IG finds USPS steered millions to companies that gave cash and noncash bribes to employees
BY: Lachlan Markay
December 20, 2013 12:25 pm
The U.S. Postal Service steered millions of dollars in contracts to companies that bribed employees or had relationships with them that violated ethics laws, according to an inspector general report released on Wednesday.
The IG identified eleven instances of employees at USPS vehicle maintenance facilities accepting bribes from contractors, receiving kickbacks for steering work to certain companies, or awarding to contracts to family members.
The report attributed many of the procurement problems to poor oversight of USPS contract awards.
“As a result, Postal Service agreements with suppliers completing vehicle repairs and maintenance are at risk of fraud, including potential conflicts of interest, bribery, and collusion,” the IG said.
More than $13 million in contracts were awarded to two companies, both owned by the same person, after he paid “cash and noncash bribes” to vehicle maintenance facility employees, the IG found.
Two maintenance facility employees, one identified as a manager and the other as a supervisor, conspired with another contractor to file fraudulent invoices in exchange for a share of the funds.
One nonsupervisory employee steered contracts to his son, who assumed a false identity in order to hide their relationship. The resulting award violated procurement ethics rules.
“These violations occurred in an environment in which management did not define clear roles and responsibilities for VMRAs to ensure separation of duties,” the IG said.
Vehicle maintenance “personnel who selected the suppliers also influenced the assignment of repairs and approval of payments to the suppliers,” which reduced USPS’s ability to weed out fraudulent or otherwise illicit awards.
“Further, no one above the facility level monitored the payments and services allocated to each supplier or performed periodic audits of transactions, invoices, and maintenance at VMFs,” the report added. “VMF personnel confirmed that district personnel do not review their work.”
USPS management officials disagreed with the IG’s conclusion that a lack of clearly defined oversight roles allowed the violations to occur.
“The deficiencies discussed in [the report] indicate a willful intent to commit fraudulent activity for personal gain,” said USPS’s vice president for supply management in a letter to the IG.
“Based on the number of individuals involved in each case, collusion was clearly used to circumvent known policies,” they added.
The IG stood by its conclusion. “We contend that the lack of annual procurement ethics training contributed to an environment that allowed these violations to occur,” the report stated.http://freebeacon.com/first-class-bribery/