Postmaster General Louis DeJoy is divesting from XPO Logistics, his former employer and a U.S. Postal Service contractor, the Postal Service has confirmed to Forbes, after DeJoy’s continued funding in XPO got here beneath appreciable scrutiny for being a possible battle of curiosity.
A certificates of divestiture from the Office of Government Ethics dated Oct. 9, which was obtained and made public by watchdog group Citizens for Responsibility and Ethics in Washington, exhibits that DeJoy is divesting from his shares in XPO, and might defer paying capital good points taxes on the sale of his XPO shares.
OGE points certificates of divestiture in instances the place the company directs a federal worker to promote or divest from an asset “in order to avoid a conflict of interest or the appearance of one,” however USPS spokesman David Partenheimer clarified in an e-mail to Forbes Friday that DeJoy’s divestment was “totally his decision” and he was not requested to take action by OGE.
DeJoy requested the certificates of divestiture from OGE on August 14 primarily based on recommendation from the Postal Service Ethics Office, Partenheimer instructed Forbes, and has till Dec. 19 to truly divest from the corporate.
DeJoy’s monetary disclosure varieties present that the postmaster normal had no less than $30 to $75 million invested in XPO, a delivery logistics firm that contracts with USPS and, critics have famous, may probably financially profit if USPS had been to be privatized.
While DeJoy has mentioned that his investments had been cleared by USPS ethics officers and had recused himself from issues associated to XPO, the investments have come beneath hearth from ethics consultants and Democratic critics, and the USPS has confirmed that DeJoy’s monetary holdings are beneath evaluate by the USPS inspector normal.
Richard Painter, the previous ethics chief beneath President George W. Bush, beforehand testified to Congress that DeJoy must be fired for his XPO holdings, saying it was “very likely” that DeJoy had violated federal battle of curiosity guidelines attributable to his investments “unless he has recused from so many matters at the USPS that he is not fully functioning as Postmaster General.”
$286 million. That’s the quantity that XPO has been paid by the U.S. Postal Service since 2013, based on paperwork obtained by the New York Times and revealed in September. That quantity consists of $14 million that had been paid to this point since DeJoy took workplace in June, which marked a major enhance over the $3.4 million paid over the identical time interval in 2019. XPO has attributed the rise to an expanded contract that was modified in December, earlier than DeJoy began at USPS, and an XPO spokesman beforehand instructed Forbes that $10.4 million of the $14 million had been funds for work that was carried out earlier than DeJoy took workplace.
“How can you run the post office and make decisions…if you own millions of dollars of stock in a company that is trucking the mail around?” Painter testified to Congress in September. “It doesn’t make any sense. So either [DeJoy] has not been doing his job, over the past 13 weeks or so, or he’s committed a crime that could be a felony.”
DeJoy had defended his investments previously as being ethically sound regardless of the controversy. “I have a significant investment in XPO Logistics, which I vetted before with the ethics department of the Postal Service and I was given specific types of guidelines that I needed to adhere to,” DeJoy testified to House lawmakers on August 24. “It’s a very, very small part of the Postal Service business I have nothing to do with. I comply with all ethical requirements and we have an OIG investigation.” In an e-mail to Forbes, Partenheimer mentioned DeJoy formally recused himself from issues involving XPO on July 21, and “no matters relating to XPO were considered or decided by [DeJoy] during the short period prior to his formal recusal.” “The Postal Service is confident that OIG’s ongoing review of this process will confirm the Postmaster General’s full compliance with ethics laws and regulations,” Partenheimer mentioned.
DeJoy has drawn vital criticism amid his tenure as postmaster normal. In addition to the XPO holdings, critics have additionally pointed to different elements of DeJoy’s monetary portfolio that might be problematic, together with reported inventory choices in Amazon—which DeJoy has denied holding—and monetary filings that present an funding of between $2 to $11 million in non-public fairness agency Warburg Pincus. The agency helped orchestrate a merger between XPO and New Breed Logistics, which DeJoy ran, and has a monetary stake in a number of logistics firms that True North Research government director Lisa Graves testified to Congress “could financially benefit from privatizing or parting out the U.S. Postal Service.” DeJoy has additionally been closely scrutinized for his historical past as a serious GOP fundraiser, significantly in gentle of a report within the Washington Post that alleged DeJoy pressured New Breed Logistics workers to donate to Republican candidates after which reimbursed them by means of firm bonuses, which may represent an unlawful straw-donor scheme if true.