U.S. GOVERNMENT PRINTING OFFICE

67–997 DTP WASHINGTON : 2001

THE U.S. POSTAL SERVICE AND POSTAL INSPECTION SERVICE: MARKET COMPETITION AND

LAW ENFORCEMENT IN CONFLICT?

HEARING

BEFORE THE

SUBCOMMITTEE ON THE POSTAL SERVICE

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

JULY 25, 2000

Serial No. 106–169

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

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Internet: bookstore.gpo.gov Phone: (202) 512–1800 Fax: (202) 512–2250

Mail: Stop SSOP, Washington, D.C. 20402–0001

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

BOB BARR, Georgia

DAN MILLER, Florida

ASA HUTCHINSON, Arkansas

LEE TERRY, Nebraska

JUDY BIGGERT, Illinois

GREG WALDEN, Oregon

DOUG OSE, California

PAUL RYAN, Wisconsin

HELEN CHENOWETH-HAGE, Idaho

DAVID VITTER, Louisiana

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

CHAKA FATTAH, Pennsylvania

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

HAROLD E. FORD, JR., Tennessee

JANICE D. SCHAKOWSKY, Illinois

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

DAVID A. KASS, Deputy Counsel and Parliamentarian

ROBERT A. BRIGGS, Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON THE POSTAL SERVICE

JOHN M. MCHUGH, New York, Chairman

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

BENJAMIN A. GILMAN, New York

STEVEN C. LATOURETTE, Ohio

DAN MILLER, Florida

CHAKA FATTAH, Pennsylvania

MAJOR R. OWENS, New York

DANNY K. DAVIS, Illinois

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

ROBERT TAUB, Staff Director

JANE HATCHERSON, Professional Staff Member

MATTHEW BATT, Clerk

DENISE WILSON, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on July 25, 2000 ............................................................................... 1

Statement of:

Campbell, James I., Jr., attorney, Postal Policy Scholar .............................. 34

Gallo, Richard J., national president of the Federal Law Enforcement

Officers Association [FLEOA], accompanied by Gary L. Eager, FLEOA

agency president, U.S. Postal Inspection Service ....................................... 74

Nolan, John, Deputy Postmaster General, accompanied by Kenneth C.

Weaver, Chief Postal Inspector .................................................................... 28

Letters, statements, et cetera, submitted for the record by:

Campbell, James I., Jr., attorney, Postal Policy Scholar, prepared statement of ........................................................................................................... 37

Eager, Gary L., FLEOA agency president, U.S. Postal Inspection Service,

prepared statement of ................................................................................... 76

McHugh, Hon. John M., a Representative in Congress from the State

of New York:

Followup questions and responses ........................................................... 102

Letter dated December 3, 1999 ................................................................ 4

Nolan, John, Deputy Postmaster General, accompanied by Kenneth C.

Weaver, Chief Postal Inspector, prepared statement of ............................ 30

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THE U.S. POSTAL SERVICE AND POSTAL INSPECTION SERVICE: MARKET COMPETITION

AND LAW ENFORCEMENT IN CONFLICT?

TUESDAY, JULY 25, 2000

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON THE POSTAL SERVICE,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 1 p.m., in room

2247, Rayburn House Office Building, Hon. John M. McHugh

(chairman of the subcommittee) presiding.

Present: Representatives McHugh, LaTourette, and Fattah.

Staff present: Tom Sharkey, Loren Sciurba, Jane Hatcherson,

Heea Vazirani-Fales, Matthew Batt, clerk; Robert Taub, Dan Moll,

deputy staff director, full committee; Earley Green, Denise Wilson,

and Neil Snyder.

Mr. MCHUGH. Good afternoon. The hearing will come to order.

On behalf of all of us here on the subcommittee, I want to welcome you and thank you for being here as we continue our oversight agenda of the 106th Congress.

In 1970, the Postal Reorganization Act redefined the Postal Service as an independent, self-sufficient establishment of the executive

branch. Under this new regime, the Postal Service was to become

more business-like in its structure and operations, although I happen to believe, as most of you are, I am sure, aware, that after 30

years the time has come for additional reforms of the 1970 act. I

think, by most reasonable measures, it has been and remains a

success.

The Postal Service has improved its service and efficiency, it is

no longer supported by the taxpayer, and it has diversified its operations; however, the Postal Service is not a private corporation. It

is still very much a part of the Federal Government, and, as it continues its competitive mission, questions arise as to how much of

its Federal power should be employed in market competition.

Of all the trappings of government still held by the Postal Service, perhaps one of the most potent is its authority over the Postal

Inspection Service. For over 200 years, postal inspectors have ensured the sanctity of the seal and have done so incredibly well by

enforcing Federal statutes that protect the mail, Postal employees,

customers, and assets.

In this capacity, the Inspection Service plays a major role in a

wide range of law enforcement activities. The Inspection Service

does a fine job, but there is a potential for conflict of interest beVerDate 11-MAY-2000 11:17 Feb 12, 2001 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\67997.TXT HGOVREF1 PsN: HGOVREF1
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tween Postal management’s need to generate revenue and the Inspection Service’s mission to enforce the law.

I first raised these concerns to the Justice Department in 1998

when it was proposed that the Attorney General delegate authority

to the Postal Service to investigate violations of various wire and

electronic communications laws. I questioned if perhaps this constituted an unfair competitive advantage in the area of electronic

commerce.

The Department’s response of December 3, 1999, contains some

interesting observations and raised even more questions. The letter

states that, although the Department believes the Attorney General’s delegation of the authority was appropriate, some basic questions about the relationship of the Inspection Service to the Postal

Service remain.

We have made the letter available today for inclusion in the

hearing record, but I would like to quote just one section this afternoon, and I would ask unanimous consent to include the entire correspondence as part of the record, and without objection that will

be done.

Quoting now,

Fundamental questions about the Federal identity of the position need to be addressed if there is to be any reconciliation of law and policy. The drafters of the

Postal Reorganization Act of 1971 apparently did not contemplate the Postal Service’s emergence as a profit-motivated business and did no provide safeguards

against the possibility of conflicts between the Postal Service’s goals in managing

the Inspection Service and the law enforcement goals of the Federal Government.

Current law also does not address problems of disparity in the Federal criminal

justice system’s handling of crimes against the Postal Service and crimes against

its private sector competitors.

Since the date of this letter, the Postal Service has stepped up

its e-commerce initiatives and has touted the security of the Inspection Service as a feature that sets its products apart from those

of its private competitors. It is no doubt true that the Inspection

Service affords valuable protection for consumers, but this sort of

marketing raises concerns among private competitors who do not

enjoy the luxury of an in-house Federal law enforcement agency.

We would never imagine giving Microsoft law enforcement authority over their e-commerce products, for example. Some also suggest

we should question the wisdom of giving the Postal Service that

same power.

Control over the Inspection Service also raises questions about

the continued effectiveness of law enforcement. The Inspection

Service is directed by Postal management and reliant upon Postal

revenue. Although the Postal Service is financially secure today,

the Postmaster General has warned us in this subcommittee that

lean times will soon arrive. If this comes to pass, the Postal Service

may not be able to adequately fund the Inspection Service, and,

even when funds are available, the very fact that the Postal Service

has a financial interest in the priorities of the Inspection Service

can raise the perception that such priorities are not driven solely

by law enforcement concerns.

The conflict of interest exists, and we must decide what, if anything, should be done about it. Some solutions have already been

proposed. For instance, Congress could enact legislation transferring the Inspection Service to another executive agency with law

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enforcement responsibility. Others suggest that the Inspection

Service jurisdiction shall either be greatly expanded to equally protect private postal delivery and express services or radically reduced to cover those laws directly related to the Postal monopoly.

I want to emphasize that the purpose of today’s hearing is not

to take the Inspection Service away from the Postal Service, although that is an option that has been proposed. Our objective

today is simply to explore in the light of day the relationship between the Postal Service’s competitive agenda and the Inspection

Service’s law enforcement mission.

It is my hope that this will be a first step in an open policy discussion on what I believe is a very serious issue, and I thank you

all for being here today.

With that, I would be happy to yield to the distinguished gentleman from the great State of Philadelphia—great State of Philadelphia? Well, may be—a place I am looking toward visiting in the

next several days. The ranking member, Mr. Fattah.

[The information referred to follows:]

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Mr. FATTAH. The location of our first Postmaster General and

first Post Office as a country, Philadelphia.

Let me welcome our panelists, and particularly I would like to

welcome both the Deputy Postmaster General and Kenneth Weaver, who has recently been appointed as the chief postal inspector.

This hearing is an important one. I think the subject matter, as

outlined by the chairman, is one appropriately right for comment,

and it is true that there are competitive features to the Postal

Service of today.

I would also say, however, there are many areas in which the

Postal Service is not does have competition, and that it has as its

responsibility to provide universal service and to over 40,000 post

offices around the country. In those areas it is not a matter of a

competition that drives the Postal Service but public service.

I want to welcome you all here today. I look forward to your comments.

Thank you.

Mr. MCHUGH. I thank the gentleman, as always, for his participation and his support and leadership.

We are also pleased to be joined today by the gentleman from the

great State of Ohio, who has been one of the more active members

of the subcommittee on these issues, and we are pleased that he

is here and I would be happy to yield to Mr. LaTourette if he has

any opening comments.

Mr. LATOURETTE. I don’t have any opening comments. I am looking forward to the hearing and I appreciate the opportunity to

speak.

Mr. MCHUGH. I thank the gentleman.

Most of you are aware that the full committee procedure and

rules requires all witnesses to be administered an oath, so if you

gentlemen would be so kind as to stand and raise your right hands

and answer after me.

[Witnesses sworn.]

Mr. MCHUGH. The record will show that all members at the front

table, all five, answered the oath in the affirmative.

With that, let me formally introduce and welcome our panel

members today.

We’re honored and pleased to have Mr. John Nolan, who is Deputy Postmaster General, and who is accompanied by Mr. Kenneth

Weaver, who is the chief postal inspector.

Gentlemen, welcome. Thank you for being here.

Next we have Mr. James Campbell, Jr., an attorney, a scholar,

postal policy scholar particularly. If any of you doubt that, I suggest you may want to pick up his testimony and read it in its entirety, as I did, and I think you will agree that he is fully deserving

of that title.

We are also honored to be joined today by Mr. Richard Gallo,

who is national president of FLEOA, the Federal Law Enforcement

Officers Association, and he is accompanied by Mr. Gary Eager,

FLEOA agency president, the U.S. Postal Inspection Service.

Gentlemen, thank you. Mr. Eager, particularly, we appreciate all

the effort and cooperation you have given to this subcommittee on

a wide range of issues, and this one included.

We are looking forward to all of your testimony.

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I have, as I mentioned, read the testimony. As you know, we do

try to ask the witnesses, to the best of their ability, to summarize

that for presentation here. Without objection, all of your testimony

will be entered into the record in its entirety, and we look forward

to your comments.

With that, perhaps we should proceed as we introduced.

Mr. Nolan, thank you, again, for being here.

STATEMENT OF JOHN NOLAN, DEPUTY POSTMASTER GENERAL, ACCOMPANIED BY KENNETH C. WEAVER, CHIEF POSTAL INSPECTOR

Mr. NOLAN. Thank you, Mr. Chairman.

The Postal Service and the mail system have been important to

the growth and prosperity of this country. The growth and development of the Nation’s mail system are inextricably interwoven with

that of the Postal Inspection Service. As such, it is difficult to envision a Postal Service that does not include the fundamental Inspection Service function as it existed in one or more forms for most

of our history.

We find ourselves, to a certain extent, the victims of our own success in carrying out the legal mandate to maintain Inspection Service to ensure the sanctity of the mail and the security of our employees. We believe that success is, in sizable part, a direct result

of the historic integration of Inspection Service operations into the

fabric of the Postal Service.

Trust in the USPS and the Inspection Service was not decreed

as part of the law. It occurred over time, as the result of a lot of

hard work. Inspectors live and breathe the mail. They understand

the workings of the mail system and the interplay of its parts as

no other security or law enforcement agency could, yet they maintain an independence of operation that is essential to carry out its

mission.

Now, some feel that the success that the American people and

our employees benefit from causes the Postal Service to have an

unfair advantage in the commercial marketplace. We believe the

major benefit of the Inspection Service lies not in the marketplace

but in its support of congressional oversight for the mail and universal service. From consumer child to child pornography to physical security of property, personnel, and the mail, the Inspection

Service has been an effective agent for ensuring that the will of the

Congress and the American people is reflected in the conduct of the

Nation’s mail service, and mailers pay all the cost to maintain this

function.

As communications in this country expand into a new medium

called the Internet, the Postal Inspection Service is ensuring that

the same protection of Postal property and operations and the same

trust and the sanctity of information entrusted to the Postal Service is maintained. To do less would be a disservice to the people

of this country, in our opinion.

The issue of most importance is not competition, it’s the privacy,

security, and trust in the way Americans are able to communicate

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through their Postal system. The current structure and operation

of the Postal Inspection Service helps make that requirement a reality.

Mr. MCHUGH. Thank you very much. We appreciate that and appreciate your comments.

[The prepared statement of Mr. Nolan follows:]

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Mr. MCHUGH. Mr. Weaver, the agenda does not call for you to

make a formal statement. I think you are aware of that. But we

appreciate your being here and I’m sure there will be questions

that we would want you to respond to. And even if we don’t, you

should.

Mr. WEAVER. Thank you.

Mr. MCHUGH. OK. Great. We’ll get back to you.

I think it would be wisest to just proceed through all of the opening statements and then we can just open to general questions.

With that, Jim Campbell would be next, sir.

STATEMENT OF JAMES I. CAMPBELL, JR., ATTORNEY, POSTAL

POLICY SCHOLAR

Mr. CAMPBELL. Thank you, Mr. Chairman and members of the

subcommittee. Thank you for your kind remarks, Mr. Chairman,

probably uncalled for, but anybody who struggled through the footnotes is entitled to say his piece.

As you know, I have been counsel to the private express companies for about 25 years, almost since they first started. In my statement I tried to give you a sense of how, from a private express

standpoint, we have looked at the activities of the Inspection Service as they affect us.

In my statement, I make a couple of introductory comments,

which I’d like to emphasize.

First, to the extent that there are any problems identified, I don’t

feel that the cause lies in the administration of the Inspection

Service itself. In my personal experience, I’ve never had an instance in which I felt the inspectors were acting in an unreasonable or unfair or improper manner. I think that the cause lies more

within the institutional framework in which they operate, as I’ve

tried to make clear in my statement.

Second, I am very well aware that enforcement of the monopoly

is not the main task of the Inspection Service; that the Inspection

Service has maintained the security of the mails for, as you said,

200 years; and that this is a public service that we have all benefited from. I wouldn’t want my statement to suggest otherwise.

What I’ve tried to do in our statement is to give you some of the

details of the history of our relationship with the Inspection Service

over the last 25 years, but also the benefit of the legal research

that we’ve necessarily done to try to understand what’s going on.

That’s why all the footnotes.

As nearly as I can tell, the search and seizure power—and that’s

what we’re talking about, use of Government power here against

private competitors—that power was given to the Post Office Department in 1872, almost certainly without debate and without any

clear intent.

As nearly as I can tell, the administration of this power vis-a-vis

private competitors was not a major issue, was not a controversial

issue, all the way through the life of the Post Office Department,

that is through 1970. There are very, very few cases, very little

controversy that I’ve discovered.

The real problem arises in the 1974 Postal monopoly regulations

which were adopted by the Postal Service and which really were

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different in kind from anything the Post Office Department had

done.

Now, as I was writing this statement, I did not really intend to

focus on these regulations, but the more I got into it and the more

I thought about all this past history that I remember, the more I

realized that really it was those regulations that put the Inspection

Service in the business of harassing customers of private express

companies, for two reasons.

First, those regulations take such a complicated view of the monopoly that the regulations depend upon administrative enforcement for their effectiveness, and hence the Inspection Service has

to enforce.

Second, the regulations, by their nature, are very intimidating,

very coercive. They basically tell mailers, ‘‘You have to cooperate

with the Inspection Service, regardless of what you think is reasonable, regardless of what you think the law is, or you may face some

serious consequence,’’ and so mailers have cooperated, much more,

perhaps, than they wanted to.

I certainly won’t go through it, but if you look back at the history

of what has gone on—and I could give you much more documentation if you wish—but if you look at the history of the last 25 years

I think it is fair to say that the investigative powers of the Postal

Service have been used in a manner which intrudes upon the mailers and the customers of private express companies to a greater degree than Congress envisioned or probably authorized.

I think it is fair to say that effect of this has been to work

against what, at least in retrospect, was sound public policy—a certain desirable level of competition.

I think that there is, nonetheless, some merit in the position argued by the Postal Service that, after all, the Postal Service is only

using the tools given them by Congress to do the job that Congress

has mandated. They have protected revenue and universal service.

I think that really what is implied by this history is a need for

Congress to clarify some of the aspects of the institutional framework of the Postal Service, and I have four suggestions.

One is that the monopoly is far too complicated today. It would

be highly desirable to simplify the monopoly so it does not depend

upon so much administrative enforcement. And this is not so difficult. Many other countries have done so. H.R. 22 has a proposal

along these lines that would pretty much do it.

Second, I think that the enforcement of the monopoly ought not

to be committed to somebody that has a commercial interest. This

is just fundamental fairness. I think that enforcement of the monopoly could be committed to the Department of Justice. I know

Treasury is another possibility. But somebody other than the Postal Service, itself.

Now, this could be done either by taking this small function out

of the Postal Service or by moving the Inspection Service. I have

no particular opinion on that, but I think that the Postal Service

ought not to be enforcing the monopoly.

Third, I think that the administration of the monopoly—that is

to say the rulemaking power—ought not to be handled by the Postal Service, either. I think that with a simplification of the monopoly

you have much less need for rulemaking, for administration, but,

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nonetheless, the residual function ought to be handled by somebody

impartial. The Rate Commission is the obvious candidate. Justice

is another possibility. FTC is even a possibility. But somebody

other than an interested commercial body.

And then, last, you raised a point in your opening statement

which is a problem that has emerged over the past couple of years.

To some degree there seems to be a potential for the Postal Service

they say, ‘‘Our exclusive access to the Inspection Service, to the police power of the United States, gives us a commercial advantage.

We have the only really secure e-mail because our e-mail is protected by the Inspection Service. We have the only really secure

parcel service,’’ or whatever it might be. That would seem to be, obviously, inappropriate. The enforcement authority of the United

States should not be a commercial chip.

Resolving that problem is not so easy. I have no simple answers

to that. As you mentioned in your statement, you might commit the

Inspection Service to the job of watching all letters and parcels and

moving them to another agency. You might limit the authority of

the Inspection Service to just deal with the noncompetitive aspects

of the Postal Service’s business. I think this is a matter that does

deserve some attention. It is a matter that is of some concern to

private express companies. But, as I said, I have no simple ready

solution.

Thank you, sir.

Mr. MCHUGH. Thank you very much, Jim.

[The prepared statement of Mr. Campbell follows:]

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Mr. MCHUGH. We next have Mr. Richard Gallo, president of

FLEOA.

Mr. Gallo.

STATEMENT OF RICHARD J. GALLO, NATIONAL PRESIDENT OF

THE FEDERAL LAW ENFORCEMENT OFFICERS ASSOCIATION

[FLEOA], ACCOMPANIED BY GARY L. EAGER, FLEOA AGENCY

PRESIDENT, U.S. POSTAL INSPECTION SERVICE

Mr. GALLO. Gary Eager will be reading our statement.

Mr. MCHUGH. OK, whose statement will be read by Mr. Eager.

Mr. Eager.

Mr. EAGER. Thank you, Mr. Chairman and distinguished members of the subcommittee. We appreciate being invited here to discuss various aspects of the Postal Inspection Service and the direction that we feel it is taking, discussing the potential of moving the

Inspection Service to another branch of the executive branch of

Government.

FLEOA believes any type of move to the executive branch of Government, we should factor in the direction the Service is taking

today and the competitive aspect of complaints that are generated

by other companies that were in an unfair advantage.

We believe that right now, in terms of where we are headed, that

the Inspection Service is having some difficulty in obtaining the resources, both fiscal and personnel resources, to accomplish our mission. And, of course, our membership is very sensitive to the—I

would refer them to allegations of unfair competition, which

FLEOA would see as crime prevention and just doing our job that

has been vested with us.

Since the Postal Reorganization Act, technology and competition

has advanced such that the Postal Service is changing. They are

in a quasi business environment, which is requiring them to deal

with monetary issues, and, based on statements made recently by

our Postmaster General, were having projections of reduced revenue, and, as such, the Postal Service is having to look at areas, like

any business, to cut overhead.

FLEOA feels that sometimes it appears that the Inspection Service is being seen as overhead. Examples of that would be our lab

personnel. Our lab personnel have been trying to get pay comparability since, I believe, 1995, and it was recently denied by the

Postal Service, and, as you can imagine, our crime labs are our

very foundation for some of our investigative efforts.

Prosecutors don’t care about the internal politics within the Postal Service and the competition. They want lab results to proceed

with prosecution.

In addition to that, our allocation of resources has come into

question in that we have not had a significant increase in resources

since 1975. I believe we had 1,700 inspectors in 1975, and today

we have an authorized complement, I believe, of approximately

1,900. When you look at our complement and the way they are allocated, it creates some concern for FLEOA in that we don’t know—

I mean, there has not been a level of service study done since 1994.

The only thing that we can say about our complement is it is merely a historical number, and that is a great concern.

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When the OIG was established, some of those resources were actually pushed over to the IG, but this was done, again, without a

level of service review to see what was needed.

I wrote the chairman of the Board of Governors a letter back in

March 1999 expressing our concern that resources would be diverted to the IG at the detriment of our public service obligations,

and I received a response back that this was not going to happen

when, in fact, we believe it did happen.

Those are concerns with regard to resources and the perception

that we feel like sometimes we are being dealt with as overhead

and it is at the detriment of the public.

The Inspection Service exists—goes back to our very history,

sanctity of the mail, and that is our primary task. When we question how resources are being allocated or do we have enough to do

our jobs, it comes in—it becomes questionable when we haven’t had

a level of service review for that many years.

An example of that would be our mail fraud program where we

have had a reduction of approximately 25 percent commitment

from 1992 to 1999. There are other agencies working mail fraud,

and as well they should, but that doesn’t diminish our responsibility to be aggressive in that area.

Last, I’d like to say that, you know, in discussing moving us to

the executive branch of Government, FLEOA believes that this

issue obviously should be debated, but that privatization or moving

us to the executive branch of Government with the Postal Service

moving toward privatization—every time I read the paper, I read

where they say we are having a reform or privatization, but there

is no mention of the future of the Inspection Service, and I submit

that the Inspection Service has a role, has always had a role, and

will have a law enforcement role in the future.

The sanctity of the mail and an individual’s privacy should not

be done away with because of privatization. We can maintain a

mail stream and enforce the laws that we currently have. If anything, we should expand our jurisdiction to incorporate that, possibly with other carriers in the Postal system in the future. It is

a concern.

We don’t have all the answers, but we see ourselves going down

a road and our future looks, you know, questionable.

I have no answers with regard to competitors or—we, as Postal

inspectors, have no competitors. We are just simply cops trying to

do our job and our public service role.

Thank you.

Mr. MCHUGH. Thank you, Mr. Eager.

[The prepared statement of Mr. Eager follows:]

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Mr. MCHUGH. Rather than start a line of questioning, as I predicted the votes have been called. We have one 15-minute and two

5-minute votes, so if you can bear with us, we will try to return

as quickly as possible.

We will stand in adjournment until return.

[Recess.]

Mr. MCHUGH. With the permission from the minority, we will

begin to get into the question period. I appreciate all of your patience.

When I first looked at this issue, I kind of felt like the Sunday

night dinners where I’d look down on my plate and there would be

a nice helping of mashed potatoes and next to it would be Harvard

beets. Some of it seems very palatable and others of it less so. But

I think we need to talk about the framework that exists today, and

I would start with Mr. Eager.

To what extent does the administrative side of the Postal Service

work with you folks to define where you ought to be directing your

objectives?

You mentioned in your testimony a 25 percent cut since, I believe

you said, 1992 on the allocations directed toward mail fraud. To

some of us that seems like an ill-advised or perhaps inappropriate

reallocation of resources. Do you get to discuss that with Mr. Nolan

and others as to how you can best allocate what, in a Government

setting, is always going to be limited resources, Mr. Eager?

Mr. EAGER. I would think that would be more appropriate for

Chief Weaver to answer.

Mr. MCHUGH. I’ll get to him.

Mr. EAGER. We don’t—as FLEOA, we don’t discuss resources at

all with management in terms of what is needed.

Mr. MCHUGH. Well, if I may, I don’t mean to interrupt you, but

let’s take away the resource question, the dollars. That’s a budgetary activity and that’s an administrative function. But do you

talk about the categories of your oversight responsibilities? You

know, ‘‘We ought to be looking more over here rather than here,’’

and that kind of thing.

Mr. EAGER. Well, it appears, like I said, that our history, instead

of an allocation of resources—we had a level of service review in

1994 to look at the placement of Postal inspectors throughout the

country and basically what they would work, but in essence this

was merely a reallocation of resources. It was a very closed universe as to applying resources to where they should go.

What we believe is sorely needed is a current level of service review to take in demographics, crime rates, volume of mail, number

of employees, and examine that to determine a baseline for the

number of people we need in certain cities.

Mr. MCHUGH. Did you feel the 1994 review, forgetting the limited resources—I understand your point there—but, given the

available resources, was it a fair review and an effective one?

Mr. EAGER. Yes. It was based on the tools they were given, because they knew—I believe, this is my opinion, that they went into

it knowing it was merely a reallocation. It was just—and there had

been a trend of a lot of the hours going toward revenue protection

during that period of time under the previous administration.

Mr. MCHUGH. OK.

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Mr. Weaver, at the suggestion of Mr. Eager, which I think was

a sound one, to what extent are you provided the opportunity to

work with Mr. Nolan or others to talk about that allocation of resources and where you are directing your attention?

Mr. WEAVER. I thank Mr. Eager for referring that, but we have

ongoing discussions about where we are directing our resources,

but, for the most part, once we have an established budget we determine where to prioritize our work and where to allocate those

resources.

It is true that between the years of 1992 and 1999 there was a

reduction of hours devoted to our fraud work, but I think you need

to take a look at more than just the raw numbers to determine

what happened. It did not mean that we de-emphasized our fraud

work, and it certainly didn’t mean that we did not accomplish the

work that we set out to do, because I think our results are pretty

impressive in the fraud area. But what it did mean was that each

year we have to prioritize our work and devote our resources where

the action is, and that could change from year to year.

During that span of time, as you are probably well aware, Mr.

Chairman, we had some situations happen in the Postal Service

where we had to divert resources, maybe from our fraud work,

things like assaults and violence in the Postal Service, which was

very important.

So there are elements like that that come into play. There’s also

elements like working on inter-agency task forces, where we find

it is more beneficial to work with other agencies than merely taking out on our own and working certain investigations, and that

may result in a reduction of hours, too.

The fact of the matter is that during this timeframe our work

hours have increased over that time period from about 5 million

work hours to 5.2 million, so there has been a shift in hours from

within our work.

Mr. MCHUGH. Fair enough.

The case has been made by those who feel very strongly that the

Service is being inappropriately directed that, in fact, more and

more of the Inspection Service work has been directed, and I suspect, if it’s true, not by the Service, itself, but directed toward revenue assurance. In fact, I believe I just heard Mr. Eager say that

one of the outcomes of the 1994 review was to emphasize that.

There may be good reason for that.

Do you agree with that assessment that that has happened factually, No. 1? And, No. 2, if it has, doesn’t that call into question the

utilization of the Service for a purpose that may not be a No. 1 priority in terms of preserving the seal, as we say?

Mr. WEAVER. As far as whether I agree that there was a shift,

there was a re-distribution toward revenue protection, and to some

degree that is valid, to where we look at the protection of the revenue and the assets of the organization. I think that is what we are

entrusted to do, so to that extent there was.

We also have to look at the time period that we’re talking about.

During that time period, the Inspection Service was also performing the role of the Inspector General and was performing audits

and audit-related activities, so I think some of the work that was

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done in the revenue assurance area was a mere extension of that

audit work that we performed.

Since then, at least since I have taken over the organization, I

am dedicated to refocusing our mission and refocusing our efforts

to what our mission is, and that’s protection of the employees and

assets and ensuring that the American people have confidence in

using the mail system.

Mr. MCHUGH. And I appreciate that, and I want to underscore

right here nothing in this hearing is in any way intended to call

into question your abilities. In fact, I would note that in the full

testimony of FLEOA they, I think very appropriately and right at

the onset of their testimony, their full written testimony, attest to

your professionalism and support, your approach, so I commend

you for that.

Mr. Nolan, obviously I’d like to have you respond to the conversation we just had, but if you look at the budget allocations for the

Inspection Service since that review in 1994 in its entirety, I think

it is fair to say that the budget increases have been incremental,

I suspect mostly a reflection of pay adjustments.

You heard the comment from Mr. Eager that he has concerns

that the administration views the Inspection Service—I believe the

phrase he used was ‘‘overhead.’’ Would you care to respond to that

and why, in an era when you definitely have the Postal Service

into new endeavors like e-commerce, that I don’t happen to personally believe is any way inappropriate, why we haven’t seen a commensurate inspection of the Inspection Service, and, in fact, the

current plan calls for diminution of another 125 agents and such.

What’s the rationale behind all of that?

Mr. NOLAN. Well, there’s a couple of things that come together

here. No. 1, the 125 agents deal with audit work, which has now

been transferred to the Inspector General’s function, so that work

that was done by the Inspection Service now will be done by the

Inspector General, so there’s a—that’s really a separate issue.

I think that, when it comes to resources in the Inspection Service, the Postal Service has had lean times before. When you are

structured to break even, almost every year is a lean year, and we

feel very strongly that the mission of the Postal Service and the

need to maintain security is paramount.

As Ken Weaver said, we don’t control what the Inspection Service works on. They do what they feel they need to do to accomplish

that mission.

I think some of the numbers that were raised before are a little

bit off. In the 1970’s it was said there were 1,700 Postal inspectors,

now there’s about 2,100 Postal inspectors, so that growth of 20 percent is certainly a reasonable growth, given the fact that the number of employees that we’ve got has certainly not grown that much

during that period.

I think that the—from the standpoint of management, the Inspection Service needs to be independent in the way it operates,

meaning that it needs to make its decisions about where it needs

to put its emphasis, and that shouldn’t be done by management

dictating and is not done that way.

I think that the key thing, though, is that their involvement in

every aspect of the Postal Service to know where to place their emVerDate 11-MAY-2000 11:17 Feb 12, 2001 Jkt 000000 PO 00000 Frm 00090 Fmt 6633 Sfmt 6633 C:\DOCS\67997.TXT HGOVREF1 PsN: HGOVREF1
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phasis to be most successful is the key thing, and that’s where the

current structure, I think, serves us so well.

Mr. MCHUGH. Thank you.

Mr. MCHUGH. Jim Campbell, the point I was trying to explore

here is that any time you’ve got an activity like the Postal Service

it seems, if not just logical, absolutely essential that there be a

level of coordination between the administrative function and what

they perceive to be the shortcomings, the challenges, and the direction of, in this case, the Inspection Service.

To what extent do you think that’s important, No. 1, and, No. 2,

when you have a proposal, as we do several, to move it to another

agency, whether it be Treasury or whatever, Justice, is that not— that coordinated effort not lost? And is that a problem?

Mr. CAMPBELL. Well, from the standpoint of the private companies, we don’t want to see, of course, the Inspection Service being

used as a commercial tool—that is, as part of commercial policy;

that we don’t want to see coordination for commercial ends.

As I say in the statement, we did notice—we didn’t know why— but we did notice in 1992 or 1993, an increase in visits by Postal

Inspectors the private express companies.

Maybe this, in fact, was a result of the 1992 review. I don’t know.

Mr. MCHUGH. There was a 1994 review, though.

Mr. CAMPBELL. There was a review—— Mr. MCHUGH. Maybe they were getting ready for it.

Mr. CAMPBELL. Well, I don’t know. You’re talking about larger

issues that I certainly can’t comment on—— Mr. MCHUGH. Yes.

Mr. CAMPBELL [continuing]. In terms of commercial policy, certainly, we would not like to see such a coordination.

Mr. MCHUGH. You say for commercial interest.

Mr. CAMPBELL. Yes.

Mr. MCHUGH. When you say that to me, I’m thinking the ad that

was used that, in fact, very directly touted the fact that the Postal

Service’s e-commerce initiative does have the Inspection Service

guarantee, if you will, behind it. That’s one thing. Are there other

phases of that that concern you for commercial purposes?

Mr. CAMPBELL. You know, people forget what happened not too

long ago, but in the mid-1970’s—I remember it very well—the express companies were just struggling entities. They were just starting out. And there’s no question that the Postal Service was afraid

of the express companies and tried to stop them from developing,

and the Inspection Service was very active, and it was presumably

coordinated all the way up to Mr. Bolger, but I don’t know the details of internal Postal management meetings. I just don’t know,

but that’s a serious matter.

Now, the express companies are today big and successful and it

is not so much of a threat, but e-commerce is another new developing area. You surely would not want to see that sort of use of the

police power to stop a new industry.

Mr. MCHUGH. Yes.

Mr. Nolan, do you want to respond to that?

Mr. NOLAN. I’d find it very hard for anyone to believe that the

Postal Service was highly successful in killing the industry that we

are supposed to have been attacking. United Parcel Service made

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$700 million last quarter. So if we set out to do it, we did a very

poor job of it.

I think the fact is that, in conjunction with audits in the past,

there were identifications of areas where, whether it is in revenue

protection or monopoly, that the Inspection Service emphasized.

That is not part of their role at this point in time.

It has been shifted. The audit function has been shifted to the

IG. At its peak, we had two people in the country that were involved in monopoly related issues.

The fact is that we did not have an appreciable impact on that

industry. The fact is we are not trying to kill the Internet industry

for the competition. This is not about competition. This is about effective law enforcement.

When we—in our ads for e-commerce, what we are touting is the

fact that the same trust and security that you have with the mail

you would have with the Postal Service on the Internet. We’re not

touting Federal agency. We’re not touting the Inspection Service.

To the extent that people feel strongly that by doing business with

us they are dealing with a secure agency, I think we ought to be

congratulated for that. But we are not touting the fact that it is

the Inspection Service.

We feel there are a lot of technical issues involved in security.

We also feel that there are laws and policies that we have that private companies don’t have that are as important, in some respects,

as the Inspection Service role in those areas.

Frankly, we don’t sell lists. We have been maintaining for this

Nation names and addresses of people who move forever. People

know they can trust us in that space.

I think that the issue here really, though, is not—for us in the

Inspection Service it is not competition, it is effective law enforcement.

Mr. MCHUGH. Yes. Jim.

Mr. CAMPBELL. I just want to clarify one point. I certainly did not

mean to imply that the Postal Service is doing to anybody what

they were trying to do to us in the late 1970’s. I have no reason

to think so. It’s simply a danger that you should learn from history.

That’s all.

Mr. MCHUGH. I understand. Thank you.

The gentleman from Ohio, Mr. LaTourette.

Mr. LATOURETTE. Thank you, Mr. Chairman.

Mr. Nolan, just to followup on your last answer, isn’t it implicit,

though, in that kind of advertisement that you’re almost saying

that your stuff is safe? I mean, that’s what you want people to believe, that your stuff is safe. And you don’t say necessarily that others aren’t safe, but implicit in that statement is why is your stuff

safe, and isn’t it safe because of the ability of the Postal Service

to rely on Federal law enforcement powers to ensure its safety,

which you don’t have to say ‘‘Inspection Service,’’ but isn’t that implicit in that observation?

Mr. NOLAN. Well, I think—what I hope will be—what is implicit

in that whole thing is a range of things. Part of it is that people

know that we’re not going to sell lists, unlike other companies that

are doing this for profit, or when they go out of business the last

thing they do is to sell the list to someone else. So I think we imply

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a lot of things by those ads, but basically what we are saying is,

‘‘Whatever causes you, as an individual, to feel good about dealing

with the Postal Service, you can continue to feel good about the

Postal Service because we’re there.’’

Mr. LATOURETTE. OK.

Mr. Campbell, in his opening statement Chairman McHugh referenced a letter that was written by Deputy Attorney General Mr.

Raben, who is well known to the full committee because of his work

on other matters recently, but in the second page of that letter—

I just want to read you an observation that he makes and invite

your comment on it relative your written testimony that talks

about maybe some of the competitive problems. The specific quote

is, ‘‘Current law also does not address problems of disparity in the

Federal criminal justice system’s handling of crimes against the

Postal Service and crimes against its private sector competitors.’’

I think that’s the one argument, I suppose, that he’s making.

Others make the argument that, well, if a crime is committed via

a private parcel service, you have access to police officers, you have

access to internal security measures, you have access to the courts.

Is there any observation that you would like to make relative to

Mr. Raben’s comment?

Mr. CAMPBELL. I think that the Department of Justice has put

their finger on the problem, but I don’t know how bad the problem

is. I do think it is true, if you read through title 18 of the U.S.

Code, you’ll see that there are lots of laws that protect the Postal

Service, the property of the Postal Service, the employees of the

Postal Service, that don’t apply to private companies.

The position of the private companies certainly would be that,

where the Postal Service competes with a private company, these

laws should apply equally to everybody. It is just a simple matter

of principle. It is not that the Postal Service should be less protected, but the safety of a FedEx or UPS driver is no less important

than the safety of a Postal Service worker. That’s simply their position.

H.R. 22, as you know, provided for an overall review by—I think

it wound up the FTC in the last version—of the laws to just identify these differences for Congress to make a judgment on. I think

it is a good idea.

Mr. LATOURETTE. Thank you.

Mr. Nolan, I have a couple of questions that don’t relate to the

specific topic of this hearing, but they are of concern to some of the

folks in Ohio relative to our State law relative to charitable mail

versus the Postal Service’s rules and regulations, and specifically

Ohio is one of, I think, 12 or 13 States that has a requirement that

people involved in mail solicitations for charity—one, we require

you have a professional fund raiser, and, two, there needs to be a

contract in place between the charity that seeks to do it saying that

they’re going to get some money back. The fear is that these solicitations go out and none of the dough comes back to the charity,

and so we have a particular problem with—everybody likes police

work and police athletic leagues, for instance, but when you peel

back the onion we find out none of the money goes to any kids or

police agencies.

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Is that a problem that you are familiar with, the disparity between the Postal Service regulations in that regard and potential

conflict with State laws?

Mr. NOLAN. I, personally, am not. I’m sorry.

Mr. LATOURETTE. OK.

Mr. NOLAN. But we can certainly research that and get back to

you on it.

Mr. LATOURETTE. That’s what I was going to ask you, to not hog

up the purpose of this hearing. If I gave you a couple of questions

in writing, could you get back to me on that?

Mr. NOLAN. Absolutely. Immediately.

Mr. LATOURETTE. Thank you, Mr. Chairman.

Mr. MCHUGH. I thank the gentleman.

Inappropriate—the word is in the eye of the beholder, oftentimes,

kind of like beauty, and we’ve heard that word quite often here

today.

Let me ask Jim Campbell, in your opinion, do you believe that

the Postal Service has the legal authority to regulate in areas in

which it also competes?

Mr. CAMPBELL. No.

Mr. MCHUGH. You do not?

Mr. CAMPBELL. But they exercise that authority.

Mr. MCHUGH. Pardon me?

Mr. CAMPBELL. But they exercise that authority, nonetheless.

Mr. MCHUGH. Well, yes, obviously.

Mr. CAMPBELL. That is to say, the Postal Service monopoly regulations tell the private express companies, ‘‘You have to charge at

least so much.’’ They have a certain set of rules about how you conduct the business. There are provisions about how you have to open

your books to inspectors. There are provisions that provide that if

you do not abide by the regulations they can, in essence, suspend

your right to operate—that is, withdraw the administrative suspension with respect to a given private express company or a given

customer. So, in essence, it is price and entry regulation.

Do I think that Congress ever gave them that authority? No, I

don’t. The Postal Service bases their claim to that authority—the

suspension power—on a 1864 law which is now 39 U.S.C. 601b, I

think that if you go back and look at the history of that law, it is

perfectly clear that they do not have such authority.

Now, this has never been tested in court, so it is a difference of

opinion, but that’s certainly my opinion.

Mr. MCHUGH. Well, that’s what we ask for.

Let me ask you another opinion. Given what you just said, do

you think there is any legal validation in their activities on e-commerce and on a competitive product as represented in the MOU

that was executed between the Inspection Service, the FBI, and the

Secret Service? Does that fill the gap, in your opinion, at least in

that area?

Mr. CAMPBELL. Mr. Chairman, what I have to say about 601b

and the suspension power is the result of a lot of time in the library, and some of it in the archives of the United States. I have

not spent so much time on the e-commerce memo of the Attorney

General. I know what you’re talking about, but I just don’t know

enough about it to really make a comment.

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Mr. MCHUGH. Fair enough.

Mr. Nolan, do you want to respond to your illegal behavior, alleged?

Mr. NOLAN. I think we are very legal. I, obviously, I think what

Jim Campbell said is right, there is a difference of opinion there.

I do think that we are focusing on an area where the Postal Service, as I said, spends typically less than one person a year working

on. It is not a major activity that we undertake to monitoring the

private express statutes. Private express statutes do not pertain to

the Internet, so I don’t think that’s particularly relevant.

I do think that what we’re trying to do on the Internet is offer

choice, offer—and in that choice, a lot of features. But we’re not

trying to set standards. We’re not trying to preclude competition.

We’re trying to satisfy customers and maintain the viability so we

can maintain our universal service.

I think it is—some of the issues that related to the private express statutes and hard copy mail and the couriers we could probably debate forever, but I don’t think it is relevant to the issue that

we’re facing with e-commerce and I don’t think it is an issue that

is an ongoing issue for the Postal Service and any industry right

now because we’re not actively enforcing it. We don’t have problems in that area.

Mr. CAMPBELL. Mr. Chairman, excuse me, but I really have to

comment on this at one point.

So far as I can determine—and I certainly have not made a systematic study—it is true that the Postal Service has not been

spending a lot of resources enforcing the Postal monopoly regulations since 1994, since the Postmaster General made that statement to the Senate committee. However, that is not what is going

on in real life.

What is going on in real life is that the postal monopoly regulations are Federal regulations that are embodied in the Code of Federal Regulations, and that has a real effect on people.

If you go to a businessman and say, ‘‘I have a very good service

and I would like to offer you this delivery service,’’ and the business checks the Code of Federal Regulations and it says I can’t do

this service legally, and that chills the business significantly. Very

large businesses are affected by that.

The fact that the Postal Service does not make a lot of calls on

customers doesn’t change the fact that those regulations affect

business. And if the regulations are not meant to be enforced, they

should be withdrawn. If they are not legal, they should be withdrawn.

Those regulations are a serious problem.

Mr. NOLAN. And I think that the chairman knows our feelings,

as his, that the laws governing the Postal Service need to be

changed. We need Postal reform.

I don’t think that anyone, in their wildest dreams, would say

that the Postal Service is on the advantageous end of an unlevel

playing field, given the restrictions that we have. I don’t think anyone would trade places with us with the restrictions that we have.

I think that, to maintain universal service at reasonable prices

and recognizing what is going on in the industry and throughout

the country and the world, change needs to occur.

92

I think it is dangerous, though, to start picking out individual

bits and pieces of that, and I think it makes more sense to do the

kind of thing which you have undertaken, which is to look at the

whole system to try and see what changes need to occur.

So we’re not protestors for no change. In fact, we want change.

But in this particular issue I think picking out one individual piece

of that is just not an acceptable way of approaching it.

Mr. MCHUGH. Yes. And I fully understand that. If I thought we

could win, we’d have a vote on the broader issue today, but I can

still count.

Mr. NOLAN. You get the yellow jersey.

Mr. MCHUGH. Yes. But, nevertheless, with full respect of what

you say about picking, the purpose of the hearing is to do just that,

and we’re going to continue a little bit further, if we may.

Jim Campbell made a series of suggestions, some of which have

been supported in advance by others—for example, narrowing of

the monopoly to serve as a way by which to take care of some of

these competitive concerns.

Mr. Eager, how would FLEOA respond to a suggestion, a proposal to narrow the monopoly and contain yourselves to that function?

Mr. EAGER. Well, Mr. Chairman, we sit back and we hear everyone talking about privatization in the future, and we are a law enforcement agency, and our memberships are Federal agents. The

very root of what we do is arrest people and pursue prosecution of

people that violate statutes from the Postal laws.

When we hear talk of monopoly or this and that, what our concern really goes back to is the sanctity of the mail, the very root

of the reason we exist.

We are attached to a quasi-business/quasi-Government entity.

The Inspection Service is Government, was meant to be Government, but yet when I hear the conversation from the business aspect of it, it has very little law enforcement meaning to me.

Mr. MCHUGH. Yes.

Mr. EAGER. But I do know what the intent was when we were

formed by our forefathers, and if they were here today they would

tell all of us that anyone should be able to mail something and

there should be an expectation of privacy, and if it is taken, someone should get them.

Mr. MCHUGH. How would you react to the polar opposite of that

proposal, and instead see your jurisdiction expanded to cover the

private side of the equation, as well?

Mr. EAGER. I think time is going to take care of that. I think

Congress, I think the way the Postal Service moves in the future,

technology, competition, I think it is going to move us in that area.

At some point there will probably have to be consideration to move

us under the executive branch of Government, again taking the

route back that people have an expectation of privacy in their mail.

And I believe I said earlier, if it does move toward privatization

or reform, that shouldn’t negate our responsibility to the public to

make sure that privatization doesn’t interfere with their expectation of privacy.

Mr. GALLO. And, Mr. Chairman, if I could just mention——

Mr. MCHUGH. Mr. Gallo.

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Mr. GALLO. Thank you. The Deputy Postmaster General was

mentioning how they have to break even at the end of the year.

Federal law enforcement sometimes doesn’t break even. We are not

a profitmaking organization. If it takes several million dollars to

track someone down, that’s what it takes. That’s what is done.

These guys, these Postal inspectors, the Feds, they’re cops, and

sometimes law enforcement is not a profitmaking industry. It is not

meant to be.

Mr. MCHUGH. Yes.

Mr. EAGER. And, Mr. Chairman, we’re concerned about the nuts

and bolts of things, such as our lab. They are a very integral part

of the Inspection Service, and the fact that we have been trying to

achieve pay comparability for them since 1995 and that was denied—I understand there was an IG report that came out. I haven’t

read the report, but I believe it recommended it and that it was

denied without what I believe to be consideration of that report.

What we’re talking about here are forensic people that are instrumental in some of our investigations, and we are losing—we

could potentially lose a lot of people from this, and they are hard

to replace. That’s a nuts and bolts law enforcement decision. It’s

not overhead. When we cut that, it hurts our agency, and FLEOA

feels that way very strongly.

Mr. MCHUGH. I believe you also make the claim that the pay disparity severely restricts your ability to both attract and retain

those positions.

Mr. EAGER. Yes, sir.

Mr. MCHUGH. Mr. Nolan, do you want to respond to that? If you

choose not to——

Mr. NOLAN. No, that’s fine. That’s fine. Both the chief inspector

and I agree that the inability to make a final decision on that has

gone on too long. There has been no denial of—in a final form of

that request for modification to the pay structure. There are still

meetings taking place. The next meeting is scheduled for August

9th. It needs to be resolved. There are some knotty technical problems that we have been trying to work through. We need to do

that. We need to work through them, and we’re going to make sure

that that happens, but there has been no final denial. The labs are

a very important part of our operation, and sometimes people with

best intentions get involved in little nitty-gritty details and fail to

see the big picture. I think we need to get to that big picture and

solve it.

Mr. MCHUGH. OK. Let me return to my original question to Mr.

Eager.

How would you respond to an action that would either limit the

Postal Inspection Service to investigations by narrowing the monopoly, or, second, to take the opposite track, and that is to expand

their jurisdiction and to include the private sector companies.

Mr. NOLAN. Well, the Inspection Service needs to make sure that

people follow the law. If the law changes, then the work that the

Inspection Service would do would change. So, to the extent that

there is a law on the books, we need to enforce the law.

The fact is that attacking the monopoly issue has not been a

major emphasis for the Inspection Service. How that monopoly law

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might change and, therefore, what the Inspection Service might do

I can’t say.

When it comes to expanding the Inspection Service to cover private enterprises, my concern with that is one of scale and one of

familiarity.

Part of the reason why the Inspection Service is so successful is

that they live and breathe this stuff every day. They are part of

everything we do. They are in every meeting that we hold. They

understand what is going on. We don’t direct their activities, but

knowing what is going on in our organization makes them a lot

more effective.

To now increase that span of control over areas where we are not

as familiar I think does nothing to enhance our abilities to do our

current job and could undermine that and may not make us the

best people in the world to take on that new responsibility.

Again, we fund our own security and Inspection Service activities. Those are not funded in the private sector. With increased law

enforcement activities of some nature—and, again, I don’t recommend it be ours—would there come some increased regulation of

those private companies. Who can say? And I’m not sure that they

would be particularly thrilled with that.

So I think that the whole thing would need to be examined, but

for us to expand our role I don’t think would enhance our current

success and our current mission, and I’m not sure that we would

be the best people in that other space.

Mr. MCHUGH. Mr. Weaver, do you agree with that?

Mr. WEAVER. Yes, Mr. Chairman, I do agree with it. And, as far

as our role goes, you go back to the law and the fact that under

title 39 we have been charged with a mission, and that mission has

been unswerving. To expand our authority—again, I agree with the

Deputy Postmaster General that we would lose focus, we would

lose what was intended to—what our intended goal and mission

was. And I just don’t think it would be good for the Postal Service

or it would be in the best interest of the American people to do

that.

Mr. MCHUGH. Mr. Nolan, I’ve got just one quick question. I am

detecting a lack of enticement on your part that to move the Postal

Inspection Service to the Treasury Department or Justice would

produce almost half a billion dollars in budgetary savings. This is

so important that that’s not an issue?

Mr. NOLAN. Well, first of all, I think it is so important that it

is absolutely a completely small issue for us, compared to the importance of maintaining the trust and carrying out the mission that

we have, so I do think it is a very small issue.

I also don’t think it is a good idea to throw additional costs on

the taxpayers because the Treasury obviously or the Federal Trade

Commission or whoever is going to want money to support those

activities of an Inspection Service, and I think the current model

that says that you’ve got to pay what you get, pay for what you

get, is not a bad one. But I do think for us it is a completely secondary issue, and second is way out of the ball park compared to

the first one, and that’s the sanctity of mail, the protection of our

employees. It is not a budgetary issue to us.

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Mr. MCHUGH. What about containing the Inspection Service to

pursuing questions that are related only to non-competitive products? I mean, after all the core of this discussion and those who

seem to be concerned about it focuses on the issue of the Postal

Service’s ability to market the Inspection Service in the competitive

area as a value-added kind of asset.

Mr. NOLAN. Again, I am being very careful to make sure that our

organization does not market the Inspection Service as the reason

why we have trust.

Mr. MCHUGH. But, if I may, but you did make a suggestion in

a public ad that that was there, and that—I mean, I’m not necessarily criticizing the attempt. I understand the role of advertising. But the suggestion was certainly there that that makes your

product better than a private company.

Mr. NOLAN. Yes. No ad that we’ve put out has indicated that the

Inspection Service is part of our security, and—— Mr. MCHUGH. Well, back to Mr.—I don’t mean to keep interrupting you, but back to Mr. LaTourette’s point, you didn’t use the

words, but you made the suggestion. You don’t agree?

Mr. NOLAN. I know what you’re saying. To some people the fact

that we have an Inspection Service is important. And would we do

anything to tell them no, it’s not important? The answer to that is

no.

Mr. MCHUGH. OK.

Mr. NOLAN. I think that, from a practical standpoint, if you say

that all that we would work on is the noncompetitive things, the

only thing that we have is noncompetitive, in a sense, is first-class

mail. Advertising mail certainly has competition. Parcels have competition. When you are looking at investigating crime, crime doesn’t

know classes of mail, and we travel from one class of mail to another when we are investigating certain aspects of crime, whether

it is pornography or child abuse, whether it is fraud. It travels

across all classes of mail, and so I don’t know how you do that. I

really don’t know how you do that.

Mr. MCHUGH. How do you do that?

Mr. CAMPBELL. I think Mr. Nolan has a good point. I’m not suggesting that it is a very simple matter. A lot of H.R. 22 deals with

exactly these kinds of problems, because there is a certain unity of

operation in the transport and collection and delivery of the mail,

and some of it is competitive and some is not the provision in H.R.

22 about allocating overhead, the equal cost coverage provision, is

an attempt to deal with that issue.

With respect to the Inspection Service, I think that you have to

think in similarly creative terms when you have joint operations.

Obviously, if the Postal inspectors find a truck of stolen first-class

mail, they are not going to give the mail to the Postal Service and

give the parcels back to the thieves. All right. Nobody is advocating

anything silly like that. But perhaps with accounting procedures

you can take care of it.

Certainly, as implied by your questions, you want to draw the

line at misuse of the Inspection Service. You want to draw the line

at activities that are not bound up with monopoly mail. When you

get into e-commerce, that is probably operationally separate. The

solution, in H.R. 22, was to create a separate corporation, which

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presumably would have taken care of the problem. But you want

to first try to limit the Inspection Service to joint operations that

you can’t avoid protecting, as long as you are protecting first-class

mail. In addition, you want to ensure the work of the Inspection

Service is not expanded beyond those activities. You have to do it

with some good will and some creativity. That’s all.

Mr. MCHUGH. Sounds like a damn good bill. I’ll have to look at

it. [Laughter.]

Mr. CAMPBELL. Go back and look at it again and see if you don’t

like it.

Mr. MCHUGH. And I appreciate the accolades. The purpose of the

hearing is really not on that focus, but it does provide one approach.

Jim Campbell, you mentioned in your comments that there was

the phrase used ‘‘a coercive nature’’——

Mr. CAMPBELL. Yes.

Mr. MCHUGH [continuing]. With respect to the Postal Service, Inspection Service and its powers. Don’t you find that in any law enforcement organization? I mean, doesn’t the FBI have the coercive

power of Federal law behind it? Does not the local police Doctor

have the coercive power of the municipal code? I mean, isn’t that

kind of part and parcel with having a police agency overseeing anything?

Mr. CAMPBELL. Sure it is. Nobody objects—nobody can reasonably object to the fact that a law enforcement agency uses coercive

powers. The problem in the past has been that the monopoly regulations create some of this coercion, apparently out of thin air, as

predicates for using the suspension, taking advantage of suspension, and because the coercion is coming from a competitor in the

field whose commercial incentive determines how the power of the

Government is being used.

Now, as I suggested in the testimony, you can certainly imagine,

at least, redefining the monopoly in terms that are much more selfexecuting, so you don’t need so much administration. You don’t

need so much coercion.

But, furthermore, the coercion that is being used, the judgment

that goes into enforcement, ‘‘Shall we, push this guy or not?’’—that

judgment ought to be rendered by somebody who is impartial, not

by somebody with a commercial interest.

Mr. MCHUGH. Yes.

Mr. CAMPBELL. That’s all I’m saying. I’m certainly not suggesting

that in the end, whatever the monopoly is and whatever the laws

are to enforce, it will not be coercive. Obviously they are going to

be coercive.

Mr. MCHUGH. So your concern is either, No. 1, your last point,

that when you have a competitive interest it causes difficulties in

terms of a truly unbiased enforcement of provisions.

Mr. CAMPBELL. Sure.

Mr. MCHUGH. Or, No. 2, that, as a followup to your earlier comment, in your opinion you have a nexus here between the natural

and probably unavoidable coercive power of any police agency and

what you feel are, if not inappropriate, perhaps illegal or excessive

assumption of power, police power, because I believe you said they

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didn’t, in your opinion, have the authority under law to do some

of the things you are doing. True?

Mr. CAMPBELL. Yes. I think that I do not want to be too accusatory here, but I do think that even veterans of the Postal Service,

looking back over the last 25 years, would say that probably

they’ve done a bit too much in pushing on the private express laws.

I think that if we could all rewrite history, you could imagine a

much more objective, fairer approach to defining and enforcing the

monopoly. My suggestion is simply that if you look back at that 25

years, you can clarify the mission of everybody so that the next 25

years are better. That’s all.

Mr. MCHUGH. Mr. Nolan.

Mr. NOLAN. I thought I heard earlier that there wasn’t any inference that the Postal Inspection Service had operated inappropriately, it was the way the law was written that was the real problem. Now apparently that’s—I’m either hearing it differently, or

maybe there is some other coercion taking place.

My sense was that what Jim Campbell had a problem with was

the way the law was written that made that monopoly statute

something that people didn’t even have to walk in the room and

talk about, someone reading it would be uncomfortable.

I think there is a big difference. When it comes to the Postal

Service and how we reacted back in 1970 to competition that we

never had before I think is an interesting discussion, but I don’t

think it is particularly relevant to where we are today.

Mr. MCHUGH. I thought I heard Mr. Campbell respond to my

question, did he believe that precisely—I didn’t mention if section

1341 permits the Postal Service to regulate in the area in which

it also competes, that in his opinion they did not.

What did we hear?

Mr. CAMPBELL. I think that the heart of the Postal monopoly regulations of 1974, which are the current regulations, is the suspension power—the power that the Postal Service exercises, purportedly under 601b of Title 39. I think that the Postal Service has

misinterpreted that provision. I’m not the only one who thinks so.

I have good reason for thinking so. I think those regulations—the

heart of those regulations represents a misinterpretation of the

law.

Now, that’s not to say that there is no Postal monopoly. Obviously, there is a Postal monopoly.

Mr. MCHUGH. Well, I was specifically talking about competitive

products.

Mr. CAMPBELL. I’m sorry.

Mr. MCHUGH. So am I.

Mr. CAMPBELL. I’m sorry. With the monopoly regulations what

the Postal Service is doing is defining the line between competitive

and noncompetitive.

Mr. MCHUGH. OK.

Mr. CAMPBELL. It is not exactly that they are regulating competitive products, but they are defining that line in a rather creative

manner, let’s say.

Mr. MCHUGH. Speaking of creativity, Mr. Nolan, hypothetically,

if we were to move the Postal Inspection Service en masse, just

pick it up as it exists today and imbued with all of the authority

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and all of the responsibilities it has and plop it into Treasury, for

example, wouldn’t your creativity still allow you to suggest that

you, as the United States Postal Service, have a certain assurance

of sanctity that others do not, because, indeed, a Postal Inspection

Service located in Treasury or within the Postal Service would still

have the responsibility of doing what it does today? Not that you

would ever inappropriately advertise, but if you were just, you

know, sitting around thinking about it.

Mr. NOLAN. I don’t think it would be as effective. I think that

we’ve got a focus with the Inspection Service right now that

couldn’t be guaranteed if the agency was picked up en masse and

moved to another location.

I think that the Nation benefits from the fact that we maintain

that focus and cover all activities that we undertake.

Mr. MCHUGH. Yes, sir. I understand that. And that really wasn’t

the point of my question. My question was more a truth in advertising question. I mean, in terms of—one of the major concerns that

we’ve heard repeatedly is that the Postal Service right now is using

the existence of the Postal Inspection Service as a reason why your

e-commerce product is more secure than perhaps some other one.

My question is, if you did that—and I understand you would say

you have not, but if you were to do that today and tomorrow the

Postal Inspection Service were part of Treasury, the same assurance is there. I understand your concern about diminution of effectiveness. I’m talking more about the advertising kind of perspective.

Mr. NOLAN. Again, I continue to believe that the reasons why

people trust us are varied, and I think that the Inspection Service

doing its job to some people indicates there should be trust, I think

to some people the fact that we’ve handled addresses a certain way

and can’t sell things and have certain mandates that we have to

live by and certain policies that we adhere to, and the way we’ve

done business over the years indicates that we should be trusted.

I think you are not going to see from us an emphasis on the Inspection Service as the reason why people should do business with

us. If we had an Inspection Service that was constantly monitoring

our products and services and reported to someone else, would we

still have that same benefit if they were as effective? The answer

is probably yes. We would still emphasize the fact that this is an

organization that can be trusted, both, we think, from a technology

standpoint and from a practice standpoint.

The investigatory aspect of it is really just one leg of a stool and

can’t stand without the others.

Mr. MCHUGH. Right, because your announcement—‘‘yours’’ being

USPS—announcement that Post-X would be the first commercial

provider of electronic postmark speaks very specifically about affording the sender legal protections and remedies for illegal interception and tampering.

If that were an Inspection Service—I assume that’s who you

meant, and if you didn’t I think one can reasonably conclude that,

but an Inspection Service in Treasury would still provide those

legal protections and remedies for illegal interception.

Mr. NOLAN. We believe it is against the law to permit interception and modified seal, et cetera, communications, whether you’re

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dealing with the Postal Service or anybody. The fact is we just happen to use the Inspection Service to do investigation. But I think

that statement could be made by our competitors, too.

Mr. MCHUGH. FedEx could tout the FBI, for example?

Mr. NOLAN. Sure.

Mr. MCHUGH. Really?

Mr. NOLAN. That’s correct.

Mr. MCHUGH. Jim Campbell, is it not true that many of the concerns you voice are not, in and of themselves, remedied by just a

transfer of location out of the Postal Service? I mean, I think you’d

make the argument that—many have said that would do it. I don’t

see that that does. I don’t see that without—if you’re going to

transfer, the same problematic circumstances exist across the wide

range unless you also take the next step of doing some kind of jurisdictional amendment.

Mr. CAMPBELL. I think you’re right. As I said in the beginning,

I think the Inspection Service, by and large, in my experience, has

been attempting to enforce the legal framework that they’re given

by others, by the Law Department or by Congress or whatever, and

the fault lies not so much with the Inspection Service and how the

law is administered but with the overall legal framework. I think

you have to look at both.

Mr. MCHUGH. Mr. Weaver, did you want to say something?

Mr. WEAVER. Yes. Thank you, Mr. Chairman. I think, once again,

we’ve got a—and I agree with Mr. Campbell. I think we perform

the role that we are given by law, and will continue to perform

that. And I’ve always said that these hypothetical situations, although we need to consider them and we need to think about them,

from our perspective it is very important for the organization to determine where they are going before you extract the Inspection

Service from the organization.

We have been charged with a mission of protecting the mails,

protecting the employees of the Postal Service, and we’re going to

continue to do that and continue to enforce the laws, and that’s our

primary mission and I can’t see it changing unless there is a major

change in the organization, and then we have to look at it.

Mr. MCHUGH. Mr. Eager or Mr. Gallo, if you’ve ever read a budget bill in Congress you know we spend a lot of time dealing in fantasy, so let’s spend a little time here right now.

If you had, if not unlimited, a significant opportunity for added

resources and you—either or both of you together—could direct

those resources, where would you put them right now? What would

you like to see the Inspection Service doing beyond what they are

budgetarily capable of doing today?

Mr. EAGER. It would be, again, based on a review of what is

needed, but prohibitive mails, narcotics interdiction, we do a lot of

good work in that area, but it is just, you know, I believe we could

do more. I believe we could do more in the area of child pornography. But those are just guesses without an assessment by each

division as to what the complaints are or what the needs are, discussions with the U.S. Attorney, and, of course, mail fraud, health

care fraud.

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Again, it would be consultation with the U.S. Attorney’s office in

conjunction with their priorities as a law enforcement agency that

we would consider.

Mr. MCHUGH. Mr. Gallo, have you got any——

Mr. GALLO. The devil is in the details. How much staffing? Funded by corporate taxes? User fees for this service?

For the expansion of the Inspection Service’s jurisdiction to ensure the sanctity of all communications, giving that to the professional men and women, these criminal investigators within the Inspection Service to expand their jurisdiction to these other areas of

communication, they would handle the job and they’ll handle it

professionally, just as professionally as they are handling it now.

But, as you said, with the budget bills, the devil would be in the

details. How would they be funded? How much staffing?

Mr. MCHUGH. Yes. Mr. Eager.

Mr. EAGER. Our concern, of course, is the future. I mean, every

time we pick up, like I said before, the paper, we read of privatization, reform. I’ll be retired, but I wonder about the sanctity of my

mail when I’m 70 years old. If it is privatized, what happens. If it

is reformed to the extent—where does privacy, where does the

sanctity issue go?

The Inspection Service has done it. I mean, for 200 years we’ve

done this, and we should have a place in the future of doing this.

Mr. MCHUGH. Yes.

Mr. EAGER. And that’s why I think maybe it should be debated.

I think the future will take care of itself, again, with technology.

We may very well get to that point of needing to move under the

executive branch of Government, depending on what happens to

the Postal Service.

Mr. MCHUGH. So you would share Mr. Weaver’s opinion that, in

terms of a logical sequence, you have to position the Postal Service

in whatever way you’re going to, and there’s a variety of thoughts

as to what should occur there before you can make a rational judgment on the Inspection Service?

Mr. EAGER. Absolutely. I mean, because if you just pick us up

and put us under the executive branch of Government right now

at this time with our current jurisdiction, you’re still going to have

the perception of unfair competition because we’re enforcing the

same statutes. The only way it could be conceivable is if it is expanded to other postal carriers in the postal system.

Mr. MCHUGH. You mention your review in 1974 of the Inspection

Service, the evaluation—or 1994, wasn’t it, sorry, 1994 as the last

time that was conducted.

Mr. EAGER. Yes, sir.

Mr. MCHUGH. I get the impression that you feel another one is

due. Is that a correct impression?

Mr. EAGER. Yes, sir, I do.

Mr. MCHUGH. Mr. Nolan or Mr Weaver, you want to——

Mr. WEAVER. Yes, Mr. Chairman. I am very familiar with the review that was conducted in 1994. It was a level of service review.

What it attempts to do is evaluate the work flow and evaluate the

resources to that work flow.

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I’m not saying it didn’t need to be done, but it was not fully implemented probably the way it should have been. But I—it is a

valid concern.

Mr. MCHUGH. Mr. Eager.

Mr. EAGER. I’ve known Chief Weaver for over 20 years and he’s

a very capable, a man of integrity and a leader, and FLEOA is well

pleased that he is our chief. We just hope he is afforded the tools

to take our agency in the direction that we need to go.

Mr. MCHUGH. Do you agree with that, Mr. Nolan?

Mr. NOLAN. Absolutely.

Mr. MCHUGH. Well, I’m glad we settled that.

The ranking member had other business and he has been tremendous, as all of you are aware, on all of this and continues to

take an active interest in this particular hearing, but he has got

to figure out how to be in two places at once, but he has submitted

a number of questions for the record that he will submit to you

gentlemen. We very much appreciate your responses at your earliest convenience.

Mr. MCHUGH. As is the custom, we also ask for your indulgence

in other followup questions from the committee, if you could provide those for the record.

I’d like to ask Mr. LaTourette if he has any concluding or additional comments or questions.

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Mr. LATOURETTE. I have one question.

Mr. MCHUGH. Go ahead.

Mr. LATOURETTE. Mr. Chairman, I will try to be expedient.

I wrote down some comments as you all were answering the

chairman’s questions. It began with you, Mr. Gallo, when you were

talking about the utility of law enforcement to do its job costs what

it costs, and you can’t look at a crime and say, ‘‘We’re going to

spend $10,000 on this crime to follow the crime through to completion.’’

That, combined with—I believe Mr. Nolan made the observation

that there had been a shift that was noticeable to revenue protection, and then Mr. Eager’s observation that there was a 25 percent

decrease in mail fraud activities within the department, and it

comes from—and before I did this I was a county prosecutor, and

we changed a lot of laws relative to drug enforcement. We had forfeiture laws. The deal was that if you went out and busted a guy

that had a nice car, if you were the police agency you got to keep

the car. Well, you didn’t get to keep it, yourself; you got to take the

assets and then file it into new stuff for the department or extra

hires or things of that nature.

There was some criticism that we—nobody was doing anything

to be funny, but any time there was a chance to get more stuff or

more officers that we would take our resources and funnel them

into chasing these guys with the nice cars—[laughter]—and not

necessarily the guy that broke into the house or the guy that stole

the ice cream from the convenience store sort of got more priority.

In this whole discussion that you were having with the chairman

about moving these guys from the Postal Service over to Treasury

Department—I understand completely that you’d have to change

the statutes or you’d just be doing the same thing at a different

place. But I wonder if the fact that, again, it takes as much as it

takes, the direction was shifted in the direction to protect revenue,

and the 25 percent reduction in mail fraud activities—is there a

danger here that the Postal Inspection Service is compromised as

a law enforcement agency because of its reliance on Postal Service

revenues as opposed to the ability to take as much as it takes?

Mr. Eager, have you thought that through? And then anybody

who has a comment.

Mr. EAGER. I think, because of our structure, that we are a law

enforcement agency that’s really quasi-business and quasi-Government agency, that it gives that perception whether it is true or not.

I mean, we can go out and conduct crime prevention and competitors to the Postal Service might say that we are taking an unfair

advantage when we’re marketing when, in fact, the field Postal inspector is simply trying to reduce theft, but the perception I guess

is what we’re dealing with in that area.

I don’t know of too many agencies, Federal law enforcement

agencies, that are structured like we are. The more business-oriented the Postal Service gets, the more probably the level of accusations will, proportionately go up.

Mr. LATOURETTE. But that’s specifically in response to my query,

that there may be the perception but there’s no truth to it?

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Mr. EAGER. Well, Mr. Campbell used the term of inspectors going

out and coercing. I mean, inspectors don’t have any monetary—we

go to investigate what we’re sent to investigate.

I would think—I mean, if I was someone out there in the private

sector and someone was coercing me, I’d take issue with it.

Mr. LATOURETTE. I think it was more going back to the drug

dealer situation. And I wasn’t talking about agents running rogue

and trying to bother people. What I was talking about is a decision

somewhere within the Postal Service that we’re going to focus on

things that protect revenue of the Postal Service, and therefore, because we don’t have enough guys and gals, or because of resources,

or whatever, you’re going to have a corresponding drop in other

things such as going out and taking a look at mail pledges because

there aren’t enough hours in the day and enough people to do it.

And my question is: is that just a potential perception, or is there

some truth to that?

Mr. EAGER. That’s FLEOA’s perception in the past, as I stated

earlier, that resources were diverted to revenue protection and they

came from somewhere, and we assume they came from the mail

fraud program, and we are dealing with a closed universe. We can

quibble over number of how many inspectors in 1975 as opposed

to the authorized complement, but we’re not talking about thousands of people here. We’re just talking about a couple of hundred

here and there.

We’ve always dealt within a closed universe of personnel, and

our priorities do change, but reduction in mail fraud of 25 percent

over that period of time I think is significant.

Mr. LATOURETTE. Chief Weaver or Mr. Nolan.

Mr. NOLAN. I would say one thing that we may not have made

clear is that the revenue protection responsibilities have now been

removed from the Inspection Service. It’s in the revenue assurance

or revenue protection unit within our administrative function area.

In part, it was because it was a more productive way of dealing

with our customers in solving problems, and in part because the

Inspection Service now is focusing on criminal activities and on

some of those audit-related things out of which grew the attempts

to protect revenue from deficiencies.

So I think what may have been a potential diversion at times has

cleared up significantly because it doesn’t exist any more as a possible area of emphasis to the Inspection Service.

Mr. LATOURETTE. Mr. Weaver.

Mr. WEAVER. Yes, if I can just clarify a point here—and make

no mistake about it, if there is a violation of the law involving our

revenue systems or our revenue stream, we will conduct an investigation, and that is where there is criminal intent and intent to

fraud. So what Mr. Nolan is talking about is the shift in moving

out of the revenue assurance business to where we used to go out

and identify revenue deficiencies and refer those to management.

I know there is some question about whether we acted as a collection agency in that regard, and we did not. We would refer that

to management for collection. We are out of that business altogether, now. We are strictly focused on upholding the laws that we

are supposed to.

149

As far as your other point, as far as being compromised and directing your resources to one area or another, that’s a valid concern, and we watch that very closely and make sure that we are

addressing problems that have a serious impact on the operations

of the organization and where we see problems occurring.

We utilize the forfeiture statute, and it is a valuable tool. And

if we can hurt the bad guys, as you’ve seen many times, by taking

their resources and their assets, we’re going to do it. We put that

money to good use as far as helping the organization move forward.

Mr. LATOURETTE. I appreciate that. The point in my experience

was—and I happen to be a fan of forfeitures because they brought

in extra dollars that you wouldn’t get through tax revenue and limited budget allocation.

Sometimes if we were looking at two drug dealers and one guy

had a Corvette and the other guy was driving a 1974 Old Cutlass,

we would probably spend a little bit more time going for the Corvette. [Laughter.]

But I thank you, Mr. Chairman and yield back.

Mr. MCHUGH. I thank the gentleman.

With that, I want to thank you all—Mr. Deputy Postmaster General, Chief Weaver, Mr. Campbell, Mr. Gallo, Mr. Eager, thank you

for your presence here today and your patience.

The hearing is adjourned.

[Whereupon, at 3:20 p.m., the subcommittee was adjourned.]

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