JHVEPhoto/iStockBy OLIVIA RUBIN and SOO RIN KIM, ABC News
(WASHINGTON) — As the U.S. Postal Service finds itself at the center of a growing D.C. political battle, newly disclosed details about the head of the agency’s finances have prompted renewed scrutiny over what critics call potential conflicts of interest to the tune of millions of dollars.
Postmaster General Louis DeJoy’s significant financial ties to the industry in which his agency operates have worried ethics experts and some lawmakers since their initial disclosure three months ago. But the issue resurfaced, along with some calls for an investigation, this week after CNN reported that DeJoy still holds at least $30 million in stock in XPO Logistics, a contractor company that processes mail for USPS. ABC News separately reviewed a federal disclosure report that said DeJoy retained the stocks as of mid-June.
“It’s deeply concerning that he has retained a fairly large portfolio that includes up to $30 million in postal service contractor XPO,” said Walter Shaub, the former director of the U.S. Office of Government Ethics under President Obama and a top government ethics expert. “That particular contractor is a supply chain logistics company that is directly involved in the postal services processing of mail. The potential for conflict of interests are obvious and jump off the page.”
In a statement to ABC News about the XPO holdings and other ethics concerns, DeJoy denied any wrongdoing, saying “I take my ethical obligations seriously, and I have done what is necessary to ensure that I am and will remain in compliance with those obligations.”
Shaub, however, said what he sees as a conflict “absolutely” rises to the level worthy of an investigation.
“I think the inspector general should get involved and figure out why the [USPS] ethics office failed, and I think that the Inspector General should investigate whether [DeJoy] has failed to recuse himself from particular matters that could affect these financial interests,” he said. “I hope Congress will also investigate.”
One lawmaker, Sen. Elizabeth Warren, D-Mass., said she was concerned that, according to CNN, DeJoy has bought and sold stock in Amazon, a competitor to the postal service, since his appointment to lead the agency.
“Postmaster General Louis DeJoy’s investments in [post office] competitors were already deeply problematic,” Warren said in a tweet Thursday. “But his purchase of [Amazon] stock options after his appointment is inexcusable. The [Office of the Inspector General] must investigate this corruption.”
DeJoy’s financial interest in the shipping industry was first brought to public attention in May — around the time he was tapped to lead the postal service — through a financial disclosure from his wife, Aldona Wos, when she was the nominee to be the ambassador to Canada. It immediately posed concerns about financial conflict of interest for ethics experts.
In June, Monty Hagler, a spokesperson for DeJoy, told The Washington Post that he “will comply with any financial divestitures that are required.”
Thursday a spokesperson for the USPS did not respond to ABC News’ questions about DeJoy’s current financial interest in XPO, whether a conflict of interest issue had come up or whether DeJoy has been made to divest any of his assets. In a statement, the spokesperson said that under the federal ethics law, the Postal Service does not require the postmaster general to divest any particular assets. Rather, the postmaster general would be required to divest an asset if a conflict of interest arises, and the agency determines that his participation in the matter is so crucial that he may not disqualify himself.
Shaub questioned how the USPS ethics board, which he indicated would make the call, had apparently determined DeJoy was not subject to those conflict of interest measures.
“I don’t know if it was fear or sloppiness, but they should have insisted on investigating,” he said.
The disclosure report reviewed by ABC News, which was provided by the Washington-based watchdog group Campaign Legal Center, shows that DeJoy earned between $2.2 million and $11.3 million from his XPO assets in the past year. The form said he held between $100,000 and $250,000 in Amazon stocks as of mid-June, as well as stock options to purchase 100 shares in the company, which would allow him to buy shares of the company at just $1,960 a share. The options expire in October this year. He also owned shares in another USPS competitor, United Parcel Services (UPS), worth between $265,000 and $550,000.
Prior to joining the postal service, DeJoy served on the board of directors at XPO, which acquired DeJoy’s company New Breed Logistics in 2014. New Breed Logistics was also a contractor to the U.S. Postal Service.
The developments related to DeJoy’s finances come as the USPS finds itself already at the center of a political storm related to the looming presidential election and the expected surge in mail-in voting the agency will have to process due to the coronavirus pandemic.
DeJoy has come under fire in recent weeks for a series of changes he has instituted at the post office since taking over the top job, which critics say will slow down mail delivery and weaken the system ahead of the 2020 election.
DeJoy was a generous conservative political donor and fundraiser, giving more than $2 million to Trump and various Republican causes in the past couple election cycles. Just this year, he gave more than $360,000 to Trump Victory, a joint fundraising committee between the Trump campaign and the Republican Party.
Thursday, the White House defended DeJoy’s work at the postal service.
“The Post Master General is not a White House nominated position and Lou DeJoy was unanimously selected by the bipartisan United States Postal Service Board of Governors based on his exceptional experience in the private sector overseeing supply chain logistics and transportation support, which is bringing much needed efficiency and accountability to the USPS,” a White House spokesperson told ABC News in a statement.
But for Kedric Payne, general counsel and senior director of ethics at the Campaign Legal Center, the new reported financial details together with the election concerns are a troubling combination.
“The postmaster general risks diminishing the public’s trust in one of the country’s most vital institutions,” Payne said. “When public officials have interests that conflict with the best interest of the public, it invites more scrutiny over moves undertaken by the Administration to slow mail delivery. Taken together, the postmaster general has made changes that threaten voters while he is under this cloud of a potential ethics violation.”
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