Postmaster General Faces Intense Scrutiny Amid Allegations Of Political Motives

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Louis DeJoy, depending on who you talk to, is either a Republican political operative beholden to President Trump, or a savvy businessman who's the right person to fix what's broken at the U.S. Postal Service. When Senators question him this week, they will want to know which narrative is closer to the truth — and whether he is suited to head the service at this time.

A longtime Republican mega-donor, DeJoy's background is in the logistics and shipping sector. A government contract years ago with the Postal Service helped him launch his business. Now he leads that same agency and finds himself at the center of a fight over whether the ballots of voters will be delivered and counted fairly in this year's presidential election.

Since he started in the job June 15, DeJoy launched a series of organizational shake-ups that have attracted bipartisan criticism that the changes would delay mail delivery just as more Americans are expected to vote by mail. Earlier this month, he announced an "organizational realignment" at the agency, which lost $9 billion last year. These changes included a reduction in employee overtime hours and the elimination of postal sorting machines.

Then, President Trump weighed in. He said that he opposes additional funding for the Postal Service because he wants to make it harder to expand voting by mail — ostensibly to prevent voter fraud, for which there is no evidence.

Amid the furor that followed, DeJoy pledged to put changes on hold until after the election.

"To avoid even the appearance of any impact on election mail, I am suspending these initiatives until after the election is concluded," DeJoy said in a statement.

Ronald Stroman, a former Deputy Postmaster General, told NPR's All Things Considered that, regardless of DeJoy's motivations, "The question is, what is the effect of what he is doing? And if the effect is to slow the mail, to potentially disenfranchise people, voters across the country, then I think we are all right to say these are initiatives that should certainly be halted."

A spokesperson for the Postal Service declined to comment for this story.

Postmasters and patronage

As far back as the 2000s, critics have accused DeJoy of using his political connections for profit, given that his former company relied on government contracts — including from the U.S. Postal Service — for a substantial portion of its revenue.

Over the years, his house in North Carolina, nicknamed "The Castle" — not least for its staircase painted with 24-carat gold leaf — became a desirable location for Republican fundraisers. He hosted fundraisers there for a number of prominent politicians, featuring guests like Sen. Richard Burr, the late Sen. John McCain, former Alaska Gov. Sarah Palin, and former New York City Mayor Rudy Giuliani.

During the past five years, DeJoy has contributed seven-figures in political donations: $3.2 million to groups like the Republican National Committee, including more than $1.2 million to support Trump's election campaigns. Other recipients include the National Republican Senatorial Committee, GOP PACs and individual candidates.

Both he and his wife are well-connected: his spouse Aldona Wos is the former Ambassador to Estonia and headed the North Carolina Department of Health and Human Services. In the Trump administration, she has been nominated to become the U.S. ambassador to Canada.

Long ago, DeJoy criticized Donald Trump's leadership style. "That attitude that you are the most important person is self-destructive," he told the Greensboro, N.C., News & Record in 2005, referring to the example Trump set on his television show The Apprentice. "I'd be fired."

But that's water under the bridge.

In Oct. 2017, DeJoy landed the ultimate guest, hosting a fundraiser for the president of the United States at his estate. Trump mentioned DeJoy by name in two of his subsequent appearances in North Carolina: once in September 2019 and another time in February 2020. "Louis DeJoy, one of the most successful people," Trump said on one occasion.

"I love politics. I love supporting candidates," DeJoy told the Triad Business Journal in 2016, though he ruled out getting personally involved by running for office. Voting records indicate that DeJoy voted by mail in North Carolina in the 2004 general election, according to Target Smart, a political data company that works primarily with Democrats.

DeJoy's deep political connections have raised a simple question: Having donated millions to the Republican party and the Trump campaign, might DeJoy do the President's bidding as Postmaster General?

"Most postmasters have come up through the ranks within the Postal Service. I don't view it as a liability," said Rick Geddes, a professor at Cornell University and a visiting scholar at the conservative American Enterprise Institute. "I think it might bring fresh managerial perspectives into the operation of the Postal Service that could be good in the long run."

But Geddes acknowledges that DeJoy's background plays a role in raising suspicions about his motives for postal reform.

When DeJoy was first appointed, it appeared that Trump was more interested in the post office for business reasons than political ones. The president frequently criticized the agency, alleging that it gives preferential treatment to online retailers such as Amazon, whose CEO Jeff Bezos is a frequent target of the president's attacks.

Tim Stretton, a policy analyst at the watchdog group Project on Government Oversight, says DeJoy's history of political contribution raises questions about where his ultimate allegiances lie.

"The fact that he was a clear political donor to the president raises the question: who is he working for?" Stretton said. "He has clear political leanings that favors this administration, which raises questions. Why was he appointed in the first place?"

How DeJoy got the job

DeJoy's path to the job of Postmaster General was made possible by the bipartisan group of men who comprise the Postal Service's Board of Governors, all of whom were nominated by Trump and were subsequently confirmed by the Senate.

The Board of Governors is similar to a company's board of directors - it oversees Postal Service spending, handles long-term planning, and selects the Postmaster General. Four Republicans and two Democrats make up the current board, several of whom come from business backgrounds.

The board's Chairman, Robert "Mike" Duncan, was confirmed in 2018, and is best known as a longtime Republican political operative and ally of Republican Senate Majority Leader Mitch McConnell of Kentucky. His son, Robert M. Duncan, Jr., is also part of the Trump administration — the president named him U.S. Attorney for the Eastern District of Kentucky.

Duncan's history in partisan politics, past statements about alleged voter fraud, and financial connections to DeJoy may come under intense scrutiny from Congressional Democrats. Along with DeJoy, Duncan is set to testify before Congress on Monday.

"I am proud to say that I have always been and always will be a party man," Duncan said in 2007, when he took over as Chair of the Republican National Committee.

Duncan led the Republican party during the 2008 presidential election, and at times using rhetoric similar to President Trump, repeatedly claimed that Democrats engaged in widespread voter fraud. In one fundraising email, Duncan said Democrats, "will soon be trying to pad their totals at ballot boxes across the country with votes from voters that do not exist." After the election, as a handful of congressional races remained undecided, Duncan cited "irregularities" and warned that "the Obama-Biden Democrats and their liberal special interest allies are trying to steal these election victories from Republicans."

On his official Postal Service biography, Duncan touts the fact that as RNC chair, he "raised an unprecedented $428 million and grew the donor base to 1.8 million."

One of those donors was Louis DeJoy.

The future Postmaster gave nearly $30,000 to the RNC during Duncan's tenure, according to Federal Election Commission records.

After the 2008 election, Duncan directed a Republican data firm, and became chairman of two major Republican Super PACs - the Senate Leadership Fund and American Crossroads - according to records he submitted during his Senate confirmation. Both Super PACs have spent tens of millions of dollars supporting Republican candidates and opposing Democrats, including several members of the Senate committee that oversees the Postal Service. American Crossroads also received $25,000 from DeJoy in 2016, during Duncan's tenure there.

Duncan remains a member of the board of both organizations, according to Jack Pandol, a spokesperson for both groups. "Our boards, like most boards, oversee organizational policies, financial management, senior executive compensation and management performance - but are not involved in directing day-to-day operations or projects," Pandol said.

President Trump nominated Duncan to his role overseeing the Postal Service in 2017, and the Senate unanimously confirmed him the next year.

In late 2019, Duncan and his colleagues on the Postal Service Board of Governors were put in charge of finding a replacement for then-Postmaster General Megan J. Brennan, who had announced her retirement.

The Board has said that it whittled down a list of more than 200 potential executives to 14 candidates, who were interviewed. A smaller group of finalists then went through more thorough vetting. Aside from DeJoy, the identities of those candidates remain unknown. NPR reached out to Chelsea Partners, an outside firm that helped vet those candidates, but its managing director declined to comment, citing a non-disclosure agreement. Another firm that worked on the process, Russell Reynolds Associates, is also bound by a non-disclosure agreement, according to Senate Democrats.

Trump Administration Treasury Secretary Steven Mnuchin was also eager to be kept "apprised" of the search "as appropriate," according to records obtained by the group Citizens for Responsibility and Ethics in Washington, and actually met with the Board in February.

"Neither I nor any other Treasury official played any role in recruiting or suggesting Mr. DeJoy for the position of Postmaster General," Mnuchin said in a letter on Thursday. "The decision was made by the Board alone."

Then, the month before the selection was announced, one of the Board's members, David C. Williams, abruptly resigned. Williams later told Congressional investigators, "I had expressed concerns after each of the interviews with Mr. Louis DeJoy. I urged that a background investigation be conducted. And when I resigned, I cited it as one of my reasons for submitting my resignation to Chairman Robert Duncan."

But at the time, the reasons for Williams's resignation were unknown.

DeJoy and Duncan are likely to face skeptical questioning from Congress about the hiring process. Senate Minority Leader Chuck Schumer has raised concerns about Mnuchin's role "through meetings with individual Governors as well as phone calls with groups of Governors." Democratic Representatives Raja Krishnamoorthi of Illinois and Katie Porter of California have also demanded answers from the board about Williams's resignation, suggesting that the Postal Service's leadership has not yet revealed the full truth behind the selection process.

Ultimately, in May, the Board announced its pick of Louis DeJoy. At a public meeting, John Barger, one of the Republican members of the Board, rejected any suggestion that DeJoy was picked because of his political beliefs or connections.

The board cited DeJoy's longtime work in logistics, and the fact that his companies had served as subcontractors for the postal service.

"The committee wishes to emphasize that Mr. DeJoy's selection by our board of governors was unanimous," said Barger, "both Republicans and Democrats embraced this decision ... Louis DeJoy represents the tradition of Postmaster Generals who have worked their way up in life, [and] earned their stripes to lead an organization so wonderful and unique as the United States Postal Service."

A big break — and a roster of complaints

DeJoy made his fortune with New Breed Logistics, a small family-owned trucking company in Long Island, New York run by his father. According to DeJoy's own account, the company initially consisted of three trucks and some trailers. When DeJoy finished college, he told himself he was going to run the company for a year or two to get it back on its feet and then go to graduate or law school. Instead, he ended up launching the company in an entirely new direction — warehousing and crating materials for delivery.

The company, which by then was called New Breed Logistics, got its big break from the very organization DeJoy is now leading: the U.S. Postal Service.

Back in 1992, USPS was launching a pilot project aimed at repairing and inspecting mailbags and fixing the carts and bins that hold stacked mail. The idea was to fix the bags and boxes and send them back to the post office to be reused. The job was lucrative enough for DeJoy to move his dad's old company from New York to Greensboro, N.C. He eventually set up 22 of these mailbag sites around the country.

DeJoy's next big contract was with Verizon. Just about any time Verizon sends out a new cell phone, it it is shipped from New Breed, or its eventual parent company, XPO Logistics. DeJoy also did logistics work for the Department of Defense and big Fortune 500 companies like Boeing.

All this work gave DeJoy experience with the Postal Service. John Barger of the Postal Service Board of Governors has noted that DeJoy's company received the "Quality Supplier Award" from the Postal Service in 1995, 1996, 1997 and 1998. "He was a highly, highly accomplished contractor of the Postal Service," Barger said.

DeJoy was CEO of New Breed Logistics from 1983 to 2014, when a Connecticut-based freight company, XPO Logistics, acquired New Breed for $615 million. DeJoy remained as CEO of its supply chain business for another year, to see the company through the transition, and then served on the XPO board until 2018.

His tenure at both New Breed and XPO is marked by a roster of litigation for employment discrimination, wage- and hour-discrimination, sexual harassment and workplace safety.

In the mid-90s, when DeJoy was New Breed's CEO, the company landed a contract to run a U.S. Army supply terminal in Compton, CA. The local union accused DeJoy of union-busting and making a concerted effort not to rehire longshoremen and warehouse workers who were already working at the terminal. In 1997, the National Labor Relations Board (NLRB) found that New Breed's hiring practices were motivated by anti-union animus. What's more, the NLRB found that DeJoy was a central figure in those hiring decisions.

In 2008, 27,000 members of the International Association of Machinists (IAM) working at Boeing went on strike for nearly two months over the airline manufacturer's plans to outsource 5,000 union jobs — jobs delivering parts delivery and maintaining facilities — to New Breed, which was a non-union shop. DeJoy was CEO at New Breed at the time. Eventually, workers returned to their jobs after Boeing agreed to keep the 5,000 jobs while still allowing New Breed to deliver parts to Boeing factories.

In 2013, the Equal Employment Opportunity Commission (EEOC) brought suit against New Breed for sexual harassment and discrimination against employees at one of its Memphis warehouses. A Tennessee jury awarded $1.5 million to four New Breed temporary warehouse workers who alleged not only that they had been harassed, but also fired for lodging their complaints. Tasha Murrell, who was working at that Memphis warehouse at the time, says she experienced that sexual harassment first hand.

"I have worked there several years. I mean, it is a horrible company to work for," she told NPR. "I witnessed first hand sexual harassment, pregnancy discrimination, poor working conditions."

New Breed was in the news again when The New York Times launched an investigation into pregnancy discrimination at the same New Breed/XPO warehouse where Murrell was working. The story focused on four women working for the company, all of whom had suffered miscarriages after supervisors refused their requests for light duty during their pregnancies. Murrell was one of those women. This took place when DeJoy was still CEO at New Breed.

In a statement, an XPO spokesperson said the company launched an independent investigation at the warehouse and implemented new programs and policies to address the issues of pregnancy care and family leave.

When XPO acquired DeJoy's company in 2014 and took over the Memphis plant, Murrell said that workers hoped that that conditions would improve, but they didn't.

"This warehouse is just like a basic brick building with no windows, with a small amount of ventilation, no heating, no air conditioning. I mean, it's a horrible company. I call it a modern day plantation sweatshop," Murrell said.

These don't appear to be outlier episodes. Since 2000, New Breed/XPO and its subsidiaries have racked up 17 wage-and-hour violations, with fines totaling $41 million. They have been fined half a dozen times for employment discrimination and labor relations problems, and 30 times for health and safety violations. DeJoy retired as chief executive of XPO's supply chain business in 2015 and remained a member of the XPO board until two years ago. Last year, XPO closed the Memphis warehouse where Murrell worked saying it was a simple business decision. The company said it found jobs at other Memphis warehouses for the displaced workers.

DeJoy may not have foreseen the political storm that has erupted over the actions he's taken in the few months he's led the US Postal Service. But as a businessman, he is no stranger to controversy.

Copyright 2020 NPR. To see more, visit https://www.npr.org.

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