August 19, 2020
Treasury Secretary Stephen Mnuchin met with the United States Postal Service Board of Governors in February to discuss the search for a new Postmaster General as part of his larger campaign to exert influence over the USPS, according to documents obtained by CREW.
On December 10, 2019, Mnuchin met with the Chairman and CEO of UPS, David Abney, who also happens to be a major Trump donor. Less than two weeks later on December 23, Mnuchin wrote the USPS Board of Governors, asking to be “kept apprised of the progress” on the search for a new Postmaster General. On March 31, Robert Duncan, the chairman of the USPS Board of Governors (who runs a pro-Trump super PAC) replied to Mnuchin saying that the board met him on February 6 about the search, and confirmed that they were hiring a firm to evaluate postal service pricing.
In Mnuchin’s letter to the board of governors, he had requested an analysis of USPS’s “pricing structure in the e-commerce ground package delivery market.” He mentioned that FedEx experienced a decline in operating results because of the competitive pricing environment. It seems that Mnuchin was angling for higher USPS prices, not just to keep the agency solvent but also to give a boost to UPS and FedEx, companies with close ties to the Trump administration. Both companies have been featured prominently by the Trump administration, and even promoted as the backdrop to Trump’s celebration of America’s truckers, and “Remarks on Rebuilding of America’s Infrastructure.”
It’s clear that Mnuchin had a candidate for Postmaster General in mind, who was personally invested in USPS competitors. The Washington Post reports that Louis DeJoy, the eventual pick, was recruited by Mnuchin. DeJoy owned between $265,000 and $550,000 in UPS stock when he was hired, which he divested upon starting as Postmaster General, though he maintained between $30 and $75 million in assets in other USPS contractors and competitors. DeJoy also had a history as a massive Trump donor and as national finance chairman for the RNC.
DeJoy was selected as Postmaster General in May, and in June, became the first person in decades to lead the USPS without prior experience as a letter carrier or working within the agency. Despite widespread concern regarding DeJoy’s qualifications, Mnuchin praised his appointment stating, “Louis DeJoy’s knowledge of supply chains, logistics, and management make him an outstanding choice to serve as the 75th Postmaster General of the United States.”
According to CNN, which first reported that Mnuchin had been briefed about the search, these briefings had not happened in previous appointments. The CNN report did not contain the request or the format of the briefings, and the Treasury Department declined to comment on the briefings.
In just two months leading the USPS, DeJoy’s actions could potentially cripple the agency from within and sabotage voting by mail amidst a global pandemic. They include cutting overtime, consolidating management power within the agency, changing policy related to the pricing of mail-in ballots, and removing mailboxes and sorting machines out of use.
But DeJoy’s actions could also set up a windfall for FedEx and UPS, which have close financial ties to USPS, but are also its competitors. DeJoy has publicly remarked that “there are competitive alternatives to every product that we offer,” and that USPS will need to ”keep pace.” If DeJoy is planning to run USPS more like its commercial competitors, that could boost their business.
In the national outrage that followed DeJoy’s policy changes and obvious conflicts, the House Oversight Committee announced that it would hold a hearing with DeJoy and Chair of the USPS Board of Governors Robert Duncan on August 24th regarding DeJoy’s potential conflicts of interests and actions to undermine voting by mail.
More recently, after CREW and Common Cause Wisconsin’s letter to Chairman Ron Johnson (R-WI), his Senate Homeland Security & Governmental Affairs Committee announced a hearing on Friday, August 21st with Postmaster General DeJoy. The same day that the Republican-led committee invited DeJoy to testify, he made a statement partially reversing his controversial policies. Despite DeJoy’s purported suspension of his planned changes until after the election, more oversight is needed to ensure he follows through.
The limited set of documents produced by the Treasury Department suggest that there is more to learn about Mnuchin’s role in DeJoy’s hiring. CREW has sued the Department to obtain additional responsive documents, but Congress can and should investigate the circumstances of DeJoy’s recruitment and appointment as Postmaster General despite obvious partisan ties and financial conflicts of interest.