In the Matter of the Petition by

JOSEPH MESSETT
at
Monrovia, MD

P.S. Docket No. AO 09-15

APPEARANCE FOR PETITIONER:
George Finley

APPEARANCE FOR RESPONDENT:
Jerry Clark
Labor Relations Specialist
United States Postal Service

INITIAL DECISION

            Petitioner, Joseph Messett, filed a Petition under the Debt Collection Act (following the procedures of 39 CFR Part 961), which upon his subsequent retirement, was converted to a Petition under 39 CFR Part 966, Rules of Practice in Proceedings Relative to Administrative Offsets Initiated Against Former Employees of the Postal Service.  Mr. Messett’s Petition challenged a determination by Respondent, United States Postal Service, that he is accountable for a $35,965.62 shortage discovered in the unit reserve stamp stock at a postal station for which Mr. Messett was postmaster.

            On August 11, 2009, I presided at a hearing conducted in the courtroom of the Office of the Judicial Officer in Arlington, Virginia.  Ten witnesses testified, and following receipt of hearing transcripts, both parties submitted legal briefs.

FINDINGS OF FACT

            1.         Mr. Messett, a postal employee for 34 years, was the postmaster of the Kensington, Maryland Post Office as well as its White Flint finance station (White Flint) (Transcript (Tr.) 13, 243).  Mr. Messett was the direct supervisor of Mr. Pradier, who was the finance supervisor of both facilities (Tr. 18, 211, 214; Respondent’s Exhibits (Resp. Exs.) 7, 11, 13, 15-16, 20).

            2.         Mr. Pradier became the unit reserve custodian for White Flint in 2002 (Tr. 22, 140, 156, 175-176, 211).  When Mr. Pradier became unit reserve custodian, the stock was counted and was in balance (Tr. 140-141, 157; Petitioner’s Exhibit (Pet. Ex.) 1; but see Tr. 167-168).  However, the proper paperwork assigning unit reserve custodian responsibility to Mr. Pradier was not processed (Tr. 22-23, 157).  Thereafter, unit reserve counts were performed by Mr. Pradier, alone, at the direction or with the concurrence of Mr. Messett notwithstanding the Postal Service’s requirements that unit reserve counts be conducted by two employees, the unit reserve custodian and one other employee (Tr. 23-24, 160; Postal Service Handbook F-101, Field Accounting Procedures, § 14-2.6; Resp. Ex. 20).

            3.         On occasion, Mr. Messett used a duplicate key to access the White Flint unit reserve to transfer stock for retail sales, and he left the accounting transfer forms to be processed by Mr. Pradier, contrary to postal accounting requirements (Tr. 31, 55, 163-164).

            4.         On June 18, 2007, a count of the White Flint unit reserve was entered into the postal accounting system as being in balance.  While the count was identified in the accounting system as having been performed jointly by Mr. Pradier and Mr. Messett, it was performed by Mr. Pradier alone (Tr. 39, 42-43; Resp. Ex. 20).      

            5.          Mr. Pradier was selected to become a postal police officer, and was scheduled to leave for training in July 2007. As a result, Mr. Messett directed him and another employee to count the retail and unit reserve stock, and to transfer unit reserve custodian accountability to the other employee. (Tr. 19, 217).

             6.           Counts for the Kensington Post Office retail stock, White Flint retail stock, and for the Kensington Post Office unit reserve were performed by Mr. Pradier and another employee on Mr. Pradier’s last day before his postal police training began, July 5, 2007. However, the unit reserve for White Flint was not counted before Mr. Pradier left (Tr. 19, 90, 94-95; Resp. Ex. 20). Therefore, the unit reserve custodian responsibilities were not transferred to the other employee as planned (Tr. 90).

             7.          Between July 5, 2007 (when Mr. Pradier left for training) and July 20, 2007, stamp stock was transferred from the White Flint unit reserve to the retail unit with the approval of Mr. Messett, and personnel other than Mr. Messett had access to the unit reserve (Tr. 34, 92-93; Resp. Ex. 20). However, accounting forms documenting such transfers during this period either were not created or were not retained at the post office, contrary to postal accounting procedures (Tr. 44, 54, 97-98, 117-118; Resp. Ex. 20).

             8.          On July 20, 2007, the count of the White Flint unit reserve stock was completed by Mr. Messett and the employee who was asked to take over the unit reserve custodian responsibilities. The count revealed a shortage of $35,965.62 (Pet. Exs. 1, 20; Tr. 38, 90-91).

             9.         Also on July 20, 2007, Respondent issued Mr. Pradier a Letter of Demand assessing Mr. Pradier with the $35,965.62 shortage.  Respondent’s Letter of Demand was signed by Mr. Messett.  (Resp. Ex. 11).

            10.       Although various witnesses speculated about the cause of the shortage, no reliable evidence was introduced as to its cause, and it remains unexplained (Tr. 70-71, 96-97, 100, 159, 170, 193, 207, 240-241).[1] 

            11.       On July 21, 2007, Petitioner left the Kensington Post Office to become postmaster at another post office (Tr. 33; Resp. Ex. 20).  For two months thereafter, another employee was identified in the postal accounting system as the White Flint unit reserve custodian but that employee had not accepted such responsibilities (Tr. 33-24). 

            12.       On August 22, 2007, Respondent issued Mr. Pradier a Notice of Involuntary Administrative Salary Offsets assessing Mr. Pradier with personal accountability as unit reserve custodian for the $35,965.62 shortage.  The Notice was signed by Mr. Messett (Resp. Ex. 13).  Mr. Pradier filed a Petition for Hearing under the Debt Collection Act contesting his responsibility for the White Flint unit reserve shortage.  The Petition was docketed as P.S. Docket No. DCA 08-324.

            13.       Respondent’s Office of Inspector General (OIG) conducted an investigation of the White Flint unit reserve shortage (Resp. Ex. 20).  During an interview with OIG special agents, Mr. Messett stated that prior to the July 20, 2007 count, he was unaware of discrepancies in the White Flint unit reserve stock (Tr. 14, 35; Resp. Ex. 20).  However, in a subsequent interview with OIG special agents on February 1, 2008, Mr. Messett hand-wrote and signed a sworn statement to the contrary.  Mr. Messett’s February 1, 2008 sworn statement attested, in pertinent part:

I instructed Pradier on occasions not to report shortages at certain times.  It was not a blanket statement, Mr. Pradier took it to extremes.  On a few occasions we discussed how to not show shortages by using item conversion.  He would come to me and state the numbers were off in the counts and I would tell him to go back and look at the counts.  He would come back and tell me that everything was OK.  I had a feeling that he was falsifying the counts using item conversion, but the paperwork was right.  I knew he was performing floor counts alone.  A couple of occasions we were short on time and I instructed him to do so.  I was aware on occasions that he was conducting unit reserve counts alone.  I didn’t tell him not to do it.

(Resp. Ex. 20; see also Tr. 15, 35, 41-42, 65, 69-70).  

            14.       Mr. Messett’s February 1, 2008 statement was prepared during an interview in which he was told by OIG special agents that his voice had been recorded by Mr. Pradier (Tr. 58-60, 233).  Mr. Pradier previously had provided the OIG special agents with a recording that included Mr. Messett’s voice, but it was unrelated to the unit reserve shortage (Tr. 255-256).  At the time he signed the sworn statement, Mr. Messett also signed an Acknowledgement of Rights, in which he acknowledged that the interview was noncustodial and voluntary, and that he could not be disciplined for remaining silent (Resp. Ex. 20; Tr. 248-252).

            15.       Mr. Messett believed that the OIG special agents possessed an audio recording of him directing Mr. Pradier not to report the shortages (Tr. 241). When confronted with a tape recorder, which was not played and which was effectively used by the OIG special agents as a prop, Mr. Messett told the agents that if they had his voice on tape, then “I guess I did it.”   He thereafter wrote and signed the sworn statement attesting that he had instructed Mr. Pradier not to report shortages.  (Tr. 233-234, 248-249, 256).

            16.       Mr. Messett discussed with Mr. Pradier how reporting of shortages could be avoided within the postal accounting system.   He also told Mr. Pradier not to report shortages.  (Tr. 162, 231; Resp. Ex. 20; but see Tr. 213, 242).[2]

            17.       Mr. Pradier improperly altered unit reserve stock counts to reflect a balanced unit reserve at White Flint where a shortage actually existed (Tr. 163, 176, 185-186, 201).

            18.       Several witnesses called by Petitioner testified that they were never directed by Mr. Messett not to report shortages or to evade proper accounting procedures, and that they hold Mr. Messett’s trustworthiness in high esteem

(Tr. 136-137, 140-141, 146, 151).

            19.       The OIG investigation did not reach a conclusion concerning what happened to the stamps that are the subject of the unit reserve shortage at issue.  In part, this is because the paper trail maintained at the Kensington Post Office was inadequately maintained both before and after Mr. Messett was postmaster. 

(Tr. 70-71, 230, 246).[3]  

            20.       On August 15, 2008, Respondent issued Mr. Pradier a notice proposing to separate him from continued employment with the Postal Service (Resp. Ex. 15; Tr. 205), and on August 26, 2008, issued Mr. Messett a notice proposing to separate him from continued employment with the Postal Service (Resp. Ex. 18; Petition; Tr. 79).  Mr. Messett retired while the separation action against him was pending (Tr. 79-80).

            21.       On September 11, 2008, Respondent issued Mr. Messett a Letter of Demand assessing him with personal accountability for the $35,965.62 unit reserve shortage (Resp. Exs. 15-16).  The Letter of Demand was based entirely on the OIG report, and specifically was based on its conclusion that Mr. Messett had told Mr. Pradier how to get around audits without revealing a shortage

(Tr. 78, 82-83; Pet. Ex. 5).

            22.       On December 22, 2008, while Respondent actively pursued collection of the unit reserve shortage from Mr. Pradier, Respondent issued Mr. Messett a Notice of Involuntary Administrative Salary Offsets for the same debt (Resp. Ex. 7).

            23.       On January 19, 2009, Mr. Messett filed this Petition, which was suspended for several months while Respondent pursued debt collection efforts against Mr. Pradier (February 26, 2009 Order).

            24.       On April 3, 2009, in response to an order from this office,[4] Respondent submitted a clarification of its position in Mr. Pradier’s case, P.S. Docket No. 08-324.  That submission indicated that Mr. Pradier “remains initially and primarily responsible by virtue of his being the stamp stock custodian.”  (Respondent’s April 3, 2009 submission in P.S. Docket No. DCA 08-324).  However, on June 2, 2009, the Debt Collection Act Petition involving Mr. Pradier was dismissed based on a June 2, 2009 submission by Respondent.  Respondent’s submission represented that:

the [Postal] Service this date absolves Mr. Pradier of debt and withdraws the action against him. 

(June 2, 2009 Dismissal and Memorandum of Telephone Conference; June 2, 2009 letter from Respondent).  On the same date, I issued an order lifting the suspension of Mr. Messett’s Petition (June 2, 2009 Order; see also Tr. 208).

DECISION

The postal regulation imposing personal accountability for unit reserve shortages in effect at the time the shortage was identified provided that:

The postmaster . . . consigns . . . accountable paper to other career employees.  [Accountable e]mployees are held strictly accountable for any loss unless evidence establishes that they followed the postal procedures established when performing their duties.

Postal Service Handbook F‑1, Post Office Accounting Procedures, §141; see Beverly Wilson, P.S. Docket No. DCA 08-100 (June 10, 2008).  However, as properly acknowledged by Respondent, this regulation does not apply here because Mr. Messett was not the unit reserve custodian to whom accountable paper was consigned (Finding 2).  Respondent’s representation to this office that Mr. Pradier was primarily responsible for the debt under this authority because he was the unit reserve custodian is consistent with this acknowledgement (Finding 24).[5]

Respondent argues though, that other postal regulations provide the basis for Mr. Messett’s personal accountability.  Specifically, Respondent primarily relies upon the following sections of Postal Service Handbook F-1, Post Office Accounting Procedures, November 1996, Updated with Postal Bulletin Revisions through July 19, 2007:

13  Accounting Responsibilities, §131, Basic Accounting Responsibilities

Postmasters must collect all receipts to which their offices are entitled, account for all funds entrusted to them, and ensure that they meet accounting objectives.

14  Liability for Financial Losses

When an accountable financial loss occurs and evidence shows that the postmaster or responsible manager enforced U.S. Postal Service (USPS) policies and procedures in managing the post office, the Postal Service grants relief for the full amount of the loss.  When evidence fails to show that the postmaster or responsible manager met those conditions, the Postal Service charges the postmaster or responsible manager with the full amount of the loss.

42  Managing Accountable Paper at Stations, Branches and Post Offices With Stamp Accountability

Postmasters are responsible for all accountable paper within the post office and for maintaining sufficient stock to meet customer demand.

However, these regulations do not ordinarily authorize Respondent to impose personal accountability upon postmasters where another employee has been designated as the accountable custodian of the stock at issue.  See Charles Mulidore, P.S. Docket No. DCA 07-126 (September 21, 2007) (“The broad, and somewhat ambiguous, language of Section 14 does not support a strict liability standard, such as is applied to employees who are given an assigned individual accountability for a unit reserve account, for example.”); Albertha Johnson, P.S. Docket No. DCA 04-71 (August 23, 2004) (Under these regulations, “it is important to note the difference between being ‘responsible’ for complying with procedures and for the security of postal property, and being ‘accountable’ for losses.”).

Nonetheless, personal accountability of a postmaster who is not the custodian may be considered where the misdeeds of the postmaster directly caused the shortage.  See Charles Mulidore, supra (“When Section 14 has been used as the basis for liability we have required some showing that the postmaster . . . caused the loss.”); Albertha Johnson, supra (discussing possibility of accountability where “it were proved that some specific act of malfeasance or negligence by [Petitioner] directly caused the loss.”); Angela Rhodes, P.S. Docket No. DCA 06-23 (May 10, 2006) (internal citation omitted) (in absence of regulation assigning personal accountability, analyzing whether “the shortage was the direct result of [Petitioner’s] actions.”).  I analyze that consideration below.

Notwithstanding the witnesses that testified to Mr. Messett’s virtues as a postmaster and his reputation for trustworthiness (Finding 18), Respondent has demonstrated that Mr. Messett’s administration of his postmaster responsibilities was poor (Findings 2-4, 7, 16, 19). 

With regard to Mr. Messett’s February 1, 2008 sworn statement, notwithstanding his argument to the contrary, I find it implausible that Mr. Messett was so intimidated by the OIG special agents that would have written an untrue incriminating statement simply because he believed that the OIG special agents possessed a tape recording of him to that effect if he never so stated (Findings 13-15).  I find this particularly unbelievable in view of Mr. Messett’s acknowledgement that he discussed with Mr. Pradier ways to avoid showing unit reserve shortages and his signing of the Acknowledgement of Rights (Findings 14, 16).[6]  Mr. Messett’s partial recantment of that statement and his disparate statement provided during his initial OIG interview call his credibility as a witness into question.

However, this is the rare case in which the primary disputed issues of fact are found in favor of the Postal Service yet Petitioner ultimately prevails.  Aside from poor administration of his post office, the extent of the evidence of Mr. Messett’s culpability for the shortage is that he instructed Mr. Pradier to avoid reporting shortages, informed him how to do so, and Mr. Pradier’s failure to have reported shortages was in part enabled by his counting the unit reserve alone as directed or with the concurrence of Mr. Messett (Findings 2, 16-17).  For these acts and other misdeeds, a removal action was instituted against Mr. Messett before he retired (Finding 20).  While the Postal Service has proved misconduct by Mr. Messett, it has not shown how his acts directly caused the shortage.  See Albertha Johnson, supra (“no question that Petitioner’s manipulation of retail floor stock counts to conceal shortages was highly improper, but there is no evidence that this action caused the shortage.”).

We recently considered a similar situation in Peter G. Harris, P.S. Docket No. AO 09-41 (August 26, 2009), where we found that the petitioner had falsified signatures on postal accounting documents and had inaccurately reported stamp counts.  Nonetheless, we found the petitioner not personally accountable for a retail unit shortage because he was not an accountable employee under postal regulations for such a shortage and, as here, was not shown to have caused the shortage.  To hold Mr. Messett responsible in these circumstances, requires presentation of:

the facts necessary to demonstrate that his actions caused the . . . shortage [or the identification of] a regulation or other legal basis for imposing such personal financial liability for a . . . shortage upon a non-accountable employee. 

Peter G. Harris, supra.  Respondent has not done so.  Furthermore, “[t]o attempt to shift the liability for this loss to Petitioner, after first charging the [custodian] and having to withdraw that action, is also contrary to [postal] policy . . .”  Angela D. Rhodes, supra.

There is no allegation or evidence of theft or personal gain by Mr. Messett, and no plausible explanation has been demonstrated as to the cause of the unit reserve shortage (Findings 10, 19).  While such circumstances may warrant imposition of personal liability against an accountable unit reserve custodian, applicable regulations do not warrant imposition of such personal accountability against Petitioner in the absence of proof that he caused the loss.  His acts in assisting to hide the shortage, perhaps for a considerable time, while highly improper, without more, are insufficient to demonstrate that he directly caused the shortage, and do not result in his personal accountability.  As explained in Peter G. Harris, supra:

Unless a statute, regulation, or other applicable authority imposing personal liability for poor job performance has been identified, personal liability cannot attach, at least in the absence of theft or other activity resulting in Petitioner’s personal gain, or where his misdeeds were shown directly to have caused the shortage.  See Gary A. Michalak, P.S. Docket No. DCA 02-108 (June 24, 2002) ("employee [not] liable for costs . . .  without a regulation that specifically provides for such liability"); James Palagano, P.S. Docket No. DCA 03-82 (June 5, 2003) (Postal Service “must articulate, and prove, a specific basis for holding Petitioner liable for the loss”); Doris Simmons, P.S. Docket Nos. 08-84, 08-85 (April 24, 2003) (Postal Service must identify a basis for holding Petitioner personally, financially responsible).

Petitioner’s conduct was improper.  However this does not equate to personal liability.  The Debt Collection Act is only a vehicle for recovering employee debts, and not a means to punish poor job performance.  See, e.g., Gertrude S. Campbell, P.S. Docket No. DCA 99-70 (June 3, 1999).

The Petition is sustained.  Respondent may not offset the debt at issue from payments otherwise due Petitioner and must refund any money previously offset.

Gary E. Shapiro
Administrative Judge

[1] Among the speculation was Mr. Messett’s position that stock transferred to a Stamp Distribution Office was not deducted from the unit reserve accountability.  This speculative argument was effectively rebutted by Respondent however (Tr. 121-125, 129-131).  Mr. Messett’s complaints that he was unable to determine effectively the cause of the shortage because Respondent did not provide him with certain documents were negated by his own responsibility to maintain such records and his failure to have afforded himself of the opportunity to review records that were available (Tr. 44, 50-54, 116, 118, 219-222, 225-228, 230-231, 242, 245-246, 254-255; Pet. Ex. 10).

[2] Mr. Messett denied so informing Mr. Pradier notwithstanding his February 1, 2008 sworn statement to the contrary.  Mr. Messett testified during the hearing that he discussed with Mr. Pradier how not to show shortages, but denied having instructed him to do so (Tr. 214).

[3] The OIG reports included the results of a polygraph examination of Mr. Pradier.  I ordered all such polygraph evidence excluded, and it has not been considered in this Initial Decision

(Tr. 133, 178).

[4] On March 31, 2009, the Debt Collection Act case involving Mr. Pradier was re-assigned to the undersigned Administrative Judge.

[5] However, Respondent thereafter “absolve[d]” Mr. Pradier from responsibility for the debt (Finding 24).

[6] Moreover, I found the testifying OIG special agent to have been credible in all respects based on his demeanor at the hearing.