The U.S. Postal Service may eliminate Saturday deliveries because of financial loses. A recent federal audit reveals the Postal Service is wasting too much money. (ABCNEWS.com)
Stamp Prices Up Amid Postal Budget Bloat
W A S H I N G T O N, April 4 - Government auditors have just placed the U.S. Postal Service on its "high-risk" list, meaning that among government departments, they are most susceptible to waste, fraud and abuse.
The reason? A federal audit indicates the Postal Service wasted more than $1 billion over the last four years, Good Morning America's Consumer Correspondent Greg Hunter has learned.
Hunter tried to get an interview with Postmaster General William Henderson to discuss the auditors' findings, but Henderson would not talk to ABCNEWS.
"The postmaster is highly accountable," said USPS Senior Vice President Deborah Willhite. "He's just simply not doing an interview with you."
Congress is slated to begin hearings today to investigate problems at the Postal Service.
Postal officials say the Postal Service is a $65 billion business. Waste, and abuse are a small fraction of that total budget, they say.
Meanwhile, Americans are paying more to have their mail delivered. The Postal Service recently boosted the price of stamps by a penny, to 34 cents. Now it seeks another increase that would raise stamp prices anywhere from 3 to 5 cents. And the agency is planning to study how much it could save by ending Saturday service.
Over the past four years, government auditors have discovered that more than $1.4 billion have been wasted because of mismanagement, abuse and fraud. While the service was raising rates for first-class mail, they discovered, some managers were treating themselves to a variety of perks and bloated benefits.
The USPS Office of Inspector General found that some managers had misused chauffeur-driven cars, hundreds of times, for their personal use.
Government watchdog groups say that kind of abuse by top managers sets a bad example.
"The whole limo thing is emblematic of a whole culture of waste," says," Leslie Paige, of Citizens Against Government Waste. "[It] goes right through the Post Office from the top down."
The Postal Service has not revealed the names of the managers misusing chauffeur-driven cars. Some of them have gone to other positions, but to Willhite's knowledge, none had been fired.
Monuments to Waste
Postal service managers have also received unusually large relocation packages in some cases.
When Richard Porras, the former chief financial officer of the Postal Service, moved from Fairfax, Va., to Vienna, Va. - a distance of 15 miles - he was given $142,000. On top of that he received $25,000 for miscellaneous expenses.
Porras has since retired, but he told ABCNEWS by telephone that the expenses were approved.
The inspector general's report reveals managers at the Postal Service have also squandered millions of dollars on buildings and equipment.
In Charlottesville, Va., the Postal Service leased a building for $4.2 million for 20 years. Then it left that building empty for two years before subleasing it to a tractor supply company.
In Chicago, the construction of the main post office ended up costing $128 million more than the original budget.
In Seattle, postal officials bought a building without getting a detailed inspection. Later they discovered the building needed $23 million in repairs.
"It's outrageous," says Edward Hudgins of the Cato Institute. "If it did happen in the private sector, heads would roll, the people who wasted $23 million would be out looking for a job."
The Postal Service has also been criticized for spending $158 million in advertising for their overnight delivery services. Critics argue that the post office is a monopoly, and there is no need to advertise. The government agency even sponsors Lance Armstrong and the United States Cycling Team.
Despite criticism and big losses, postal officials have said that they will not cut their advertising budget.
"No business our size would operate without advertising to make people aware of the products they produce," Willhite said.
A Frustrated Senator
First-class mail volume is dropping, so the post office has spent and lost millions on new ventures.
It has spent $3.9 million trying to sell stamps from foreign countries. And it lost $84 million selling things like phone cards and postal clothing - everything from bike shirts to hats to socks.
Sen. Fred Thompson, R-Tenn., is frustrated at what he calls postal mismanagement.
"The post office would have broken even if they hadn't paid themselves a couple of hundred million in bonuses," he said. "And that speaks for itself."
Taxpayer groups say the government should stop giving the Postal Service money until it cuts the waste.
The Postal Service says it may lose $2 billion to$3 billion this year, prompting another stamp price increase. The agency says it has addressed some of the abuses, such as the town cars, which will not happen again.