'It is still a crime': US Postmaster General, Greta face off over government credit card abuse charges against postal workers

This is a rush transcript from "On the Record," April 3, 2014. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX HEWS HOST: Are postal workers delivering big bills to taxpayers? Earlier this week, we told you about a series of inspector general reports. Those reports finding some postal employees are using government travel cards to pay for everything from gambling to personal travel to bowling.

Now, Postmaster General Pat Donahoe is here to respond. And you are a little bit mad at me?


VAN SUSTEREN: What's the problem?

DONAHOE: The key number is very few. We have 500,000-plus excellent employees in the postal service doing a great job every day.

VAN SUSTEREN: I don't doubt for a second.

DONAHOE: Couple of bad apples. We address them and take care of that. The other key thing is no taxpayer money. We don't take it. We are self-sufficient, and we want to stay that way.

VAN SUSTEREN: OK, a couple of things. I don't agree with that. I think that's just not true. You have a $15 billion loan that you got from the federal government, September 2012. That was the limit, as high as you can go, $15 billion. You haven't paid a dime back of it as of a month ago. You owe the taxpayers $15 billion.

DONAHOE: WE have a plan.

VAN SUSTEREN: Then you have got this woman -- you may have a plan but you still have not paid it back.

Then you have got this woman, who is one of the people who has ripped off the postal service $100,000. Maybe if she hadn't ripped off the $100,000, you could take that $100,000 and pay that $15 billion bill to the taxpayers. So I don't agree on that. You owe the taxpayers money.

DONAHOE: $15 billion. We have a plan in place. We need some legislation and we will fix the entire amount. We can be debt free by 2017. Here's the thing, Greta --


VAN SUSTEREN: Let's talk about that. You say it's congressional legislation holding you back?


VAN SUSTEREN: Congressional legislation is not a defense to a crime. That woman that I'm talking about committed a crime. She didn't get referred to the U.S. attorney's office, not at all. In fact, your lawyer, your general counselor referred it to an inspector general. It took him 13 months to do a report. In that 13 months, she stole more and she didn't have her cards taken away, and you owe $15 billion to the taxpayers. So it's hard for me to have much sympathy. But go ahead, sir.

DONAHOE: Couple of bad apples. Great employees. We do a great job. No taxpayer money.

Here is the situation with the postal service. We are in the hole because we lost about 28 percent of our volume. We have not stood still. Since the year 2007, we reduced the head count by 205,000 employees, adding another five million delivers in that time frame, and bent the cost line by $15 billion. So our people have done a great job. We've been --


VAN SUSTEREN: You know, I don't disagree on that. You know, I don't disagree on that. And I know --


DONAHOE: Here is the congressional issue.


DONAHOE: Every year, we are required by law to prefund retirement health benefits to the tune of $5.5 billion. We have a solution to resolve that, to get -- to actually, eliminate that payment. Go to a point where we will be fully paid on our pensions and our health care.

VAN SUSTEREN: All right.

DONAHOE: And be the best in the country.

VAN SUSTEREN: You know what? I think you and I are talking about two different things. I know there are a lot of good postal workers. I have seen a lot of them. What I'm talking about is you are getting ripped off. The taxpayers are getting ripped off since you owe $15 billion and you haven't paid. What is happening is you are not referring them to criminal prosecutions. You are giving them a letter to pay it back. That is a crime. For whatever reason -- here is an example. A letter dated January 29th, 2009, from the senior vice president general counsel that an employee is ripping off the postal service. And remember, you got $15 billion debt to us. And that it then goes to inspector general who takes 13 months to come back with something, oh, yeah, she is ripping off the postal service. What in the world takes 13 months? What this general counsel should have done, not sent it to the I.G. Should have sent it to the local prosecutor.

DONAHOE: We have a process for that. We collect the money --


VAN SUSTEREN: It doesn't matter if you collect the money. It's still a crime.

DONAHOE: I agree that it's completely unacceptable. And, again --


VAN SUSTEREN: It's a crime.

DONAHOE: From the credit cards, just so you know, a person when they take that credit card, they are on the hook for the bill. We always collect it back --


VAN SUSTEREN: Can you use it like an ATM card?

DONAHOE: You can use it in an ATM for a small cash advances. As a matter of fact, we've eliminated that.

VAN SUSTEREN: How much? How much?

DONAHOE: You used to be able to take $500. We have eliminated that.

VAN SUSTEREN: Every time you take $500 out of your ATM, that, I think, is stealing from taxpayers.

DONAHOE: No, because they have to pay it back. They have to pay it back.


VAN SUSTEREN: Oh, right. You send a letter. You send a letter. After they get caught, you send a letter and say pay it back. Do you think this woman is going to pay this back without that?

DONAHOE: Absolutely. Everything gets collected.



DONAHOE: We have ways to collect. The key thing is --


VAN SUSTEREN: -- if it gets collected, why did it have to go to I.G. counsel, and why are you trying to get money from her?

DONAHOE: It's the process. It's the process.


VAN SUSTEREN: Process? It's a crime.

DONAHOE: The key thing is we have a solution to our problems. Again, we have done everything we can organizationally to cut costs, grow revenue. And we need --

VAN SUSTEREN: Can I -- can I get a commitment from you?


VAN SUSTEREN: That when people steal money from the postal service, rather than go through this long process, you will call the local prosecutor and please investigate this.

DONAHOE: We go through the Department of Justice right now. We have a good --


VAN SUSTEREN: Why wasn't this one done?

DONAHOE: Big difference because, if you steal from the mail, if you get into a fight with somebody, you are prosecuted and fired immediately. This is through a credit card process, that we can collect money back, so it's a little bit --

VAN SUSTEREN: It is still stealing. You don't understand, just because someone pays a debt -- just because someone gets caught for stealing and says I will pay it back --

DONAHOE: We do not condone it. We do not condone it.

VAN SUSTEREN: No, no. I understand that. But just because someone gets caught stealing and suddenly says I will pay it back, that doesn't mean it's not a crime.

DONAHOE: Yes. And it's not a crime -- it's a crime and we prosecute.

VAN SUSTEREN: This woman didn't, but anyway.

DONAHOE: The key thing is big opportunities to do much bigger things from the postal service perspective. We need that congressional action.

VAN SUSTEREN: That's a different issue.

And let me just say to Congress, help this man out. Get him the legislation he needs.

But the stealing thing, that's got to get an indictment, OK?

DONAHOE: I will take care of that. You have my promise.


DONAHOE: Have me back to talk about legislation.

VAN SUSTEREN: Thank you. And, Congress, please help this man out.

Anyway, Postmaster, thank you for joining us.

DONAHOE: Thank you. Thank you. Much appreciated.