Postal Official Under Scrutiny : Possible Interest Conflict Case Sent to Justice Dept.

The U.S. comptroller general, saying that a General Accounting Office investigation has “disclosed possible violations” of the law, asked the Justice Department Thursday to decide whether the chairman of the policy-making Postal Service Board should be prosecuted on conflict-of-interest charges.

The chairman, John R. McKean, was investigated last year by the GAO and by the independent Office of Government Ethics for his role in retaining a San Francisco law firm with which he had a business relationship to participate in postal contract negotiations. McKean, president of a San Francisco accounting firm that bears his name, had served as a certified public accountant for the law firm, Littler, Mendelson, Fastiff & Tichy.

A spokesman for his San Francisco office said that McKean would have no comment on Thursday’s action.

In addition, both watchdog agencies asked the Justice Department to examine whether former Postmaster General William F. Bolger broke the law in discussing his job prospects with the Direct Marketing Assn., a trade organization of major mail users, when he was involved in a postal rate case in which the association had an interest. Bolger resigned his post less than two months ago.

Federal law prohibits government employees from participating “personally and substantially” in official matters in which they have a financial interest. The statutory prohibition extends specifically to the awarding of contracts and to negotiations or arrangements concerning prospective employment.

Removed Self From Case

Bolger, now an administrator with the prominent Washington lobbying firm of Gray & Co., said he had testified last year before the House Post Office and Civil Service Committee that he had removed himself from the postal rate case and that his employment negotiations were carried on by his attorney.

Moreover, he said, he had repeated his assertions to GAO investigators. “They have my side of the story. What else they have, I don’t know,” he said. “We’ll just have to see what develops.”

Rep. William D. Ford (D-Mich.), the House committee chairman who requested the investigations of McKean and Bolger, said that the two agencies had notified him of their requests to the Justice Department but had refused to provide details because of a policy of not commenting on matters under consideration by that department or the courts.

Agrees With Policy

After saying that he “wholeheartedly” agreed with that policy, Ford noted in a statement: “It would be wrong for me to say anything that would prejudice the outcome of (these cases). I will recommend the committee take no further action at this time, since it would certainly affect the work of the Justice Department and possibly infringe on the rights of the parties involved, especially since one of the persons still holds a high government office.”

McKean was questioned last year by the Senate Judiciary Committee about an interest-deferred $60,000 loan he had arranged for Atty. Gen.-designate Edwin Meese III before his appointment to the nine-member board, which sets policy for the U.S. Postal Service. Special prosecutor Jacob A. Stein found Meese had committed no criminal acts in his dealings with McKean, and Meese denied there was a connection between the loan and McKean’s appointment.