USPS inspector general report criticizes PMG DeJoy

Washington Postal Scene by Bill McAllister

Postmaster General Louis DeJoy has given yet another signal that he wants to remain head of the United States Postal Service.

The former North Carolina business executive has agreed to sell stock valued at more than $34 million in order to avoid conflict of interest allegations.

That seems to reinforce comments that DeJoy, a major financial supporter of President Donald Trump, recently made that he wants to remain head of the Postal Service, regardless of who wins the Nov. 3 election.

There are major postal issues unresolved that promise to demand much of the new postmaster general’s time.

On Oct. 20 the Postal Service’s internal watchdog sharply criticized postal management for its handling of a series of operational changes the agency implemented as DeJoy took office in June.

In a report prompted by a congressional request, the Postal Service’s Office of Inspector General found that widespread “confusion and inconsistency” resulted from the “very limited and almost exclusively oral” guidance that postal workers were given about the changes.

The report found that there was no deliberate effort by DeJoy or others to slow mail. But poor leadership and communications led to serious mail delivery issues, the report said.

When the effects of many postal workers sidelined by the COVID-19 pandemic were included, the operational changes “negatively impacted the quality and timeliness of mail delivery nationally,” the report said.

Mail service “significantly dropped” in July, the report said, adding that mail service had begun to recover as of early September.

Democrats in the House of Representatives, who had clashed with DeJoy over the changes at an Aug. 24 hearing, expressed concern over the inspector general’s report.

“Today’s report confirms that Postmaster General Louis DeJoy’s sweeping changes — which were hastily implemented without analyzing their potential impact — caused serious delays across the country,” said Rep. Carolyn Maloney, D-N.Y., who chairs the House Committee on Oversight and Reform.

“The IG found that the Postal Service was not fully forthcoming with Congress and the American people, calling into question whether the Postmaster General is continuing to mislead Congress and the American people to this day,” Maloney added in her Oct. 20 news release.

Robert M. Duncan, chairman of the Postal Service’s board of governors, took issue with the IG’s conclusions.

“As an initial matter, we do not agree with the premise that underlies your report,” Duncan said about the initiatives that occurred as DeJoy took office.

Duncan said the board views the changes — removing mail sorting machines and collection boxes, ending extra delivery trips — as normal “blocking and tackling” maneuvers the USPS makes each year in an effort to meet its financial plan.

The chairman also expressed pleasure that the inspector general had found that DeJoy “met all ethical requirements concerning his position as PMG.”

The report said the inspector general was continuing to examine some questions about DeJoy’s holdings.

Citizens for Responsibility and Ethics in Washington (CREW) disclosed Oct. 15 that the Office of Government Ethics had issued a certificate of divestiture on Oct. 9 for the postal chief to sell his extensive holdings in XPO Logistics, a Connecticut that firm acquired DeJoy’s New Breed Logistics firm in 2014. CREW is a nonprofit U.S. government watchdog organization based in Washington, D.C.

XPO has logistics contracts with the Postal Service, and that has prompted some of DeJoy’s critics to raise conflict of interest issues.

According to the certificate posted by CREW, DeJoy agreed to sell 355,000 shares of XPO stock plus two options to purchase another 95,000 shares.

XPO shares were selling at $97 on Oct. 19.

“The Office of Government Ethics determined that it was necessary for DeJoy to divest in order to comply with the federal conflict of interest statutes, regulations or other such provisions,” CREW said in a news release.

“The Postal Service is confident that the OIG’s ongoing review of this process will confirm the Postmaster General’s full compliance with ethic laws and regulations,” Postal Service spokesman David Partenheimer said.

Partenheimer also said DeJoy had recused himself from matters involving XPO on July 21 and had not been involved in any XPO matters before then.

CREW was an early critic of DeJoy’s stock holdings, stating in an Aug. 21 press release that the new postmaster general “appears to be at risk for violating the primary criminal conflict of interest statute after failing to divest significant financial interests in two companies directly affected by the work of the United States Postal Service.”

In an Aug. 24 appearance before the House of Representatives’ Committee on Oversight and Reform, DeJoy said his holdings had been reviewed by the Postal Service’s ethics office and he had complied with “all ethical requirements.”

DeJoy said the issues his critics were raising represented “a very, very small portion of the Postal Service’s business I have nothing to do with.”

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