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Postal Service lets execs keep extra moving cash

The Postal Service gives its executives moving expenses of $10,000 or $25,000 without requiring receipts, letting employees to keep any leftover money. The Postal Service defends the practice, saying executives won’t be lured away by competitors.
/ Source: The Associated Press

The Postal Service gives its executives moving expenses of $10,000 or $25,000 without requiring receipts, allowing employees to pocket any leftover money.

The mail service says it uses the payments as a way of easing transitions to new, sometimes more expensive cities and ensuring that executives won’t be lured away by competitors.

One senior vice president received $75,000 — $25,000 each for three moves from June 1998 to February 2001. The mail service gave 265 executives $10,000 each and 10 others $25,000 each in the past two years, according to information gathered by Senate Finance Committee investigators.

Practice defended
The Postal Service defends the practice, saying Congress wanted it to operate like private business where salaries may be higher. Committee Chairman Charles Grassley, R-Iowa, isn’t buying the argument.

“The American public does not want to pay more for postage so that you can give that amount to handouts to USPS executives,” Grassley wrote in a letter Tuesday to Postmaster General John Potter. The Associated Press obtained a copy of the letter.

Ralph Moden, the Postal Service’s senior vice president for government relations, wrote Grassley in April that unlike other executive branch employees, postal executives do not receive automatic yearly increases.

“Increases to salary are solely based on performance,” Moden wrote. “With no locality pay, we often have difficulty recruiting talented individuals for the more challenging positions, many of which are located in high cost-of-living areas.

“As a result, we use relocation benefits as an inducement to move to these higher cost-of living areas and defray the numerous expenses faced in such a move.”

Variables: Location, size
Whether a postal executive actually gets to pocket moving expenses depends on the locations involved and the size of his or her living quarters.

Moving expense figures provided by the American Moving and Storage Association show that someone moving a two-bedroom apartment would likely pocket thousands of dollars if given a $10,000 stipend.

The association, which represents interstate movers, said such a move from Washington to Los Angeles would cost between $5,500 and $6,400. The same move from Baltimore to Chicago would cost between $3,700 and $4,300; from Atlanta to Dallas, $4,100 to $4,600; and from New York to Boston, $3,800 to $4,400.

Expenses on expenses
For an eight-room house, a $10,000 payment might not cover a Washington to Los Angeles move, typically between $9,000 and $11,000. It would be more than enough for moves from Baltimore to Chicago, $6,000 to $7,200; Atlanta to Dallas, $6,200 to $7,300; or New York to Boston, $6,200 to $7,300.

Besides moving costs, an executive might incur costs for real estate agent services, closing a home sale, transporting a family and hunting for a home.

Grassley wrote Potter that he doesn’t understand why the moving payments should be justified on grounds that postal executives’ raises are based on performance.

“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?” he asked.

In some cases, Grassley said, payments have been handed out to individuals who moved only a few miles.

Grassley said the deputy postmaster general, who received a $50,000 relocation allowance in 2000, and the postal vice president, who received the three payments of $25,000, are retiring soon and are eligible for one final relocation payment.

“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.”

Rate increase proposed
The Postal Service has proposed to the independent Postal Rate Commission that first-class stamps go from 37 cents to 39 cents and that postcard costs be raised from 23 cents to 24 cents.

In announcing the rate proposal, the Postal Service said it is needed only because a 2003 law requires the agency to place $3.1 billion annually in an escrow account.