Postal Service Awards Current Postmaster General’s Former Company A $5M Contract
The U.S. Postal Service awarded a $5 million contract to the former company of Postmaster General Louis DeJoy, renewing ethics concerns over the Trump megadonor’s activities.
- CBS News reported that the USPS awarded the contract to XPO Logistics “to move mail for the next 18 months between Norfolk, Virginia, and Evansville, Indiana” and is set to pay “$3.3 million annually to manage its route between the two cities, which are roughly 700 miles apart."
DeJoy continues to own a multimillion-dollar stake in XPO Logistics as of early October. The $5 million deal is the first regular contract for a postal route that XPO Logistics has signed with the USPS in more than a year. XPO's last highway contract with the USPS was in December and was temporary. The one before that was signed in July 2019.
The USPS database shows the contract has one of the highest annual rates out of more than 1,600 contracts the Postal Service initiated with outside firms in its most recent quarter, which is the first full quarter DeJoy has served as head of the agency.
- CBS News reported that DeJoy “joined XPO after selling it the company he founded, New Breed Logistics, in a 2014 deal valued at $615 million” and “was a top executive of XPO before he left its board in 2018.”
- According to his most recent financial disclosure, filed in June, DeJoy’s personal stake in XPO was worth as much as $75 million earlier this year.
- Common Dreams noted that DeJoy only agreed to divest from the company last month:
Under pressure from Democratic lawmakers and ethics groups, DeJoy—who was a top executive on XPO's board before leaving the company in 2018—belatedly agreed last week to divest from XPO, in which he held between $30 and $75 million worth of stock. As CBS noted, the logistics company "still pays DeJoy about $2.3 million a year in rent and expenses for 220,000 square feet of office space he controls in his home state of North Carolina. XPO's lease agreements for DeJoy's properties run through 2025."
- DeJoy came under scrutiny shortly after taking over the Postal Service, due in large part to policy changes that slowed down mail service just ahead of the election, CBS News noted.
DeJoy donated $1.2 million to Donald Trump's 2016 campaign and has been a controversial figure since starting the top position at the post office in June. House Democrats held a hearing in August in which they grilled the new postmaster about operational and labor changes he made in his first months on the job. Those changes, they argued, had slowed deliveries and hurt the dependability of the USPS just as millions of Americans were turning to it to deliver their mail-in Election Day votes during a pandemic.