The Postal Service board of governors will continue its procurement practices review, headed by Washington attorney Joseph A. Califano, despite objections from a House subcommittee chairman who questioned Califano's involvement and called the probe "duplicative and costly."
The board established the Califano review four days after former vice chairman Peter E. Voss pleaded guilty to embezzlement and accepting illegal payoffs, and two days before members of Congress asked the General Accounting Office to launch an independent investigation.
Rep. Frank McCloskey (D-Ind.), chairman of the House postal personnel and modernization subcommittee, asked board chairman John R. McKean last week to stop the review. In a June 11 letter, McCloskey said he was concerned about "unfocused and potentially expensive investigations which may produce no credible or new results and which may, in fact, interfere with independent investigations."
A third investigation is being conducted by the Postal Service's internal inspection agency, which discovered Voss' misconduct and reported it to the Justice Department.
McKean rejected McCloskey's request to stop the probe, and announced that the law firm of Dewey, Ballentine, Bushby, Palmer & Wood -- where Califano is a managing partner -- will cover all legal costs, including Califano's $160 hourly fee.
Concern about postal procurement practices arose following Voss' admission that he took kickbacks to help a manufacturer obtain a $250 million contract to supply new zip-code reading machines. Voss also pleaded guilty to embezzling $43,817 by billing the Postal Service for first-class airline tickets when he actually traveled coach.
Following Voss' plea, the board of governors also requested an internal investigation of the activities of William A. Spartin, president of John Gnau Associates, a public relations firm in Michigan. Spartin represented Recognition Equipment Inc. of Irving, Tex., in its effort to secure the contract for the zip-code machines. Voss admitted receiving at least $20,000 from Gnau Associates.
Spartin is also director of MSL International, the executive-recruiting firm that recommended that the board select its current postmaster general, Albert V. Casey.
Califano has been caught in a cross-fire between members of Congress and the board of governors before. Last July, Rep. Glenn English (D-Okla.) criticized Califano's bill of $97,793 to the Postal Service for representing McKean in Senate confirmation hearings for Attorney General Edwin Meese III, where McKean was questioned about $60,000 in loans he arranged for Meese.
The board has retained Califano as its counsel since 1980. It paid Dewey, Ballentine $550,000 last year and $303,000 in the first four months of this year for Califano's services. CAPTION: Picture, Joseph A. Califano . . . fee at attorney is $160 an hour