USPS Chief Investigated Over Alleged GOP Donor Scheme

USPS Chief Investigated Over Alleged GOP Donor Scheme
Postmaster General Louis DeJoy testifies during a House Oversight and Reform Committee hearing on Capitol Hill, August 24, 2020. (Photo: Tom Williams, Getty Images)

One consequence of being named head of a federal agency is that a slew of reporters will inevitably begin digging into the darkest corners of your past. That’s certainly been the experience of U.S. Postal Service Postmaster General Louis Dejoy, for whom the extra sunlight might just prove too bright.

The same financial contributions that undoubtedly aided DeJoy’s rise to postmaster general in July could be his undoing: Speaking to the Washington Post, five of his former employees accused him of engaging in a straw donor scheme; illegally using company bonuses to reimburse them for donating to GOP candidates.

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The practice, used to obscure the sources of political donations, often to circumvent individual donor limits, is both a federal crime and a felony in North Carolina, where the company DeJoy ran until 2014, New Breed Logistics, is based. (The federal statute of limitations is five years, the Post reports, but there is no such restriction under the relevant state law.)

New Breed Logistics was acquired by the Connecticut-based XPO Logistics in 2014. DeJoy stayed on briefly in a leadership role before joining XPO’s board of directors in 2015. He left the board to start a real estate and private equity firm in 2018.

“If these allegations are true, Mr. DeJoy could face criminal exposure — not only for his actions in North Carolina, but also for lying to our Committee under oath,” said Carolyn Maloney, chair of the House Committee on Oversight and Reform, which is investigating the claims.

Maloney added that the Postal Service’s board of governors should “take emergency action to immediately suspend Mr. DeJoy, who they never should have selected in the first place.”

A spokesman for the Postal Service said he was forwarding Gizmodo’s request for comment to DeJoy’s personal spokesman.

Pressed by Rep. Jim Cooper, Democrat of Tennessee, on whether he had financially compensated company executives who donated to the Trump campaign, DeJoy last month said the claim was “outrageous” and untrue. Cooper ended the contentious exchange by asking DeJoy if his “backup plan” was to be pardoned by President Trump.

“I have no comment on that,” DeJoy responded. “It’s not worth a comment.”

In 2015, noted Democratic fund-raiser San Singh Chatwal pleaded guilty to funelling more than $US180,000 ($248,616) in illegal contributors in an elaborate straw donor scheme to three federal candidates, including Hillary Clinton. He was sentenced to probation, 1,000 hours of community service, and fined $US500,000 ($690,600).

Chatwal avoided prison, the New York Times reported at the time, because the judge appeared sway by, among other arguments, the 70-year-old hotelier did not seem to personally benefit from the crime.

DeJoy has been the subject of much controversy since his appointment almost three months ago. Several procedural changes implemented under DeJoy’s watch — restrictions on employee overtime and the decommissioning of hundreds of mail-sorting machines nationwide — have led to backlogs of mail across the country.

A sharp decline in the Postal Service’s productivity, which has been confirmed through leaked internal records, has raised concerns about its ability to manage the unprecedented deluge of absentee ballots expected this election season due to the ongoing coronavirus pandemic.