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The PostBus scandal: Why a Swiss national icon is taking a beating

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The PostBus scandal: Why a Swiss national icon is taking a beating
Photo: PostBus Switzerland
08:51 CET+01:00
Switzerland's much-loved yellow Post buses have been plying routes all over the alpine country for over 150 years but a recent scandal has taken much of the sheen off a national institution.

What is the scandal all about?

PostBus, a subsidiary of the 100%-government owned Swiss Post, used irregular accounting practices to divert profits from its subsidized regional transport business into other profit-making parts of the business.

By failing to disclose those profits, the enterprise illegally harvested around 90 million francs in subsidies from federal and regional authorities from 2007 to 2015, although Swiss media say the practice may have continued into 2016 and 2017.

Some 13 million francs have already repaid with the outstanding amount being 78.3 million francs. PostBus subsidies of around 15 million francs for 2016 are also set to investigated.

How did PostBus hide its regional transport earnings?

Swiss Post is made up of subsidized and non-subsidized divisions. Profits from the subsidized regional transport division (PostBus Switzerland) were tracked as “miscellaneous” earnings while fake costs – such as those for new tyres that were never delivered– were invented to hide PostBus Switzerland income.

Some 200,000 such bookkeeping anomalies are thought to have been tucked away in the ledgers.

Photo: PostBus Switzerland

Why is this a problem?

As a subsidised enterprise, PostBus Swtizerland is legally forbidden from turning a profit. By hiding earnings from this division in other profit-turning areas of the business, PostBus illegally obtained millions of francs in subsidies.

Why did PostBus cook the books?

The reasons remain cause for speculation. Swiss media outlets have speculated that the bonuses of some PostBus staff may have been higher as a result of the accounting tricks, something denied by Swiss Post.

According to Swiss daily Blick, however, the transport business fudged its figures because it was under pressure from its parent company Swiss Post to notch up earnings. While PostBus operates other businesses including tourist and school services, the regional transport wing makes up 85% of the business and as such it was the only real possible source of any profits, Blick has argued. But Swiss Post CEO Susanne Ruoff said on Sunday the irregular accounting at PostBus and business pressures at Swiss Post are two different issues.

What was the money used for?

In a February 6th press release, Swiss Post said PostBus used the money received from subsidies for ongoing operations and investment. Swiss Post has also said that all the available evidence suggests no one gained personally from the income stream. However, this is still a subject of investigation.


A self-driving shuttle is one of the Post investments. Photo: Swiss Post

 

How were the accounting anomalies discovered?

PostBus was restructured in 2015 and 2016 into seven divisions in what former finance director Pascal Koradi told Swiss daily NZZ was a part of a drive towards greater transparency. In the wake of that restructuring, a wary federal transport ministry thoroughly reviewed the Swiss Post subsidiary and uncovered the irregular accounting.

How has the post reacted?

When the federal transport ministry confronted Swiss Post in November 2017, it promised that the 78 million francs from undeserved subsidies would be repaid. PostBus director Daniel Landolf, originally set to retire in April, and finance director Roland Kunz both stepped down on February 6th when the scandal went public.

But on Sunday, Swiss Post CEO Susanne Ruoff told the Blick newspaper she would not stand down despite mounting pressure for her to do so. She rejected reports she had known about the accounting practices at PostBus since 2013, saying had not known about them until November 2017 and that she had immediately set up a taskforce as soon as the PostBus scandal had come to light.

Her chief ambition was to fully clarify what had taken place.

She refused to name anyone as responsible for the scandal, saying investigations were still ongoing and repeated that money received in subsidies would be paid back.

Federal councillor and transport minister Doris Leuthard on Monday came out in support of Ruoff, saying the facts had to be established first but noting heads would have to roll if the law had been broken

So what happens next?

The board of Swiss Post will meet this week to discuss Ruoff's future while the transport commission of the National Council is set to tackle the issue in March. Internal Swiss Post investigations are set to continue until the summer.

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