Yellow gloss tarnished
PostBus was an exemplary company. Then a subsidy scandal erupted which was unprecedented in Switzerland. The matter has still not been fully resolved. How did this situation arise?
PostBus travels through mountain passes, providing transport to the most remote valleys and far-flung villages. It covers areas where bakers, butchers, village shops and, yes, even the Swiss Post Office have long since closed their doors. A bus, even if only every few hours, is part of universal service in Switzerland. The yellow postal buses are a symbol of public service. They connect towns and villages and, in a sense, hold the country together.
The yellow gloss has now been tarnished. The drivers wearing light yellow shirts no longer just have to explain to passengers where to get off or change buses. They now have to tell them why their employer fraudulently obtained subsidies for many years. PostBus systematically moved money around using accounting tricks to make the subsidised bus routes seem less profitable than they really were.
The upshot was that federal government and the Swiss cantons paid excessively high subsidies for almost ten years, from 2007 to 2015. They handed over 92 million Swiss francs too much, according to Federal Office of Transport (FOT) calculations. The FOT has already demanded the repayment of some of that amount – 13.7 million – as part of a previous adjustment. PostBus wants to repay the rest of the money, too. But the figure could yet rise. The FOT has revealed that PostBus also received undue subsidies in the post-2015 period, effectively right up to the present day.
The only thing that has changed is the procedure. Swiss Post established a holding structure in 2016. The FOT criticised this move because it believed the company’s units would charge each other inflated prices for reciprocal services. Was the intention simply to obtain subsidies by fraudulent means using a subtle trick? This is what the ongoing investigation aims to establish. Swiss Post repeats this sentence almost every day at the moment. The current investigation is seeking to determine whether Susanne Ruoff, the Swiss Post CEO who resigned in June, and her predecessors turned a blind eye while millions of Swiss francs in public funding was fraudulently claimed. It is also looking into whether the dismissed PostBus CEO was sacrificed as a scapegoat. Finally, it is seeking to find out why all of this happened at all. The motive in this case is the biggest mystery.
PostBus ultimately deceived its own owner. The fraudulently obtained money stayed in the company. What lay behind it all? It is conceivable that some of the PostBus management would have received higher bonuses for improving performance.
The real reason may actually lie in the company’s bizarre dual role. PostBus travels from village to village and receives subsidies in return. But PostBus also takes tourist groups to Burgundy and Piedmont, has bus networks in France and invests in Publibike, a bike hire scheme. The company does not receive subsidies for these activities. The aim here is profit rather than making villages accessible.
The dismissed PostBus CEO also pointed to a “conflict of interests”. Should transport from one village to the next be provided as cheaply as possible to avoid causing unnecessary expense to the taxpayer? Or should public money be claimed where it doesn’t really do any harm to expand and invest in order to achieve internal profit targets? The answer is obvious. Subsidies must be minimised before profits can be maximised. However, operating in that space between public service mandate and market orientation, as well as the organisational proximity of these completely contrasting units, must have led to confusion in this regard.