8/12/20
Postmaster General Louis DeJoy continues to hold a multimillion-dollar stake in his former company XPO Logistics, a United States Postal Service contractor, likely creating a major conflict of interest, according to newly obtained financial disclosures and ethics experts. Outside experts who spoke to CNN were shocked that ethics officials at the postal service approved this arrangement, which allows DeJoy to keep at least $30 million in XPO holdings. Raising further alarms, on the same day in June that DeJoy divested large amounts of Amazon shares, he purchased stock options giving him the right to buy new shares of Amazon at a price much lower than their current market price, according to the disclosures. This could lead to a separate conflict, given President Donald Trump's disdain for Amazon, and his reported effort in 2018 to pressure DeJoy's predecessor to raise prices on Amazon and other firms, while complaining about its founder Jeff Bezos.DeJoy already faces bipartisan criticism for implementing disruptive changes after taking over the USPS on June 15, including eliminating overtime for many workers. Democrats also claim he is intentionally slowing down mail delivery to sabotage absentee voting in the November election. In 2014, XPO acquired DeJoy's company, New Breed Logistics, for $615 million.
"The idea that you can be a postmaster general and hold tens of millions in stocks in a postal service contractor is pretty shocking," said Walter Shaub, the former director of the Office of Government Ethics, who resigned in 2017. It's illegal under federal law for federal government employees or their spouses to have a "financial interest" in companies that intersect with their official duties. Ethics experts said DeJoy could have mitigated these conflicts by divesting, agreeing upfront to recuse himself from some matters, receiving legal waivers, or even establishing a blind trust. "If you have a $30 million interest in a company, of course it's going to impact you," said Stuart Gilman, who spent 12 years at the Office of Government Ethics, where he was the assistant director. "I would assume that there is a problem here. It certainly doesn't pass the smell test." DeJoy made dozens of stock sales and purchases around the time he started at USPS. He divested at least $100,000 in XPO options, but apparently held onto his larger equity stakes. He also owns options to buy an additional 270,000 shares in XPO, at varying prices in the future.
