The United States Postal Service seriously mismanaged Postmaster General Louis DeJoy’s conflicts of interest from the start, according to documents obtained by CREW via a Freedom of Information Act lawsuit.
The documents show that USPS’s initial decision to allow DeJoy to recuse from matters involving his former company XPO Logistics rather than divesting from the conflict-creating assets was clearly insufficient, given DeJoy’s role as the head of the agency and his later divestment.
DeJoy’s financial interest in XPO Logistics when he began serving as postmaster general was worth at least $30 million—and potentially up to $75 million. In addition, XPO Logistics had multiple contracts with the USPS, and was awarded at least two new contracts in the months after he took office. If DeJoy was involved in awarding the contracts in any way, or if the policy changes he made helped XPO win the contracts, he could face serious criminal liability. USPS’s initial decision to allow him to merely recuse from decisions about XPO, which was clearly insufficient, meant there was an exceedingly high risk of him violating criminal conflict of interest laws.
Ultimately, DeJoy did divest from his stake in XPO Logistics—although the method he used to do so has raised questions—as he should have in the first place.
USPS’s refusal to release these documents prior to the court ruling also raises questions about whether they were trying to cover up how badly they mismanaged DeJoy’s conflicts. USPS claimed that the documents were “pre-decisional” and “deliberative” and therefore privileged. However, the released documents make clear that they represent final decisions and advice to DeJoy about his ethics obligations.
Ultimately, it appears that Louis DeJoy’s conflicts were handled about as badly as ethics watchdogs had feared. He was allowed to continue holding millions of dollars in shares of a USPS contractor, which was awarded additional contracts before he ultimately divested, resulting in significant possible criminal exposure for him, and immensely damaged public trust.