Peter E. Voss, vice chairman of the U.S. Postal Service's governing board, pleaded guilty yesterday to federal charges of receiving illegal payments for helping a Dallas company in its attempts to obtain a multimillion-dollar government contract in what U.S. Attorney Joseph E. diGenova called a "massive fraud and corruption scheme that was nipped in the bud."
Voss, a Reagan administration appointee to the board who cochaired Reagan's Ohio campaign in the 1980 presidential race, was charged with taking at least $20,000 worth of payoffs in a fee-splitting arrangement with a public relations firm hired by the Dallas company. The public relations firm was headed by John R. Gnau Jr., Reagan's 1980 Michigan campaign chairman.
Voss also pleaded guilty in an information in U.S. District Court to a separate scheme of embezzling money from the Postal Service by collecting for a first-class airline ticket when he actually traveled in coach class.
According to Assistant U.S. Attorney E. Lawrence Barcella Jr., Voss submitted fraudulent expense vouchers for $70,000 worth of first-class air travel when he spent only $26,000 for the trips.
The Postal Service contract involved in the case, which has yet to be awarded, is worth at least $230 million, diGenova said. Voss ultimately could have received more than $600,000 for his role in the scheme, diGenova said.
U.S. District Judge George Revercomb set July 24 for sentencing. Voss faces up to seven years in prison and a fine of $21,000, according to diGenova. Prosecutors said that Voss resigned from the postal board yesterday.
Voss' pleas come at a time when the Postal Service is in turmoil. In the past 18 months, the agency has been led by three postmasters general, and the current one, Albert Casey, is expected to step down by the end of this year. In March, two former high-ranking Postal Service officials were convicted for their part in the operation of a $2 billion bribery, kickback and fraud scheme involving the Postal Service and the Small Business Administration.
Voss, a 55-year-old Canton, Ohio, businessman who was named to the Board of Governors in 1982 and elected vice chairman in January, pleaded guilty to one count of seeking an illegal gratuity and a second of accepting a gratuity in connection with his position on the board. He also pleaded guilty to a count of embezzling $1,180 in Postal Service funds in connection with the airline ticket scheme, according to the charges.
But Barcella outlined a far-reaching case that prosecutors were prepared to present against Voss. Voss, flanked by two defense attorneys, acknowledged that the facts were "essentially" correct.
According to Barcella, a Dallas manufacturing company seeking to sell a new type of ZIP code-reading technology to the Postal Service met with Voss in August 1984, and Voss recommended that the company hire John R. Gnau Associates Inc., a Michigan public relations firm.
In January 1985, Gnau's firm negotiated a contract to represent the Dallas company for $30,000, plus expenses and a bonus of 1 percent of the final Postal Service contract if the firm was successful.
Beginning in January 1985, Voss arranged for Gnau officials to meet with Postal Service officials, the postmaster general and other postal board members to discuss the Dallas company's equipment. During the summer of 1985, said Barcella, Voss "encouraged, recommended and instructed the deputy postmaster general" that the agency purchase the Dallas company's product and bypass the established review process.
In all, according to Barcella, Voss received money and property under the scheme worth at least $20,000.
The established process is being used to award the contract, according to a Postal Service spokesman. The Dallas company -- Recognition Equipment Inc. -- and another firm are about to begin a competitive tryout with their equipment for the Postal Service as part of their bids, the spokesman said.
DiGenova said the investigation into the huge Postal Service contract is continuing, in conjunction with Postal Service inspectors.
David DuMouchel, a Detroit lawyer who represents Gnau, said, "He is not charged with anything and his company was not charged, and if anything was done wrong, John Gnau didn't know about it."
William G. Moore Jr., head of Recognition Equipment, said his company has been cooperating with the probe and is not a target of it. "We have done nothing wrong and are unaware of any fee-splitting arrangement that went on," he said.
Voss, who was an unsuccessful candidate for the U.S. Senate in 1974, is one of nine appointees to the Board of Governors, who are paid $10,000 annually, plus travel expenses and $300 a day for a maximum of 42 meetings per year.
Once considered a rubber-stamp for the postmaster general's actions, the board has become more influential under the Reagan administration, and Voss has been one of its most active members.
He developed a reputation for high board-related expenditures -- including stays at the luxurious Ritz-Carlton hotel when in Washington on official business, and large long-distance telephone bills. His habits caused so much concern by 1983 that fellow board members adopted new guidelines designed to curb certain expenses.