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Hospital Asked to Justify Use of Nonprofit Postal Rate

Investigation: Agency says rule may have been violated when discount was used to mail petitions.


The U.S. Postal Service has given Community Memorial Hospital 15 days to clarify why it used cheaper, nonprofit postal rates to send out 170,182 petitions in support of a hospital-sponsored ballot initiative.

Community Memorial's proposed November ballot measure seeks to transfer control of the county's $260-million tobacco settlement revenue to seven area hospitals, including Community Memorial.

In response to recent complaints made by Ventura County Supervisor John Flynn, U.S. Postal Service manager Linda A. Deaktor sent a letter to Community Memorial's executive director, Michael Bakst, requesting an explanation about the usage of the bulk rates.

A Community Memorial spokesman said the hospital responded with a letter sent Thursday detailing the reasons why the nonprofit rate was properly used.

If the hospital's reasons for using the nonprofit rate don't satisfy postal officials, Community Memorial will have to pay about $11,379 in unpaid postage, Deaktor said.

"It's really not punitive," she said. "Corrective, not punitive."

In her letter dated May 17, Deaktor questioned the use of Community Memorial's nonprofit bulk rate by a group named Citizen's Committee to Safeguard the Tobacco Settlement.

"It appears that [the group] is a separate organization from the Community Memorial Hospital, which would make it ineligible to use the hospital's . . . nonprofit rates," the letter stated.

Attorneys for the private nonprofit hospital say the organization is eligible to use the special rates because it is part of the hospital.

Last month, more than 100,000 Ventura County residents received a copy of the hospital's initiative, a letter from Bakst and a business reply envelope mailed in bulk. Both the names of the hospital and the organization were featured prominently on the mailing.

Using the nonprofit rate, the hospital paid $12,440 or 7.3 cents per piece mailed. If the materials had been sent using the third-class political postage rate, the mailing would have cost the hospital $23,819.20 or 14 cents per piece, hospital spokesman Mark Barnhill said.

In the letter addressed to Bakst, Deaktor, based in San Francisco, wrote "the material may be an ineligible cooperative mailing" and advised him to explain "why we should consider this mailing eligible for nonprofit rates."

Postal officials would not comment specifically on the materials, but called their inquiry a "routine" response to a citizen complaint.

James R. Parrinello, an attorney for the hospital, called Flynn's complaint "an outrageous abuse of county resources . . . that has nothing to do with county business."

"There was no mystery that it came from Community Memorial Hospital," said Steve Lucas, an attorney also representing the hospital. "Community Memorial's name is on the envelope."

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