Here's the latest twist on the cooperative mail issue -- and it's a doozy.

The Vantage Group and its subsidiaries Vantage Financial Services Inc. and
Vantage Direct Marketing Services Inc. have agreed to pay $4.5 million to
settle civil postal fraud charges. The USPS complaint alleged that while
conducting fundraising programs for nonprofits, the company improperly
mailed 78 million pieces of mail at the reduced nonprofit rate, knowing they
were not entitled to use the rate because the mailings violated the
cooperative mailings rules. Vantage Financial Services is a Boston-based
direct marketing company specializing in providing database and fundraising
management services to non-profit organizations in the United States and
Canada.

"Vantage believes now, as it always has, that we were in compliance with all
U.S. Postal Service regulations," said Vantage Group's executive vice
president, in a prepared statement. "We note with pleasure that the
regulations at issue in this matter have recently been amended by the U.S.
Postal Service and now reflect the position taken by Vantage throughout the
proceedings."

The complaint, filed in 1998, noted that in 1990 the Postal Inspection
Service investigated Vantage for sending illegal cooperative mailings. At
that time, a U.S. Postal Inspector informed Vantage that mailings sent
pursuant to Vantage's standard contract were ineligible for the reduced
nonprofit rate because Vantage had a financial stake in the mailings. As a
result of the 1990 investigation, Vantage and one of its nonprofit clients
paid a postage deficiency to the USPS.

In response to that investigation, the complaint said Vantage revised its
standard contract to make clear that, in the future, Vantage would not have
a financial stake in the programs it conducted on behalf of nonprofit
clients. Based on the revised contracts, the Postal Service permitted
Vantage to mail at the nonprofit rate on behalf of its nonprofit clients.

The complaint alleges, however, that Vantage then entered into secret "side
letters" with many of its non-profit clients, agreeing to take a financial
state in the mailings.  Under its secret side agreements, Vantage improperly
caused tens of millions of pieces of mail to be sent at the reduced,
nonprofit rate, saving the company millions of dollars in postage.

Approximately 22% or $990,000 of the settlement will be paid to Lawrence
Saklad, a former Vantage salesman, who brought this misconduct to the
attention of the government by filing suit under the provisions of the False
Claims Act.
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The MOST AMAZING part of this story??  The new USPS rule dismantling the
protections against cooperative arrangements in fundraising mail would now
make all of the Vantage deals perfectly legal.

P.S. And where do you think the $4.5 million came from?