WASHINGTON (CN) — An attorney testifying before a House Oversight subcommittee said Monday that Postmaster General Louis DeJoy may have violated federal law if reports are true that he reimbursed employees at his former business for making GOP campaign donations.
“I will not opine as to whether Mr. DeJoy violated campaign finance laws,” said Richard Painter, a corporate law professor at the University of Minnesota Law School. “I will say, that if the stories reported in the Washington Post or the New York Times are true, or any piece of those stories is true about reimbursement of employees for campaign contributions, that is a straw donor arrangement and that is a felony. People go to jail for that.”
Painter, the chief White House ethics attorney in President George W. Bush’s administration from 2005 to 2007, was referring to a story published a week ago by the Washington Post. Employees of DeJoy’s former company New Breed Logistics, including his former director of human resources, told reporters they were often pressured into attending fundraising events and making contributions at DeJoy’s behest.
All told, 124 employees were found to have donated over $1 million to Republican candidates for federal office between 2000 and 2014, when the company was sold, according to the Post. The New York Times also confirmed the report.
Monday’s hearing held by the House Oversight Subcommittee on Government Operations largely focused on these allegations. Chairman Gerry Connolly, D-Va., said the U.S. Postal Service is the “crown jewel” of the federal government and it is essential that the agency reflects nonpartisanship and “noncronyism or favoritism.”
Painter testified that someone like DeJoy, with known ties to competitors of federal agencies or contracts with the agency they were applying to head, like New Breed Logistics had, would have never been nominated for postmaster general in the Bush administration.
“Why? Because there is a grave risk that that person will commit a crime, when they’re in office,” Painter said. “How can you run the Post Office and make decisions about scheduling the mail, about the specifications for contracts, about when the trucks leave and all those decisions, if you own millions of dollars of stock in a company that is trucking the mail around? A contractor with a Post Office. It doesn’t make any sense.”
House Oversight Committee Chairwoman Carolyn Maloney, who held a hearing last month over operational changes in the Postal Service that threaten to delay election mail, pointed to questions raised by Congressman Jim Cooper, D-Tenn., during that hearing about DeJoy reimbursing former employees’ campaign donations. The postmaster general said at the time that the allegations were “outrageous.”
“If true, these allegations are not only incredibly unethical, they are illegal, and to compound these possible crimes, Mr. DeJoy would have lied to Congress as well,” Maloney said Monday.
On Sept. 2, the New York Democrat issued a subpoena to DeJoy for documents related to the controversial changes in Postal Service policies, including the reduction of overtime and a freeze on executive hiring.
Maloney focused more on the role of the Postal Service’s board of governors during the subcommittee hearing Monday. She asked S. David Fineman, former chairman of the board of governors, what the normal process for selecting a new postmaster general would entail.
He said it was standard for an outside firm to form a candidate list for the board, which includes nine people appointed by the president, and then the board interviews candidates from a narrowed pool.
But Robert Duncan, chairman of the board, told lawmakers last month that DeJoy’s name was added after that selection process was winding down, according to Maloney.
“In either of your selection processes for postmaster general that you participated in, did board members add candidates after the search firm had already done its work to narrow down the list of possible candidates?” Maloney asked Fineman.
“To the best of my recollection, I do not remember anyone recommending anyone on a personal basis,” Fineman said. “And quite frankly, if they did, it wouldn’t come before the board initially, it would go back to the search firm, so they could do their due diligence about the candidate.”
Members of the House panel also heard from Ann Ravel, former chairwoman of the Federal Election Commission. She said if the reports about alleged campaign finance violations are true, DeJoy’s reimbursements would fit the definition of a straw donor scheme as defined by the Department of Justice’s 2017 manual on federal prosecution of election offenses.
She said his alleged actions would be the “poster child” for those types of violations.
“It’s illegal to coerce any individual to make a contribution or engage in fundraising for a candidate,” Ravel said. “Such coercion is also a threat to Democratic processes because workers’ freedom of expression and exercise of their own political views is threatened. But in nearly every case of major significance over a decade, the FEC has not even investigated serious allegations such as this and rarely enforced the law. It’s well-known that the laws can be ignored.”