Correction to This Article
Because of incorrect information supplied by the U.S. Postal Service, the Federal Diary column in the Dec. 13 Metro section misidentified Louis J. Giuliano, a member of the Postal Service's Board of Governors. He is a former chairman of ITT Industries, not the current chairman.
Loss of Members Puts Postal Service Board in Precarious Position

By Stephen Barr
Tuesday, December 13, 2005

The U.S. Postal Service Board of Governors has lost three members this year, putting pressure on the remaining presidential appointees to maintain the quorum needed to conduct postal business.

The board started losing members in August, when John F. Walsh , a Connecticut businessman, abruptly resigned with a year to go in his term. In November, LeGree S. Daniels of Pennsylvania, a longtime civil rights advocate, died at 85. This month marked the departure of Robert F. Rider , a Delaware businessman, whose term expired.

Two other seats remain empty on the board, which is supposed to have nine members, plus the postmaster general and deputy postmaster general. The White House has not replaced S. David Fineman , a lawyer in Philadelphia who finished his term on the board last year, and Ned McWhirter , a former Tennessee governor, who left two years ago.

Board members typically serve nine years or, when filling a vacant seat, for the remainder of an unexpired term. No more than five of the nine members may belong to the same political party.

The board sets policies for the U.S. Postal Service and determines the dates when new postal rates become effective. The most recent rate case ended with a decision to raise the price of a first-class stamp to 39 cents, effective Jan. 8.

The White House has a search underway for nominees to the board, industry lobbyists and congressional aides said. The White House is looking at former members of Congress and corporate leaders as possible appointees and may consider bringing Rider and Fineman back as short-term "recess" appointments that can be made without Senate confirmation, the lobbyists and Capitol Hill aides said.

"You need to have open-minded, thinking people who are familiar with the challenges of a large organization," said Gene Del Polito , president of the Association for Postal Commerce. "They should have a 50,000-foot view of where the organization needs to be and where it needs to go strategically."

The Postal Service would likely be counted as a Fortune 500 company if it were not part of the government. It operates on annual revenue of about $70 billion and ended fiscal 2005 with net income of $1.4 billion.

Despite operating surpluses and increases in mail volume, the Postal Service opted to increase mailing rates next year to help offset a congressional requirement to put more than $3 billion into an escrow account from reduced pension obligations. Legislation pending in Congress would eliminate the escrow account and allow the Postal Service to use the employee pension savings for other purposes.

The board of governors is chaired by James C. Miller III , who served in the Reagan administration as director of the Office of Management and Budget and runs a consulting firm.

Other board members are Alan C. Kessler , a Philadelphia-based lawyer; Carolyn Lewis Gallagher , a Texas businesswoman; and Louis J. Giuliano , chairman of ITT Industries Inc.

Although Postmaster General John E. "Jack" Potter and Deputy Postmaster General Patrick R. Donahoe also serve on the board and can be counted for purposes of a quorum, they cannot vote to raise postal rates.

Holiday Commitment

The head of one of the largest unions at the Defense Department and a senior executive in charge of the department's conversion to a new pay and personnel system met yesterday to discuss the transition.

Defense unions recently objected to a Pentagon proposal that would give them 20 days to challenge Defense managers who void contracts or contract provisions because they are deemed in conflict with the regulation creating the new National Security Personnel System. Unions also have faulted a separate proposal that would require some contract provisions to be rewritten within 60 days to conform to the NSPS.

John Gage , president of the American Federation of Government Employees, met with Mary E. Lacey , program executive officer for the NSPS, yesterday to discuss the proposals.

Gage said the "unreasonable time frames" would make it difficult to resolve differences and would spawn grievances by unions. He said unions would come back to Lacey during the holiday season with a counterproposal "on how to do it."

Lacey said she welcomes an AFGE proposal but noted that unions had been given ample time during earlier talks to put forward their ideas on how best to implement the NSPS.

The unions have filed a lawsuit to stop the proposed NSPS labor rules, and a federal judge has set Jan. 24 to hear arguments.

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