Postal Service:

Board of Governors' Contract for Legal Services

GGD-87-12: Published: Feb 10, 1987. Publicly Released: Feb 20, 1987.

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In response to a congressional request, GAO provided information on: (1) the U.S. Postal Service (USPS) Board of Governors' contract for legal services; (2) the process the Board used to authorize its outside counsel to perform legal work; (3) the total costs of such work; (4) the Board's authority to approve USPS expenditures; (5) USPS authority to expend funds for legal services the Board's outside counsel provided in connection with investigations of the Board Chairman's actions; and (6) the Chairman's involvement in the Board's decision to pay for legal services involving the investigations.

GAO found that: (1) in June 1980, after deciding that it needed independent legal assistance, the Board contracted with a private law firm; (2) either party can terminate the current contract with a written 30-day notice; (3) in September 1986, a contract change stipulated that only the Chairman or the Vice-Chairman had the authority to request legal services other than attendance at Board meetings; (4) the total contract costs, including the 4 months the contract was in effect in fiscal year (FY) 1980, through the first 10 months of FY 1986, amounted to about $2.9 million; (5) the Postal Reorganization Act of 1970 provided the Board with the authority to approve, and USPS to expend, funds for legal services; and (6) the Board does not have authority to expend funds for the personal legal expenses of USPS employees. GAO also found: (1) USPS was not authorized to pay for the Board counsel's representation of the Chairman's personal interests at a Senate hearing; (2) it could not determine the amount USPS expended for this work, since the bill did not identify charges with specific tasks; and (3) the Chairman's participation in the Board's decision to pay for the legal services connected with the investigations of his actions did not violate any criminal conflict of interest law.

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