DeJoy maintains financial ties to former company as USPS awards it new $120 million contract

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 DeJoy’s financial disclosure statements.

The new contract will deepen the Postal Service’s 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 DeJoy's 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 company’s 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 spokesperson 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.

DeJoy’s personal spokesperson, Mark Corallo, referred most questions to the Postal Service.

DeJoy's leases have alarmed some ethics watchdogs.

“There’s no question he’s 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 it’s 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. 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.

DeJoy’s 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 spokesperson 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.

XPO spokesperson Joseph Checkler said the company’s contracts with the Postal Service were awarded through regular procurement mechanisms.

DeJoy has deep connections to the logistics industry. He built his family's 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 wife’s financial disclosures, and SEC filings. (DeJoy’s wife, Aldona Wos, was President Donald Trump’s ambassador-nominee to Canada, and filed separate ethics forms in 2019.)

Three limited liability companies -- 4000 Piedmont Parkway Associates, 4035 Piedmont Parkway Associates, and LMD Properties -- 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.

Another limited liability company, the Louis DeJoy Family Partnership, held his XPO stock.

The three limited liability companies that lease buildings to XPO did not hold XPO shares. DeJoy's family charitable foundation did hold XPO assets, according to the inspector general report, though the investigation did not include how many shares or their value.

The inspector general report said a Postal Service ethics lawyer recommended DeJoy divest of certain assets to avoid conflicts of interest -- including stock in XPO, Amazon, and UPS -- or that he sign a recusal memorandum reassigning issues involving those companies to other agency leaders.

Within nine days of taking office, DeJoy sold between $565,000 and $1.2 million of stock in UPS and Amazon, two of the Postal Service’s top competitors, according to his financial disclosures. (Amazon founder Jeff Bezos owns the Washington Post.)

But the inspector general report stated that DeJoy initially explored alternatives to divesting XPO assets while remaining in compliance with ethics regulations. DeJoy assigned Michael Elston, secretary to the agency's governing board, and Heather Clarke, DeJoy's chief of staff who was previously employed at DeJoy's former companies, to screen issues involving companies with which DeJoy held investments, including XPO, according to the inspector general investigation.

Those issues were to be directed to David E. Williams, the agency’s chief operating officer. Williams retired in January. The Postal Service declined to provide the Washington Post with DeJoy’s updated screening processes.

On Aug. 13, though, DeJoy notified postal ethics officials that he would begin to divest of 14 companies of which he held assets and officials said could present conflicts of interest, including XPO.

Over the ensuing four months, he sold between $27.7 million and $107.8 million in shares from those companies. The vast majority -- between $26 million and $103.6 million -- were of XPO assets.