Senator chastises Postal Service on executive relocation payments

A senior Republican senator publicly questioned the U.S. Postal Service this week on its policy of giving executives payments for relocating and allowing them to keep unspent funds.

Finance Committee Chairman Charles Grassley, R-Iowa, called the policy "irresponsible" and criticized the Postal Service for making 265 relocation payments in 2003 and 2004 of $10,000 each, totaling $2.65 million. The letter was sent to Postmaster General John E. Potter on Tuesday and released to the public on Wednesday.

"It's irresponsible for the Postal Service to make these payments without accounting for how the money is spent," Grassley said in a press release.

Postal Service spokesman Gerry McKiernan said that those figures make more sense in the context of the entire organization.

"If you break it down that's 132 people in the course of one year in an organization of 700,000," he said. "$2.65 million is not an insignificant sum, but it is a $69 billion corporation."

McKiernan said also that this is the only policy in which the Postal Service does not require employees to itemize expenses. He said the agency believes there are too many associated costs with relocation to estimate the individual cost of each move.

In an April 30 letter to Grassley, Postal officials said that they have been directed by Congress to run the agency like a business and provide their employees with comparable compensation to the private sector. According to Postal Service statistics, 92 percent of relocations each year do not receive the special payment.

Postal officials also told Grassley that relocation benefits are needed to encourage senior officials to move to higher cost areas because Postal Service executives do not receive locality pay.

"I don't quite understand that," Grassley wrote. "If talented individuals are being rewarded for good performance, why do they need payments of $10,000, and sometimes more, as an inducement to relocate."

The letter also questioned why "such payments have been handed out to individuals who have moved only a few miles."

Grassley called on Potter to withhold relocation bonuses from the deputy postmaster general and the senior vice president for human resources, who are both retiring. According to Grassley's office, those executives have received a total of $125,000 in relocation bonuses over the past seven years.

"I hope you can assure me that these individuals will not be receiving the same generous relocation allowances that they have received in the past," Grassley wrote. "Even if a generous relocation payment were necessary as an inducement to relocate, I don't see how it benefits the USPS or the American public to offer the same allowance upon retirement."