The FBI is investigating Postmaster General Louis DeJoy over possible campaign finance violations, report says

Louis DeJoy
United States Postal Service Postmaster General Louis DeJoy speaks during a House Oversight and Reform Committee hearing on Capitol Hill, Wednesday, Feb. 24, 2021, in Washington

  • The FBI is investigating Postmaster General Louis DeJoy, the Washington Post reports.
  • The probe concerns possible campaign finance violations at his previous company.
  • DeJoy was previously an executive at New Breed Logistics before joining the USPS.
  • See more stories on Insider’s business page.

The Federal Bureau of Investigation is probing Postmaster General Louis DeJoy as part of an investigation into potential campaign finance violations committed by leaders of his former company, The Washington Post reported on Thursday.

DeJoy, a prominent GOP donor and logistics executive, was the chief executive of North Carolina-based New Breed Logistics before being selected as postmaster general in mid-2020, joining the beleaguered agency at the height of the COVID-19 pandemic.

The House Oversight Committee had already been investigating allegations that DeJoy and other executives encouraged and gave bonuses to employees who donated money to Republican political candidates during DeJoy’s tenure at New Breed.

Read more: Pelosi and Trump used a fraudulent trick to raise money – and a guy faces 20 years in prison partly for doing the same thing

At congressional hearings in 2020, DeJoy repeatedly denied any wrongdoing in connection with campaign contributions made by him or other New Breed employers. A representative for DeJoy confirmed the FBI probe, which has included interviews with multiple current and former New Breed employees and a subpoena to DeJoy, according to the Post.

“Mr. DeJoy has learned that the Department of Justice is investigating campaign contributions made by employees who worked for him when he was in the private sector,” DeJoy spokesman Mark Corallo told the Post about the FBI investigation. “He has always been scrupulous in his adherence to the campaign contribution laws and has never knowingly violated them.”

A Post investigation published in September 2020 detailed claims from former New Breed employees that DeJoy and other top executives pushed employees to donate money to Republican candidates, then covered the cost of those donations in the employees’ bonuses.

Such activity could run afoul of federal laws banning so-called pass-through or straw donations, in which one person makes donations on behalf of another. Straw donations enable donors to sidestep legal limits on individual campaign contributions.

“Louis was a national fundraiser for the Republican Party. He asked employees for money. We gave him the money, and then he reciprocated by giving us big bonuses,” David Young, a director of human resources for DeJoy for 20 years, told the Post. “When we got our bonuses, let’s just say they were bigger, they exceeded expectations – and that covered the tax and everything else.”

An analysis of federal and state campaign finance records by the Post for their investigation found a pattern of multiple New Breed employees donating the same amounts to the same political candidates on the same days. Over the course of a 14-year period, the Post found, employees of the company collectively gave $1 million to Republican candidates but just $700 to Democrats.

Since his appointment, congressional Democrats have heavily scrutinized DeJoy and repeatedly called for the US Postal Service Board of Governors to fire him, both over his ties to Trump and the GOP and cost-cutting measures DeJoy imposed, which Democrats cast as an effort to hobble the agency ahead of the November 2020 presidential election.

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After a chaotic year, Biden moves to reclaim the USPS, despite a defiant Postmaster General Louis DeJoy

Louis DeJoy
U.S. Postmaster General Louis DeJoy testifies before a House Oversight and Reform Committee hearing on slowdowns at the Postal Service ahead of the November elections on Capitol Hill in Washington, U.S., August 24, 2020

  • Postmaster DeJoy testified Wednesday at a House Oversight Committee hearing on the postal crisis. 
  • The same day, Biden nominated three people to open positions on the agency’s governing board.
  • If all are confirmed by the Senate, the board would potentially have the votes needed to oust DeJoy
  • Visit the Business section of Insider for more stories.

After weeks of mounting pressure from Democrats, President Joe Biden named three nominees to open positions on the US Postal Service’s governing board Wednesday, as a first step toward securing control of the agency that became a point of contention under the Trump administration last year.

Biden nominated two Democrats and a voting rights advocate – Ron Stroman, Anton Hajjar, and Amber McReynolds – to the agency’s board of governors, according to The Washington Post. Stroman previously served as the deputy postmaster general, Hajjar acted as former general counsel for the American Postal Workers Union, and McReynolds is the chief executive of the National Vote at Home Institute. 

If all three are confirmed by the Senate, Democrats would essentially gain an advantage over the governing body which would have equal numbers of Democrats and Republicans and one Independent in McReynolds, whose organization is beloved by the left, according to The Post.

The board would then have the potential votes to oust the current postmaster general, Louis DeJoy, who drew criticism last summer over an agency overhaul that led to slower mail service and caused many to worry about the agency’s ability to handle the influx of mail-in ballots for the 2020 general election. 

DeJoy has faced repeated calls for his resignation since the summer, with some progressive lawmakers urging Biden to remove the entire board of governors as a way to fill the body with people who would support removing DeJoy, according to Politico.

Biden’s three nominees also mark a significant step toward diversifying the currently all male, mostly white governing body. Of the Biden nominees, Stroman is Black, McReynolds is a woman, and Hajjar provides legal advice to the American-Arab Anti Discrimination Committee, Politico reported. 

In stark contrast to its governing body, the US Postal Service is disproportionately Black and female when compared to the rest of the federal workforce, the Pew Research Center showed in a May 2020 report.

At a House Oversight and Reform Committee meeting Wednesday, Rep. Cori Bush of Missouri questioned DeJoy on the board’s lack of diversity, comparing the group to a “millionaire white boys’ club.”

DeJoy pushed back, reminding lawmakers the president is responsible for nominating board members and the Senate is responsible for confirming them, while noting the agency “would love to have a diverse board.”

According to Politico, DeJoy “appeared perturbed” at times during Wednesday’s hearing by certain members’ lines of questioning and discussion of the critical media coverage USPS has faced during his tenure. 

He remained defiant, telling lawmakers that he’s not going anywhere and intends to be around “a long time” the outlet reported.

But later that day, the White House signaled it may have other plans for the embattled postmaster. 

“He [Biden] believes the leadership can do better, and we are eager to have the board of governors in place,” Press Secretary Jen Psaki said when asked if the president was interested in replacing DeJoy, according to The Hill. 

Lawmakers also questioned DeJoy on his next plan for the agency, which, according to The Post, will include higher prices and slower delivery. He reportedly told committee members a strategic plan for the USPS should be ready by March.

DeJoy acknowledged the USPS experienced major delivery delays during the holiday season, citing problems with the agency’s air transportation network as the cause. 

The agency has reported billions in losses over the last few years, according to Politico, and the postal board chair Ron Bloom told lawmakers Wednesday that the agency is projected to lose around $160 billion over the next decade if reform measures aren’t taken.

“The years of financial stress, underinvestment, unachievable service standards and lack of operational precision have resulted in a system that does not have adequate resiliency to adjust and adapt to changing circumstances,” DeJoy reportedly testified, arguing the agency’s structural problems preceded his arrival.

Most Republicans defended DeJoy during the hearing and accused their Democratic colleagues of vilifying the postmaster general over how the agency handled mail-in ballots leading up to the 2020 election, which led to “tense exchanges” between members at times during the hearing, The Post reported. 

Several of the operational changes made to the USPS last summer under DeJoy were stopped in August, after public outcry over the mounting crisis. The agency’s internal watchdog found in October the changes combined with COVID-19 staffing issues “negatively impacted the quality and timeliness of mail delivery,” according to Politico.

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