Old Postal Service Audit Surfaces, Shows DeJoy's Company May Have Gouged Taxpayers for $53 Million

September 15, 2020

By Joan McCarter

It turns out Postmaster General Louis DeJoy has been scamming the United States Postal Service for decades, almost making it seem like sabotaging the institution has become his life's work. A 20-year-old audit of contracts for mail equipment transport unearthed by NBC News shows that his old company was awarded multiple contracts in noncompetitive bids. Those contracts cost taxpayers as much as $53 million more than would have been paid out if the contracts had been bid competitively.

DeJoy's New Breed Logistics, which was bought out by XPO Logistics in 2015, had contracts going back to 1992. DeJoy had a friend on the inside, apparently, who arranged the noncompetitive contracts which "did not fully meet Postal Service requirements" and "potentially exposed the Postal Service to cost and performance risks," according to the audit. Since the contracts were awarded outside of a bidding process, it raises questions about whether DeJoy was overbilling the USPS, gouging taxpayers. It also adds more questions about the background and qualifications of DeJoy himself, who is now under scrutiny not just for the operational changes he's made to the USPS which resulted in massive mail delays during the summer, but for alleged campaign finance violations at those same companies when he became a major Republican donor.

DeJoy didn't respond to the story, but a spokesperson released a statement saying, "There was no finding in the review that the company did not fulfill the terms and conditions of the contract." Whether the company fulfilled the contract seemed not to have been the point of the review; rather, it was how DeJoy got the gigs for his company without having to compete for them. "It's puzzling why it was not referred for investigation," said former Postal Service Inspector General Dave Williams, who served from 2003 to 2016. Yes. It is. Williams served on the USPS board of governors from 2018 until May of this year, when he quit just before DeJoy was appointed. He's been critical of DeJoy, questioning his qualifications (he has never served within the USPS) and the changes in service he's made.

Williams says that this audit underscores the problems with DeJoy's appointment and one of the reasons he quit: The board of governors didn't conduct a full background check of Joy when he was nominated. "I don't understand how an offer could have been extended before a background check was completed," Williams said. William J. Henderson, who was postmaster general during the timeframe of the audit, told NBC News he didn't recall having seen this specific audit. "We had tons of logistics partners while I was in the Postal Service, and I really didn't get into selecting particular partners or reviewing those sorts of things since they were done by purchasing."

Rep. Jamie Raskin, a Maryland Democrat on the House Oversight Committee, questioned DeJoy about the lack of a background check in last month's hearing. "One of the reasons that we have background checks," he said, "is that we identify patterns of misconduct or potential conflicts of interest that are out there." DeJoy responded, "Sir, I have no patterns of misconduct." There are now two good rebuttals to that assertion: the campaign finance illegality alleged by DeJoy's former employees, and this audit.

Posted with permission