The Case of the Ghostly Governor

How a Governor who left office in 2016 authorized USPS rates for 2018…

Note: the Billbray letter was pointed out to us by a former postal official, and was first reported on by postalmag.com. Some reports have referred to the Billbray letter as “postdated”, which is not accurate, since the letter is dated November 14, 2016, presumably the actual date it was signed- even though it was not filed with the PRC until almost a year later.

On Friday the US Postal Service filed documents with the Postal Regulatory Commission setting the stage for a price increase due to take effect in January. Rate increases (including those for competitive products which are not subject to CPI caps) require a vote of a quorum of the USPS Board of Governors, excluding the two ex officio members of the board, the Postmaster General and her deputy.

Therein lies the problem- the PMG and DPMG are currently the only members of the board. Thanks to Bernie Sanders and the rules of the US Senate, there are currently no Presidentially appointed governors to approve rate increases.

Despite that seemingly insurmountable hurdle, the USPS managed to present the PRC with a letter from the Board of Governors, signed by a genuine Governor- who left office back in 2016.

Hunh?

To understand this bizarre turn of events, we need some history. Back when the BOG still had a legal quorum of presidential appointees, it voted to establish a “Temporary Emergency Committee” to which it delegated many of its powers. That, according to the Board, allowed it to continue making decisions regardless of how many Governors there were.

Time passed. The Senate continued to ignore the BOG nominations. Governors’ terms continued to expire, until, at last, there was only one Governor left, Democrat James Billbray of Nevada. Before he left office in December, Billbray apparently convened a meeting of the Governors. Or, to be accurate, a meeting of the Governor.

Relying on the “emergency committee” order passed previously, Billbray “voted”, in November 2016, to approve new rates- for the year 2018.

All of which raises the question- is it legal for a “Board of Governors” which disappeared more than a year before the effective date to approve new rates? Especially when there’s only one Governor?

While there have not been any legal actions yet challenging the USPS’s very imaginative governance arrangements, that could change, especially now that decisions with questionable legal underpinnings might cost mailers real money.

Is there a case to be made? I’m not a legal expert, but it’s worth noting that shortly before Governor Billbray signed off on the rate increase a year in advance, the American Bar Association sent a letter to the Senate leadership warning of the problems that would arise from continued inaction on BOG appointments:

… once the term of the remaining governor expires December 8, 2016, the Board will lack even a single appointed governor. Under the governing statute and regulations, without a quorum the Board cannot take the most basic actions necessary to keep the USPS properly functioning such as hiring or dismissing a postmaster general; approving annual USPS plans for financing, capital expenditures, and operations; … approving any major policy positions taken by USPS; adjusting the rates and fees for key products; appointing or removing the Inspector General; or selecting an independent public accounting firm to certify USPS financial statements.

… strongly suggesting that the ABA wasn’t buying the “Temporary Emergency Committee” charade- and just to make matters worse, it reminds the Senate that as things stand, the PMG and the OIG report to no one. Legally, there is no one with the authority to fire either of them, or to appoint a replacement should either leave office for any reason.