AP NEWS
Related topics

Civil settlement ends probe of postmaster general

October 31, 1997

WASHINGTON (AP) _ The Justice Department ended a criminal investigation against Postmaster General Marvin Runyon, but he paid $27,550 as part of a civil settlement of conflict-of-interest allegations.

The settlement Thursday concluded an investigation into whether Runyon broke the law by taking part in talks about placing Coca-Cola machines in post offices. He owned Coke stock at the time.

The deal was never completed and the slow pace of the investigation, which started in 1996, had begun drawing congressional criticism.

Civil settlements are permitted in cases of ``non-willful″ violations of the law banning federal officials from taking part in matters in which they have a financial interest, the Justice Department said.

``It’s a good agreement, I feel very good about it,″ Runyon said in a telephone interview. He said the long investigation did not affect his ability to run the post office, but ``it kind of wears on your mind a little.″

Runyon said he volunteered to make the payment to avoid the appearance of impropriety.

``I’m certain the postmaster general is greatly relieved. This has been a long ordeal for him. I’m glad that at least for the moment he can go on to the more important business of the Postal Service,″ said Rep. John McHugh, R-N.Y., chairman of the House Government Reform postal subcommittee.

McHugh said his subcommittee probably will seek a briefing on the agreement from the Justice Department but is not likely to call a hearing on the matter.

The $27,550 payment represents the gain on Runyon’s Coca-Cola stock between June 5, 1996, when he signed a federal financial disclosure form showing he owned the stock and Aug. 23, 1996, when he withdrew from the Coke machine talks.

The civil settlement does not admit to any violation of federal law, the Post Office said in a statement.

``At no time was I thinking of my investments when our marketing group was exploring a Coca-Cola alliance. In retrospect, I should have thought about those holdings and recused myself earlier,″ Runyon said in a statement.

He said he withdrew from the Coke talks when told by the agency’s ethics counsel of the possible appearance of a conflict of interest. He then voluntarily sold the stock, which he had bought in 1977 when he was an executive at Ford Motor Co.

Runyon placed his stock in a blind trust in 1989 when he became head of the Tennessee Valley Authority.

In 1992 and 1993, after becoming postmaster general, his financial adviser urged him to get out of the trust because it was not performing well enough, Runyon said. He said he ended the trust in 1994 after lawyers advised him it was not required for the postmaster general.

Later, the talks with Coca-Cola were launched by the Postal Service’s marketing section, Runyon said, and he sat in on some of the discussions.

Postal attorneys then advised him that to avoid a conflict of interest, he should either disqualify himself from the Coke talks or sell his stock.

AP RADIO
Update hourly