The U.S. Postal Service will pay $120 million over the next five years to a major logistics contractor that Postmaster General Louis DeJoy previously helped lead and with which his family maintains financial ties, according to DeJoys financial disclosure statements.
The new contract will deepen the Postal Services relationship with XPO Logistics, where DeJoy served as supply chain chief executive from 2014 to 2015 after the company purchased New Breed Logistics, the trucking firm he owned for more than 30 years. Since he became postmaster general, DeJoy, DeJoy-controlled companies and his family foundation have divested between $65.4 million and $155.3 million worth of XPO shares, according to financial disclosures, foundation tax documents and securities filings.
But DeJoys family businesses continue to lease four North Carolina office buildings to XPO, according to his financial disclosures and state property records.
The leases could generate up to $23.7 million in rent payments for the DeJoy businesses over the next decade, according to a person who shared details of the agreements with The Washington Post but spoke anonymously to discuss confidential financial arrangements. In 2018, when DeJoy sat on the companys board, XPO reported similar figures with the Securities and Exchange Commission. The leases run until 2025 and can be extended until 2030, according to those filings.
Postal Service spokesman Jeffery Adams said that DeJoy did not participate in the procurement process for the XPO contract, which was competitively bid. The DeJoy company leases to XPO were cleared by ethics officials before DeJoy took office in June 2020, according to a previously unreported Postal Service inspector general investigation, because the properties were rented to a contractor and not the agency itself. DeJoy is recused from any matters involving XPO, Adams said.
DeJoys personal spokesman, Mark Corallo, referred mostquestions to the Postal Service.
DeJoys leases have alarmed some ethics watchdogs.
Theres no question hes continuing to profit from a Postal Service contractor, said Virginia Canter, chief ethics counsel at watchdog group Citizens for Responsibility and Ethics in Washington. He can comply with these technical legal requirements but it does create an appearance issue about whether its in his financial interest to continue to make policy that would benefit contractors like XPO.
The previously unreported agreement will see XPO take over operations at two crucial sorting and distribution facilities in Atlanta and Washington, D.C. The agency awarded the company the contract in April, but XPO is a longtime postal vendor with dozens of other active contracts with the Postal Service for trucking and logistics assistance.
DeJoys 14-month tenure at the Postal Service has faced controversy throughout. Congressional Democrats and independent postal experts accused him of slowing mail delivery ahead of the November 2020 presidential election accusations he denied. He is under federal criminal investigation over alleged campaign finance abuses. A DeJoy spokesman in June said DeJoy has always been scrupulous in his adherence to the campaign contribution laws and has never knowingly violated them.
DeJoy has said repeatedly in congressional testimony that he would abide by all ethics requirements.
LDJ Global Strategies, of which Mr. DeJoy is a majority shareholder, leases certain commercial buildings to XPO. Such leases were disclosed by Mr. DeJoy in his public financial disclosure report, Adams said in a statement. In addition, the Office of Government Ethics endorsed Mr. DeJoys recusal agreement concerning XPO as an appropriate remedy to resolve any issues concerning the possible appearance of a conflict of interest concerning this landlord/tenant relationship.
XPO spokesman Joseph Checkler said the companys contracts with the Postal Service were awarded through regular procurement mechanisms. DeJoy has deep connections to the logistics industry. He built his familys trucking business into a shipping juggernaut after a breakthrough contract with the Postal Service in the early 1990s. He sold the business to XPO in 2014 for $615 million.
DeJoy generally held commercial properties leased to XPO and shares in the company through individual limited liability companies and his family foundation, according to his financial disclosures, his wifes financial disclosures and SEC filings. (DeJoys wife, Aldona Wos, was then-President Donald Trumps ambassador-nominee to Canada, and filed separate ethics forms in 2019.)
Three limited liability companies 4000 Piedmont Parkway Associates LLC, 4035 Piedmont Parkway Associates LLC and LMD Properties LLC own the leased buildings, according to North Carolina property records. DeJoy lists himself as a managing member of all three businesses in his financial disclosures.