U.S. Postal Service Inspector General Karla Corcoran reportedly has launched her own investigation into the postal service’s controversial no-bid, $6.3 billion strategic alliance with FedEx Corp.
Last year, the Justice Department launched its own probe of the deal at the request of several members of Congress. A department spokesman was unable to say when the probe would be completed.
Monday the Associated Press reported that auditors from Corcoran’s office were examining the deal. At question is whether top postal officials misinformed their Board of Governors about their agreement with claims that it will save the financially ailing service more than $1 billion a year.
Although the AP report said that a spokesperson for Corcoran confirmed that auditors from Corcoran’s office were indeed reviewing the contract, it could not be independently confirmed.
Repeated telephone calls to Laura Whitaker, Corcoran’s spokeswoman, earlier today were not returned by press time. There was no immediate comment from postal officials about the report.
The genesis of Corcoran’s probe, sources said, was a complaint to postal governors by officials of air cargo carrier Emery Worldwide that alleged postal managers mislead them about the benefits of the agreement.
Last week, when he testified before the House Government Reform Committee, S. David Fineman, vice chairman of the postal board, denied that postal governors were misled about the agreement. Postal governors, he said, hired an independent consultant to review the agreement. The consultant recommended it as a good thing for the service.
Under the agreement, which becomes effective in august, the USPS will use FedEx’s large fleet of planes to transport both priority and express mail at low rates. In return, the USPS will use its letter carriers to deliver resident FedEx packages weighing up to 70 pounds, but not its overnight parcels. It also calls for the cross selling of each other’s products and services at their respective facilities.
Emery officials, who are challenging the agreement in court, claim that postal officials recently notified them that their mail transportation contracts were being canceled in favor of one with FedEx.
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