The U.S. Postal Service has secured a $120 million, five-year deal with XPO logistics, a major logistics contractor with financial and personal ties to Postmaster General Louis DeJoy, The Washington Post reports.
The contract, which was awarded in April, will have XPO oversee operations at two "crucial" sorting and distribution facilities in Atlanta and Washington, D.C. The deal was reportedly competitively bid and did not directly involve participation from DeJoy, whose family businesses continue to lease four North Carolina office buildings to XPO, per the Post. Those leases could generate "up to $23.7 million in rent payments" over the next ten years. The postmaster general also served as XPO's supply chain chief executive from 2014 to 2015, and has divested between "$65.4 million and $155.3 million worth of XPO shares" since taking office.
"There's no question he's continuing to profit from a Postal Service contractor," said Virginia Canter, chief ethics counsel at Citizens for Responsibility and Ethics in Washington. Even if DeJoy complies with legal requirements, Canter added "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."
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XPO's North Carolina leases were cleared by ethics officials prior to DeJoy's inauguration, and a Postal Service spokesman said he is "recused" from an XPO matters, reports the Post. Although some "ethics watchdogs" have concerns over his ties, others, like Postal Service blogger Steve Hutkins, see DeJoy's logistic background as apt for outsourcing, considering as "he was one of them."
On the other hand, Dena Briscoe, president of the Washington and Southern Maryland branch of the American Postal Workers Union, lamented the XPO contract as a "slap in the face" to union members. "A lot of our members are taking offense to that," she said.
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