Congress started investigations into the Star Route postal delivery service in 1872 in the Grant administration and these continued until the prosecution trials during the Arthur Administration when the fraudsters were prosecuted and the Star Route postal ring was shut down.
Star Route Scandal for kids: What were the Star Routes?
Definition: A Star Route was the name given to a postal delivery route served by a private contractor.
Star Route Scandal for kids: The US Postal Service
By the mid 1800's most of the mail in the United States was transported by steamboats and the railroads, however these methods of transportation had yet to reach the isolated regions of the new territories in the West and South West. The federal government therefore offered lucrative contracts to private carriers to deliver the post via horse, wagon or stagecoach.
Star Route Scandal for kids: History of the Star Routes
The history of the Star Route contactors dates back to an act of March 3, 1845. This legislation established a new mail service that called for private contractors to carry the mail "with celerity, certainty, and security". Contracts for the mail service were awarded to the lowest bidders. These became known as “celerity, certainty and security” bids. Postal clerks shortened the phrase to three asterisks or three stars (***). The mail delivery contract bids became known as star bids, and the routes became known as Star Routes.
The Star Route Scandal for kids: Fraud, Bribery and Corruption
By 1880, there were nearly 10,000 star routes, costing the federal government nearly $6 million a year. The money and enormous profits involved in landing these contracts led to fraud, bribery, collusion and corruption implicating the contractors, postal officials, government officials and politicians. The extent of Star Route Scandal would rock the nation, already reeling from the scandals caused by the Spoils System and allegations of Grantism involving political corruption and greed in government.
The Star Route Scandal: How the Frauds worked
Typically, the Star Route contracts were awarded for four-year terms. The frauds worked as the contractors employed numerous methods to obtain the lucrative postal contracts.
Bribes were exchanged in return for contracts
Fictitious Delivery Routes
Unnecessary expenditures - Claims for improvements to non-existent of scarcely used routes
Illegally increasing mail rates
Some Contractors took the money but didn't deliver the mail
Collusion: Contractor colluded to submit low "straw" bids or ridiculously high bids - default bidding resulted in highly lucrative contracts
Exorbitant fees were charged
Star Route Scandal Investigations and Trial
The Star Route Scandal investigations took place in 1872 and 1876 under President Grant and the frauds were temporarily halted but emerged again during the Hayes and Garfield administrations sparking more investigations. A federal prosecution and trial took place in 1882 urged by President Chester Arthur, that was finally able to shut down the postal ring. The investigations led to 25 indictments and although the trials revealed frauds on nearly 100 Star routes, no convictions were obtained. The Star Route scandal had been defrauded the Post Office of $4,000,000.