Connolly, Blumenauer, Pascrell Lead 41 Members in Urging President Biden to Remove and Replace Entire Postal Board of Governors
Washington, DC, March 18, 2021
Today, Rep. Gerry Connolly (D-VA), Chairman of the House Subcommittee on Government Operations, Rep. Earl Blumenauer (D-OR), Chairman of the House Ways & Means Subcommittee on Trade, and Rep. Bill Pascrell, Jr. (D-NJ), Chairman of the House Ways & Means Subcommittee on Oversight, led 41 of their colleagues in writing to President Joe Biden to urge him to immediately remove and replace the six current members of the Postal Service Board of Governors.
“Under the tenure of this Board of Governors, the Postal Service was blatantly misused by President Trump in an unsuccessful gambit to influence a presidential election, the Postal Service is currently failing to meet its own service standards with historically low rates of on-time delivery, and conflicts of interest appear to be a requirement for service,” wrote the Members. “Because of their lax oversight, many families struggling through the pandemic still await delivery of their stimulus checks, credit card statements, or event holiday cards.”
The letter cites three broad failures on the part of the Board of Governors that warrant the immediate removal and replacement of its current members:
· Silence in the face of continued gross mismanagement
· Continued and self-inflicted nationwide delays in mail delivery
· Rampant conflicts of interest
“For these reasons, we ask that you immediately remove the six current Postal Service Board of Governors and work with Congress to find the right people to perform these essential duties,” the Members concluded.
In addition to Connolly, Blumenauer, and Pascrell, the letter was signed by Representatives: Beyer, Boyle, Bush, Carson, Casten, Cohen, Cooper, Davis, DeFazio, Hastings, Holmes Norton, Huffman, Jones, Kaptur, Khanna, Kirkpatrick, Krishnamoorthi, Lee (CA), Lieu, Lowenthal, Lynch, Carolyn Maloney, McBath, McEachin, McGovern, Mfume, Nadler, Napolitano, Payne, Pingree, Porter, Pressley, Raskin, Rush, Scanlon, Schakowsky, Speier, Titus, Tonko, Velazquez, and Welch.
Full text of the letter is available here and below.
The Honorable Joseph R. Biden
The White House
1600 Pennsylvania Avenue N.W.
Washington, D.C. 20500
Dear President Biden:
We write with great concern about the Postal Service’s continued failure to meet its own standards of service, the repeated failure of the current Postmaster General (PMG) to effectively and appropriately engage Congress and other stakeholders, and the gross negligence of the current Board of Governors (BOG) in fulfilling its statutory responsibilities to run an effective Postal Service. We write to respectfully request your consideration in removing the six current Board members and replacing them with nominees of the caliber of your recent nominees for the three vacant board seats.
The Postal Service provides mail delivery to more than 159 million delivery points and operates more than 31,000 post offices nationwide. Today, the Postal Service employs almost 497,000 career employees, 136,174 non-career employees, and is the foundation for a more than $1.7 trillion mailing industry that employs more than 7.5 million people. In commitment of its mission, the Postal Service delivers 48% of the world’s mail and operates a delivery vehicle fleet of 204,274.
Under the tenure of this BOG, the Postal Service was blatantly misused by President Trump in an unsuccessful gambit to influence a presidential election, the Postal Service is currently failing to meet its own service standards with historically low rates of on-time delivery, and conflicts of interest appear to be a requirement for service. Because of their lax oversight, many families struggling through the pandemic still await delivery of their stimulus checks, credit card statements, or event holiday cards. The nonpartisan Postal Service Office of Inspector General found that the BOG allowed their hand-picked Postmaster General (PMG) to implement significant operational changes in the milieu of the election and the pandemic without conducting any research into the impacts and ramifications of these changes.
The entirely Trump-appointed Postal Service BOG has politicized the most beloved agency in the federal government and allowed its service standards to tank. According to the Postal Service’s own data, in December 2020, first-class mail on-time delivery rates averaged just 52.4% in the Northern Virginia Postal District (Capitol Metro Area), 55.1% in the Richmond Postal District (Capitol Metro Area), and 67.0% in the Appalachian Postal District (Eastern Area). The Postal Service leadership might argue these unacceptable on-time delivery rates are an unfortunate side effect of the COVID-19 pandemic. But if you compare these rates to those from March 14, 2020 to July 11, 2020 — the very start of the pandemic — when on-time delivery rates of first-class mail were 90.9% in the Northern Virginia Postal District, 90.3% in the Richmond Postal District, and 93.8% in the Appalachian Postal District, their excuses just do not hold water.
The Postal Service is in free fall, and until the March 24 House Committee on Oversight and Reform hearing, the BOG’s only public statement has been to the media — stating that they are “tickled pink” with the new PMG. Even more troubling is that, Mr. Ron Bloom, the current Chairman of the BOG, continued his support of PMG DeJoy, even when directly confronted with our many concerns about DeJoy’s performance. The Board has remained silent in the face of catastrophic and unacceptable failures at a moment when the American people are relying on the Postal Service the most. It is time to remove all governors and start over with a board vested with the expertise and acumen this nation needs in its Postal Service leadership.
Silence in the Face of Continued Gross Mismanagement
On May 6, 2020, the Postal Service BOG announced its selection of Louis DeJoy to serve as the 75thPMG, and on June 15, 2020, Mr. DeJoy was officially sworn in. Postmaster General DeJoy’s short tenure has been marked by controversy and poor service. Below is an abridged timeline of some key events that underscore our concerns about PMG DeJoy and the BOG’s unwillingness to take action to save the struggling postal service.
On July 14, 2020, internal communications to Postal Service managers reportedly urged them to restrict letter carrier movements, causing mail delivery delays. The Postal Service told Congress that those documents were not official communications, yet many of the operational changes described in the documents were implemented.
On August 7, 2020, PMG DeJoy, along with Chief Human Resources Officer Issac Cronkhite, unveiled a sweeping reorganization. According to the new organizational chart, 23 postal executives were reassigned or displaced without forewarning or briefings to Members of Congress, stakeholders, or the public. The announcement stated that “these strategies are substantial and will fundamentally change how we run our business.” News reports of mail and package delivery delays and other concerns increased in the announcement’s wake.
On August 14, 2020, House Committee on Oversight and Reform Chairwoman Carolyn Maloney, House Speaker Nancy Pelosi, Senate Democratic Leader Chuck Schumer, Senate Committee on Homeland Security and Governmental Affairs Ranking Member Gary Peters, Committee on House Administration Chairperson Zoe Lofgren, and Senate Committee on Rules and Administration Ranking Member Amy Klobuchar sent a detailed, ten-page letter to the Postmaster General requesting “additional information and documents regarding his policies and practices, the specific changes he was proposing, the rationale for those changes, and the potential impacts of those changes.” The letter requested these documents by August 21, 2020.
On August 18, 2020, PMG DeJoy announced he would pause some of the operational changes, stating: “Retail hours at Post Offices will not change. Mail processing equipment and blue collection boxes will remain where they are. No mail processing facilities will be closed. And we reassert that overtime has, and will continue to be, approved as needed.” The Postmaster General stated that his proposed reorganization would continue.
On August 21, 2020, PMG DeJoy testified before the Senate Homeland Security and Governmental Affairs Committee where he:
· stated that the Postal Service would not reinstall mail sorting machines that had been removed as part of recent operational changes;
· confirmed that other recent operational changes have delayed mail and hurt people; and
· clarified that while some of the operational changes were paused, the reorganization of USPS would move forward as planned.
After the Senate hearing concluded, PMG DeJoy sent to Congress a response letter with a small production of documents. This production included only 14 pages relating to the “Expedited to Street/Afternoon Sortation” initiative. It did not include any analyses of PMG DeJoy’s operational changes before he made them or any assessments of the impacts and delays after they were implemented.
On August 24, 2020, PMG DeJoy and the Chairman of the Postal Service Board of Governors, Robert Duncan, testified before the House Oversight Committee. Prior to the hearing, the Committee on Oversight and Reform obtained an internal Postal Service document warning Mr. DeJoy about steep delivery performance declines and increasing delays nationwide over the last two months as a result of the changes he had implemented. The new document was a “PMG Briefing”—a presentation prepared directly for PMG DeJoy almost two weeks before his testimony before the House — on August 12. It warned that the Postal Service experienced a significant drop in service performance across the board — in First-Class, Marketing, Periodicals, and other categories. During the hearing, PMG DeJoy admitted to contacts with Trump campaign affiliates and denied using bonuses to reimburse employees at his former company New Breed Logistics for their donations to the Trump campaign.
On September 2, 2020, Chairwoman Carolyn Maloney issued a subpoena compelling PMG DeJoy to produce a wide range of documents, including those previously requested and a list of all contacts with Trump campaign affiliates. The Committee on Oversight and Reform continues to engage the Postal Service to acquire documents as part of its constitutional oversight duties.
On September 6, 2020, the Washington Post published findings that five former employees of PMG DeJoy at New Breed Logistics claimed that they were coerced to contribute to Republican political campaigns and, at times, were reimbursed for such donations through bonus payments from the company. If true, these actions constitute a violation of federal and state laws.
On October 19, 2020, the Postal Service Inspector General released a report that examined PMG DeJoy’s implementation of sweeping operational changes in the midst of the pandemic. The report stated:
No analysis of the service impacts of these various changes was conducted and documentation and guidance to the field around these strategies was very limited and almost exclusively oral. The resulting confusion and inconsistency in operations at postal facilities resulted in significant negative service impacts across the country. … We also found that documentation of the operational changes provided to Congress and customers was generally accurate but incomplete….
While the Postal Service estimated work hour savings for many of the initiatives, it did not complete a study or analysis of the impact the changes would make on mail service prior to implementation. Further, the Postal Service did not pilot test or otherwise consider the impact of the changes even though critical employee availability issues were being felt as pandemic cases rose following the July 4 holiday weekend. Lastly, we noted that these initiatives were implemented quickly and were communicated orally, which resulted in confusion and inconsistent application across the country.
In the wake of these management failures, on March 3, 2021, the PMG once again took unilateral action to announce “the next phase” of sweeping operational changes at the Postal Service. The announcement included plans to consolidate Postal Service Districts, centralize certain marketing functions, and offer employees early retirement. These actions seem puzzling at a time when the Postal Service and the Board of Governors have claimed that chronic understaffing is the primary catalyst for the abysmal service standard rates. Moreover, these changes were announced exactly one week after the House Committee on Oversight and Reform Hearing examining how to “Put the Postal Service on Sustainable Financial Footing.” Despite having a perfect opportunity to vet these ideas with Members of Congress during hearing preparation or at the hearing itself, PMG DeJoy did not mention his intentions to begin implementation of these operational changes — once again failing to engage critical stakeholders, including Congress, unions, and postal customers. These continued and flagrant abdications of leadership require immediate action.
It is impossible to have faith in a BOG that remained silent in the wake of such scathing findings and continued failures. It is unconscionable that this Board could continue to support this PMG.
Continued and Self-Inflicted Nationwide Delays in Mail Delivery
The implementation of PMG DeJoy’s operational changes at the Postal Service coincided with measurable mail delays across the country that have only gotten worse in recent months. PMG DeJoy has admitted that the operational changes have had “unintended consequences that impacted our overall service levels.” These delays mean slower delivery times for critical items such as Social Security checks, veteran’s prescriptions, unemployment benefits, and mail-in ballots.
On August 22, 2020, the House Committee on Oversight and Reform released internal Postal Service documents indicating that PMG DeJoy was briefed about these nationwide delays on August 12, 2020. These documents also confirm that there has been a significant drop in service standards across the board since the beginning of July — including in First-Class, Marketing, Periodicals, and Priority Mail.
The Postal Service is responsible for delivering about 90% of all Department of Veterans Affairs mail order prescriptions to veterans. In 2019, more than 170 million prescriptions were delivered by mail in the United States. Recent reports suggests that mail-order prescription deliveries are on the rise, given the state lockdowns due to the coronavirus pandemic.
According to the Disabled American Veterans, USPS has been delayed in delivering mail order prescriptions by an average of almost 25% over the past year. On September 9, 2020, Senator Warren and Senator Casey released a report detailing significant delays in the delivery of prescription drugs according to several major U.S. pharmacies. According to the Senators’ report, since the start of Postmaster General DeJoy’s tenure “pharmacies and pharmacy benefit managers reported that average mail order drug delivery time has increased 18-32%,” meaning that deliveries typically taking 2-3 days are now taking 3-4 days instead. These delays pose serious health risks for individuals who receive their prescriptions through USPS, particularly for those who suffer from chronic illnesses.
Rampant Conflicts of Interest
In addition to our deep concerns about service standards and the intent to influence the presidential election, we are also disturbed by the staggering conflicts of interest presented by the Board of Governors and PMG DeJoy. Many of these conflicts of interest were investigated at length at the hearing Chairman Gerry Connolly led on September 14, 2020.
Former BOG Chairman Robert Duncan is on the leadership board of two large political action committees (super PACs), prompting concerns about his role in politicizing the Postal Service during the election. According to his own online biography, Governor William D. Zollars served as president and chief executive officer of YRC Worldwide, Inc., a company currently involved in a lawsuit with the Department of Defense for allegedly overcharging the federal government millions of dollars. YRC also received a $700 million loan from the federal government in Summer 2020.
Postmaster General Louis DeJoy held, at least through November, a multimillion-dollar stake in his former company XPO Logistics, a U.S. Postal Service contractor. Ethics officials at the Postal Service approved this arrangement, which allowed Postmaster General DeJoy to keep at least $30 million and as much as $75 million in XPO Logistics holdings. PMG DeJoy appears to have divested himself from his shares of Postal Service contractor XPO, but it remains unclear whether he has made arrangements to repurchase those shares in the future. Additionally, Mr. DeJoy has recently purchased stock in pharmaceutical companies that rely on the Postal Service for their financial success, creating new concerns about conflicts of interest.
Since Mr. DeJoy took over as Postmaster General, XPO Logistics reportedly has seen an immense growth in U.S. Postal Service contracts. Reports found that XPO Logistics has been paid about $14 million from the U.S. Postal Service, compared with $3.4 million during the same time frame in 2019 and $4.7 million in 2018.
PMG DeJoy divested large amounts of Amazon shares on June 24, 2020, nine days after assuming his new role. That same day, he purchased back covered calls on his Amazon stock. At the House Committee on Oversight and Reform hearing on August 24, when pressed about his investments in Amazon, PMG DeJoy told Members that he did not own any financial interest in Amazon.
As noted above, according to recent reports, Mr. DeJoy may have also violated campaign finance laws when he was Chief Executive at New Breed Logistics by pressuring his employees to make donations to Republican campaigns and then later reimbursing those donations through bonuses. In the years leading up to the sale of New Breed Logistics in 2014, company donations to federal and state GOP candidates exceeded $1 million.
Walter Shaub, the former director of the Office of Government Ethics, said of Mr. DeJoy’s investments: “The idea that you can be a Postmaster General and hold tens of millions in stocks in a Postal Service contractor is pretty shocking.” Shaub also claimed that if PMG DeJoy fails to remove his investments from Postal Service contractors, it likely constitutes an illegal conflict of interest.
For these reasons, we ask that you immediately remove the six current Postal Service Board of Governors and work with Congress to find the right people to perform these essential duties.