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difficult to envision a Postal Service that does not include the fundamental Inspector function as it has existed in one form or another since colonial times. It is also not readily apparent that dramatic change in the Inspection Service is needed now. The Inspection Service is uniformly recognized, both domestically and internationally, as a model practitioner among law enforcement agencies. This is not because it is federal in nature but because it is effective in action. Its high reputation is founded on a record of professionalism, integrity, and results. Few agencies, of any size, can compare to the Inspection Service in terms of investigative efficiency as measured by successful court action. More than 90 percent of Inspection Service cases brought to trial are concluded in convictions.

The reputation and respect Inspectors have earned over the years has caused them to be used in all types of sensitive investigations on behalf of the U. S. Government. The Department of Justice requested the services of Postal Inspectors to lead the investigations into the incidents at Ruby Ridge, Waco and in the Martin Luther King assassination. The independence of the Inspection Service, as not being a part of either the Justice or Treasury Departments, has proven to be a valuable asset.

We believe that this success is, in sizeable part, a direct result of the historic integration of Inspection Service operations into the fabric of the Postal Service. Inspectors live and breathe the mail. They understand the workings of the mail system and the interplay of its parts as no other security and law enforcement agency could. They are working partners with postmasters, clerks, carriers, and all postal employees in ensuring the safety, security, and integrity of the mail, the people who move the mail, and the organization that supports both. It is also probably true that Postal Inspectors are the most 'local' of all federal law enforcement officers. This is a natural by-product of their integration into the mission of the Postal Service. Every post office, every mail collection box, every employee, indeed, every home and business mail receptacle is made more safe and secure under their watchful eye. This intense local focus combined with their expertise in matters of the mail and operations contributes to the significant partnerships that exists between the Inspection Service and state

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and local law enforcement agencies. It is also of great utility in the many joint projects conducted by the Inspection Service with their counterparts in other federal agencies, the military, and even with foreign posts and investigative bodies.

Mr. Chairman, in your invitation to today's discussion, you indicated that the increasingly commercial operations of the Postal Service might raise competition policy questions about the role of the Postal Inspection Service. If I may paraphrase that issue, we might ask, "Does the Inspection Service provide an unfair competitive advantage for the Postal Service?" I think the record shows that the answer is no.

As I have noted, the Inspection Service and its antecedents have been protecting the mail for centuries. During that time, the Postal Service has had numerous products that have faced competition. In 1913, for example, we began parcel post service, and in 1970 we introduced a pioneering new service called Express Mail. Subsequently, both of these markets have grown considerably; however, the Postal Service's market shares have not kept pace with the competition. The presence of the Inspection Service has not deterred private sector competitors from literally monopolizing these markets.

On the other hand, in recent years, it has become clear that the Postal Service has shown new competitive strength across all of its markets. This success properly belongs to the nearly 800,000 career postal employees, including Postal Inspectors, who have raised customer service and satisfaction to record levels and who have contributed to the financial success of the Postal Service that has allowed us to lower the real cost of postage by keeping successive postage rate increases well below the rate of inflation.

The major benefit of the Inspection Service does not lie in the marketplace but in its support of congressional oversight for the mail and for universal service. From consumer fraud, to child pornography, to physical security of property and the mail, the Inspection Service has been an effective agent for ensuring that the will of the Congress and the American people is reflected in the conduct of the nation's mail. Furthermore, its dedication and support have helped provide the

security and confidence needed to maintain a universal delivery system that fairly serves every citizen.

We are aware of other suggestions that would alter the role, location, or charter of the Inspection Service. Some theorists believe that federal law enforcement agencies of all pedigrees should be consolidated under a single agency. In many instances, and certainly with the Inspection Service, this would tend to dilute the unique perspective and expertise that present arrangements now provide. In effect, the marketplace of specialized law enforcement activities we now enjoy would become a centralized collective - a federal police agency.

It has also been suggested that the Inspection Service and its budget might move to another agency, without any change in its mission. At its heart, this suggestion attempts to transfer current postal obligations to the backs of taxpayers. In keeping with the same philosophy upon which the Postal Service has consistently declined billions of dollars in public service subsidies for which it is eligible, we reject this thinking as well.

Finally, some seem to believe that the Inspection Service provides a governmental aura for the Postal Service that private firms do not have. The truth is the Postal Service is a federal entity, and our mandate carries with it both advantages and disadvantages in the marketplace. We believe firmly, however, that no private-sector company would care to trade places with us because the shortcomings outweigh the benefits. We have acted on that belief before this Subcommittee by seeking changes in our legislative charter.

In summary, we believe the Inspection Service provides a distinct public service that is effectively conducted as currently organized. History and prevailing market results do not support arguments that the present arrangement provides the Postal Service with unfair competitive advantage. In fact, the opposite seems much more likely. Therefore, we believe it is in the best interest of customers, employees, and the American people to retain an effective Postal Inspection Service as an integral part of the United States Postal Service.

Mr. Chairman, that concludes my testimony. I would be happy to respond to your questions.

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Mr. MCHUGH. Mr. Weaver, the agenda does not call for you to make a formal statement. I think you are aware of that. But we appreciate your being here and I'm sure there will be questions that we would want you to respond to. And even if we don't, you should.

Mr. WEAVER. Thank you.

Mr. MCHUGH. OK. Great. We'll get back to you.

I think it would be wisest to just proceed through all of the opening statements and then we can just open to general questions. With that, Jim Campbell would be next, sir.

STATEMENT OF JAMES I. CAMPBELL, JR., ATTORNEY, POSTAL POLICY SCHOLAR

Mr. CAMPBELL. Thank you, Mr. Chairman and members of the subcommittee. Thank you for your kind remarks, Mr. Chairman, probably uncalled for, but anybody who struggled through the footnotes is entitled to say his piece.

As you know, I have been counsel to the private express companies for about 25 years, almost since they first started. In my statement I tried to give you a sense of how, from a private express standpoint, we have looked at the activities of the Inspection Service as they affect us.

In my statement, I make a couple of introductory comments, which I'd like to emphasize.

First, to the extent that there are any problems identified, I don't feel that the cause lies in the administration of the Inspection Service itself. In my personal experience, I've never had an instance in which I felt the inspectors were acting in an unreasonable or unfair or improper manner. I think that the cause lies more within the institutional framework in which they operate, as I've tried to make clear in my statement.

Second, I am very well aware that enforcement of the monopoly is not the main task of the Inspection Service; that the Inspection Service has maintained the security of the mails for, as you said, 200 years; and that this is a public service that we have all benefited from. I wouldn't want my statement to suggest otherwise.

What I've tried to do in our statement is to give you some of the details of the history of our relationship with the Inspection Service over the last 25 years, but also the benefit of the legal research that we've necessarily done to try to understand what's going on. That's why all the footnotes.

As nearly as I can tell, the search and seizure power-and that's what we're talking about, use of Government power here against private competitors-that power was given to the Post Office Department in 1872, almost certainly without debate and without any clear intent.

As nearly as I can tell, the administration of this power vis-a-vis private competitors was not a major issue, was not a controversial issue, all the way through the life of the Post Office Department, that is through 1970. There are very, very few cases, very little controversy that I've discovered.

The real problem arises in the 1974 Postal monopoly regulations which were adopted by the Postal Service and which really were

different in kind from anything the Post Office Department had done.

Now, as I was writing this statement, I did not really intend to focus on these regulations, but the more I got into it and the more I thought about all this past history that I remember, the more I realized that really it was those regulations that put the Inspection Service in the business of harassing customers of private express companies, for two reasons.

First, those regulations take such a complicated view of the monopoly that the regulations depend upon administrative enforcement for their effectiveness, and hence the Inspection Service has to enforce.

Second, the regulations, by their nature, are very intimidating, very coercive. They basically tell mailers, "You have to cooperate with the Inspection Service, regardless of what you think is reasonable, regardless of what you think the law is, or you may face some serious consequence," and so mailers have cooperated, much more, perhaps, than they wanted to.

I certainly won't go through it, but if you look back at the history of what has gone on-and I could give you much more documentation if you wish-but if you look at the history of the last 25 years I think it is fair to say that the investigative powers of the Postal Service have been used in a manner which intrudes upon the mailers and the customers of private express companies to a greater degree than Congress envisioned or probably authorized.

I think it is fair to say that effect of this has been to work against what, at least in retrospect, was sound public policy—a certain desirable level of competition.

I think that there is, nonetheless, some merit in the position argued by the Postal Service that, after all, the Postal Service is only using the tools given them by Congress to do the job that Congress has mandated. They have protected revenue and universal service. I think that really what is implied by this history is a need for Congress to clarify some of the aspects of the institutional framework of the Postal Service, and I have four suggestions.

One is that the monopoly is far too complicated today. It would be highly desirable to simplify the monopoly so it does not depend upon so much administrative enforcement. And this is not so difficult. Many other countries have done so. H.R. 22 has a proposal along these lines that would pretty much do it.

Second, I think that the enforcement of the monopoly ought not to be committed to somebody that has a commercial interest. This is just fundamental fairness. I think that enforcement of the monopoly could be committed to the Department of Justice. I know Treasury is another possibility. But somebody other than the Postal Service, itself.

Now, this could be done either by taking this small function out of the Postal Service or by moving the Inspection Service. I have no particular opinion on that, but I think that the Postal Service ought not to be enforcing the monopoly.

Third, I think that the administration of the monopoly—that is to say the rulemaking power-ought not to be handled by the Postal Service, either. I think that with a simplification of the monopoly you have much less need for rulemaking, for administration, but,