B-169659, JUN. 11, 1970

B-169659, JUN. 11, 1970

TO MR. POSTMASTER GENERAL:

REFERENCE IS MADE TO THE LETTER, WITH ENCLOSURES, DATED APRIL 20, 1970, FROM THE SPECIAL ASSISTANT FOR ACCOUNTING SERVICES, FINANCIAL SYSTEMS MANAGEMENT DIVISION, BUREAU OF FINANCE AND ADMINISTRATION, POST OFFICE DEPARTMENT, TO THE ASSISTANT DIRECTOR, CIVIL DIVISION, OF THIS OFFICE, TRANSMITTING FOR OUR APPROVAL A COMPROMISE OFFER OF $7,335.34, TO SETTLE IN FULL THE POST OFFICE DEPARTMENT'S REVENUE DEFICIENCY CLAIMS TOTALING $36,895.56, AGAINST THE CALIFORNIA APPAREL NEWS (NEWS) AND THE PACIFIC COAST RECORD (RECORD), BOTH PUBLISHED BY MR. J. R. OSHERENKO, OF LOS ANGELES, CALIFORNIA. WE UNDERSTAND THAT MR. OSHERENKO IS NOW DECEASED.

BOTH THE NEWS AND THE RECORD HAVE BEEN ACCORDED SECOND-CLASS MAILING PRIVILEGES. AN AUDIT IN 1968 BY THIS OFFICE DISCLOSED THAT NEITHER PUBLICATION MET THE 65 PERCENT PAID CIRCULATION REQUIREMENT NECESSARY TO RETAIN SECOND-CLASS PRIVILEGES, AND THAT A NUMBER OF COPIES WHICH WERE MAILED AT THE POUND RATES SHOULD HAVE BEEN MAILED AT THE TRANSIENT RATES. POSTAL INSPECTOR BADER INVESTIGATED AND DETERMINED THAT THE PUBLISHER WAS INDEBTED IN THE AMOUNT OF $36,895.56. IN A LETTER DATED MAY 15, 1969, THE PUBLISHER OFFERED TO PAY $7,335.34 IN FULL SETTLEMENT OF THE DEPARTMENT'S CLAIMS AGAINST HIS COMPANY. THE DEPARTMENT'S ASSISTANT GENERAL COUNSEL, OPINIONS DIVISION, HAS RECOMMENDED ACCEPTANCE OF THE COMPROMISE OFFER. UPON THE RECOMMENDATION OF THE ASSISTANT GENERAL COUNSEL, THE SPECIAL ASSISTANT FOR ACCOUNTING SERVICES HAS TRANSMITTED THE COMPROMISE OFFER TO THIS OFFICE, STATING THAT:

"PURSUANT TO 4 CFR 103.1, THE DEPARTMENT ONLY HAS AUTHORITY TO COMPROMISE CLAIMS WHICH DO NOT EXCEED $20,000. ACCORDINGLY, THE ATTACHED COMPROMISE OFFER IS REFERRED FOR YOUR CONSIDERATION AND CONCURRENCE."

THE AFOREMENTIONED REGULATION WAS PROMULGATED JOINTLY BY THE ATTORNEY GENERAL AND THE COMPTROLLER GENERAL UNDER AUTHORITY GRANTED BY THE FEDERAL CLAIMS COLLECTION ACT OF 1966, 31 U.S.C. 951 TO 953. THAT ACT PROVIDES THAT THE HEAD OF AN AGENCY, PURSUANT TO REGULATIONS PRESCRIBED BY HIM AND IN CONFORMITY WITH SUCH STANDARDS AS MAY BE PROMULGATED BY THE ATTORNEY GENERAL AND THE COMPTROLLER GENERAL, MAY COMPROMISE, OR CAUSE TERMINATION OF COLLECTION ACTION ON, ANY CLAIM WHICH DOES NOT EXCEED $20,000, EXCLUSIVE OF INTEREST, AND WHICH HAS NOT BEEN REFERRED TO ANOTHER AGENCY FOR FURTHER COLLECTION ACTION. THIS OFFICE'S AUTHORITY TO COMPROMISE CLAIMS IS ALSO LIMITED BY THE PROVISIONS OF THE FEDERAL CLAIMS COLLECTION ACT TO THOSE CLAIMS WHOSE PRINCIPAL AMOUNTS DO NOT EXCEED $20,000, EXCLUSIVE OF INTEREST.

WE WISH TO DIRECT YOUR ATTENTION TO THE ALTERNATIVE DEBT COLLECTION PROCEDURES AVAILABLE TO THE POST OFFICE DEPARTMENT UNDER THE PROVISIONS OF SUBSECTIONS (A) AND (B) OF 39 U.S.C. 2401. SUBSECTION (A) PROVIDES THAT THE POSTMASTER GENERAL SHALL COLLECT DEBTS DUE THE DEPARTMENT AND COLLECT AND REMIT FINES, PENALTIES, AND FORFEITURES ARISING OUT OF MATTERS AFFECTING THE DEPARTMENT, AND THAT HE MAY REFER ANY DEBT WHICH IS ADMINISTRATIVELY UNCOLLECTIBLE TO THIS OFFICE. SUBSECTION (B) PROVIDES:

"(B) IN ALL CASES OF DISABILITY OR ALLEGED LIABILITY FOR ANY SUM OF MONEY BY WAY OF DAMAGES OR OTHERWISE, UNDER ANY PROVISION OF LAW IN RELATION TO THE OFFICERS, EMPLOYEES, OPERATIONS, OR BUSINESS OF THE POSTAL SERVICE, THE POSTMASTER GENERAL SHALL DETERMINE WHETHER THE INTERESTS OF THE DEPARTMENT PROBABLY REQUIRE THE EXERCISE OF HIS POWERS OVER THE SAME. UPON THE DETERMINATION THE COMPTROLLER GENERAL, WITH THE WRITTEN CONSENT OF THE POSTMASTER GENERAL AND ON SUCH TERMS AS THE POSTMASTER GENERAL DEEMS JUST AND EXPEDIENT, MAY -- (1) REMOVE THE DISABILITY; OR (2) COMPROMISE, RELEASE, OR DISCHARGE THE CLAIM FOR SUCH SUM OF MONEY AND DAMAGES."

IF YOU DETERMINE IN ACCORDANCE WITH THAT PROVISION THAT THE COMPROMISE OFFER SHOULD BE ACCEPTED, WE SHALL BE PLEASED TO CONSIDER THE COMPROMISE OFFER UPON RECEIPT OF YOUR DETERMINATION.

PRIOR TO RESUBMISSION OF THE OFFER TO THIS OFFICE, HOWEVER, TWO MATTERS RAISED BY THE RECORD SHOULD BE CLARIFIED. IT IS NOT CLEAR FROM MR. OSHERENKO'S LETTER OF MAY 15, 1969, WHETHER HIS OFFER WAS INTENDED TO RELATE ONLY TO THOSE CLAIMS ASSERTED AGAINST THE NEWS OR WHETHER IT WAS INTENDED TO RELATE TO THE DEPARTMENT'S CLAIMS AGAINST BOTH PUBLICATIONS. SINCE AT THE TIME THE LETTER, WHICH REFERS ONLY TO THE NEWS, WAS WRITTEN, MR. OSHERENKO DENIED OWNERSHIP OF THE RECORD, WE DO NOT BELIEVE THAT THE OFFER WAS INTENDED TO APPLY TO BOTH PUBLICATIONS. HOWEVER, IN HIS LETTER MR. OSHERENKO STATES THAT THE OFFER OF $7,335.34 (THE AMOUNT OF THE NEWS' 1968 DEFICIENCY) MUST BE ACCEPTED "IN FULL PAYMENT OF ALL THE DEBITS OWED BY MY FIRM." IN A LETTER DATED SEPTEMBER 2, 1969, THE ACTING DIRECTOR, FINANCIAL SYSTEMS MANAGEMENT DIVISION, BUREAU OF FINANCE AND ADMINISTRATION, ASKED MR. OSHERENKO TO CLARIFY THE TERMS OF HIS OFFER. THERE IS NO EVIDENCE BEFORE US INDICATING THAT THE DEPARTMENT RECEIVED A RESPONSE TO THIS LETTER. WE BELIEVE THAT CLARIFICATION OF THE TERMS AND SCOPE OF THE COMPROMISE OFFER IS NECESSARY. ALSO, TO ASSESS THE IMPACT, IF ANY, OF MR. OSHERENKO'S DEATH, YOUR SUBMISSION SHOULD INDICATE THE FORM OF THE BUSINESS ORGANIZATION REPRESENTED BY MR. OSHERENKO.

YOUR DEPARTMENT'S ASSISTANT GENERAL COUNSEL, OPINIONS DIVISION, IN HIS REPORT OF APRIL 3, 1970, TO THE BUREAU OF FINANCE AND ADMINISTRATION OF THE FINANCIAL SYSTEMS MANAGEMENT DIVISION, INDICATES THAT THE COMPUTATION BY POSTAL INSPECTOR BADER OF THE REVENUE DEFICIENCIES MAY HAVE BEEN ERRONEOUS, RESULTING IN AN OVERSTATEMENT OF THE ACTUAL AMOUNT DUE. THEREFORE, THE DEPARTMENT SHOULD REVIEW THE CALCULATIONS AND RECOMPUTE, IF NECESSARY, THE AMOUNT OWED BY THE PUBLISHER.

WE ARE RETURNING HEREWITH THE LETTER, WITH ENCLOSURES, FROM THE SPECIAL ASSISTANT FOR ACCOUNTING SERVICES, FOR YOUR FURTHER CONSIDERATION.