Postal Board Member Tied to Pact Fraud : Chairman of House Panel Says He’ll Fight Her Renomination

A House committee chairman disclosed today that a Postal Service investigation implicated a member of the service’s own board in a contract scandal that has sent two people to prison.

As the implicated board member, Ruth O. Peters, looked on, Rep. William D. Ford (D-Mich.), the chairman, released a portion of the previously classified investigation by the service’s inspector general.

Ford told Peters, whose term ends later this year, that he will fight her renomination. She said she had not decided whether to seek reappointment.

Ford told Peters, who along with other members of the board of governors was attending a congressional hearing into higher postal fees, that although the 40-page section of the investigation report by the service’s inspector general does not allege Peters had “criminal intent,” it does say “that what you did was no different than if there was criminal intent.”

Ford then asked Peters if she believed that she should remain on the board.

“Yes, I do,” Peters said, adding that her actions were misconstrued and that she did not feel she had done anything wrong.

Says She Hasn’t Decided

Later, Ford asked her if she planned to ask the White House to appoint her to another term when her term expires later this year.

Peters responded, “I just haven’t thought about it.”

“If you insist on staying,” Ford said, “then I will assure you I will do whatever I can to keep you off the board. . . . I don’t believe your conduct warrants continued service on the board.”

The report alleges that Peters’ activity “suggested possible conflict of interest, misrepresentation and a scheme to defraud the U.S. Postal Service of the loyal and faithful services of its officers, including the opportunity to make factual, unbiased procurement decisions.”

Ford released the report after more than an hour of criticism by members of two Post Office subcommittees on the postal board’s decision to recommend a 3-cent increase in the price of first-class stamps to 25 cents.

Ford, entering the session about an hour after it began, almost immediately released the portion of the report on the scandal involving the purchase of a new automation program.

Ex-Vice Chairman in Prison

Two people are already serving prison terms for their role in the scandal.

Peter E. Voss, former vice chairman of the board, is in a Pennsylvania prison after pleading guilty to charges of accepting illegal gratuities and of turning in false expense accounts. He is cooperating with the U.S. attorney’s office in Washington.

A Michigan businessman, John Gnau, also pleaded guilty to a felony charge in the case based on evidence supplied, in part, by Voss.

According to the facts already known about the case, Voss arranged for a Texas company, Recognition Equipment Inc., to hire Gnau to help the firm in seeking a billion-dollar postal contract for the automation equipment.

The company paid Gnau thousands of dollars in consulting fees, and Gnau passed along some of the money to Voss. Those payments led to Voss’ guilty pleas to accepting illegal gratuities.

The contract for the equipment still has not been awarded.