., which combined paid Mr. Bernstock more compensation than the $232,500 he received in his Postal Service job.