CRM (202) 514-2008 TDD (202) 514-1888

POSTMASTER GENERAL AGREES TO PAY FINE IN CIVIL SETTLEMENT FOR FINANCIAL CONFLICT OF INTEREST WASHINGTON, D.C. -- The Justice Department's Public Integrity Section announced today that United States Postmaster General Marvin T. Runyon has agreed to pay a $27,550 fine in civil settlement of a financial conflicts of interest violation. The settlement papers filed today, in U.S. District Court for the District of Columbia, ends a Public Integrity Section investigation that began in September 1996. The civil settlement grew out of a criminal investigation into allegations that during 1996, at a time when he owned substantial amounts of Coca-Cola common stock, Runyon attended meetings and participated in discussions in connection with a proposed strategic marketing alliance between the Postal Service and the Coca-Cola Company. The Government's complaint alleges that Runyon's action violated the federal financial conflicts of interest statute (18 U.S.C. ​ 208), which prohibits a federal official from knowingly participating personally and substantially in a matter in which he has a financial interest. Civil settlement is an alternative disposition for non-willful violations of Section 208 under a penalty statute, 18 U.S.C. ​ 216, that also provides misdemeanor sanctions for non-willful violations and felony sanctions for willful violations. In agreeing to the settlement, Runyon denied that his participation in the Coca-Cola matter was "personal and substantial." He also asserted that he was entitled to rely on Postal Service ethics officials to alert him to any conflict of interest, and that his potential financial interest in the proposed alliance was too attenuated to violate Section 208. However, Runyon admitted that he knew of the prohibitions of Section 208, and that he nevertheless became involved in moving the strategic alliance proposal through the Postal Service. In his Answer to the government's Complaint, Runyon also stated that he agreed to the settlement to "demonstrate his willingness to accept responsibility for his limited official participation in a matter in which he could even be perceived as having the appearance of a financial interest." The $27,550 fine provided for in the settlement agreement represents the increase in value of Runyon's Coca-Cola stock

between a time when he should have recognized the conflict (i.e., when he signed his 1995 Financial Disclosure Report) and the time he actually disqualified himself from involvement in the alliance. In paying the fine, Runyon forfeits the potential profit he obtained from failing to comply with Section 208 during that period. The matter was handled by the Criminal Division's Public Integrity Section. The investigation was conducted by the Postal Inspection Service. ### 97-450