Former U.S. Postal official improperly used office to conduct personal business

The former third-ranking official at the U.S. Postal Service improperly used his office to conduct personal business, awarded millions of dollars in noncompetitive contracts to former colleagues and failed to disclose stock holdings in a company conducting business negotiations with the mail agency, according to a new watchdog report.

A 64-page report by the Postal Service Office of Inspector General found that Robert F. Bernstock, former president of mailing and shipping services, clashed with Postal Service attorneys over whether he could conduct outside business by using agency computers, e-mail and staff. Postmaster General John E. Potter later permitted him to forward a limited number of e-mails from his personal accounts to his agency e-mail, the report said.

Bernstock also used office telephones to conduct teleconferences and other meetings related to his private business holdings and instructed staffers to conduct private work for him, investigators found.

He resigned in June after less than two years on the job. A former executive at several top retail brands, including Campbell's Soup, Scott's Miracle-Gro and Vlasic Foods, Bernstock had a $232,500 salary and managed the Postal Service's product management and development, retail operations and commercial services and sales.

He received an $85,000 hiring bonus when he joined the agency in June 2008 and an $85,000 retention bonus for fiscal 2009. Potter permitted him to continue serving on five private and public company boards, including Nutrisystem and City Barbeque, a company he co-owned. Bernstock made more than $270,000 in cash and other compensation from the boards in 2008.

In an interview Wednesday, Bernstock said: "I tried to behave in a lawful, ethical manner. There are differences, but my intent was to always behave according to the higher standards of ethics and always obey the law."

Asked to comment on the accuracy of the report's findings, Bernstock said, "I've moved on, and the Postal Service has moved on, and it's best to live in the future."

Bernstock praised Potter and his team.

"The thing I feel most strongly about is that Jack Potter has done a fabulous job; he has a tremendous team," Bernstock said. Bernstock helped develop the agency's "If it fits, it ships" marketing campaign for its Priority Mail flat-rate boxes and orchestrated the rollout of greeting card sales in a limited number of post offices. But his tenure coincided with record financial losses for the Postal Service as mail volume plummeted to historic lows.

The report also details how Bernstock awarded noncompetitive contracts to former business associates and a $1.5 million consultant deal with Goldman Sachs. He also violated company policy by negotiating a holiday bulk stamp sale agreement with Costco while owning $30,000 in company stock. The Postal Service requires officials owning more than $15,000 in a company's stock to recuse themselves from any official dealings with the company.

The Postal Service would not comment on the report because Bernstock is no longer with the agency.