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Businessweek
Businessweek
Politics
Devin Leonard

Trump’s Favorite Postmaster Is Surviving Biden—and Maybe Even Saving the USPS

Louis DeJoy, wearing a blue suit and a red tie, his bald head glistening in the light of the chandeliers above, leans over a podium in a hotel ballroom. His voice swells with indignation as he describes some of the deficiencies he discovered after taking his current position. The 75th U.S. postmaster general says he found that the agency’s training manuals on how to operate mail processing plants were 40 years old. “Forty years old!” he shouts, his accent redolent of his native Brooklyn. “They instruct you how to do things wrong! So I’m collecting all those.”

Then there are the cost-cutting measures that went into effect at the agency after mail volume was decimated in the Great Recession. DeJoy says he was mortified to learn that in parts of the country, post office bathrooms are cleaned only three times a week. “What about the other four days?” he asks.

DeJoy is sharing his findings with about 250 U.S. Postal Service executives gathered in a Marriott near the Hartsfield-Jackson Atlanta International Airport. His listeners murmur in agreement. Their responses become more emphatic when he mentions a note he recently received from a letter carrier with a concern about his mail truck, which, if it’s typical of USPS vehicles, is probably three decades old. “He was told not to use reverse in his vehicle,” DeJoy says. “Not to use reverse!”

He brandishes a copy of the 10-year agency turnaround plan he’s been championing. Yes, he’s gotten pushback trying to carry it out, most recently regarding his effort to replace the USPS’s decaying fleet of trucks and vans. The White House admonished DeJoy for including only 5,000 electric vehicles in the initial order of 50,000. Congressional Democrats called for an investigation. DeJoy says this is the sort of thing that stopped previous postmasters in their tracks. “Not now,” he says. “Not me. Not this management team.”

A year ago you wouldn’t have expected to find the 64-year-old DeJoy, a former logistics industry executive and major contributor to former President Donald Trump, addressing an audience, especially a group of postal executives, with such exuberant self-assurance. Soon after he started on the job, in June 2020, half the country seemed convinced that he was trying to destroy the post office. The mail, in some cases, had slowed since his arrival. Newspapers were filled with reports of vanishing sorting machines and letter boxes. Congressional hearings were breathtakingly antagonistic, with Democrats warning the sometimes sneering DeJoy that he might very well exit his office in handcuffs. “Mr. DeJoy, is your backup plan to be pardoned like Roger Stone?” Congressman Jim Cooper of Tennessee asked during an August 2020 hearing.

DeJoy’s antagonists were also eager to draw attention to what they described as his ethical lapses. In particular, they highlighted allegations that he might have violated campaign finance laws when he was chief executive officer of New Breed Logistics, the company he sold in 2014 for $615 million, by pressuring his employees to make donations to GOP candidates. Such charges later become the subject of an FBI investigation.

Once Joe Biden defeated Trump, a lot of people figured the incoming president would move swiftly to dump the postmaster general. But DeJoy is still very much on the job, and he’s achieved more than you might expect in the face of continued challenges. The Postal Service’s handing of mail-in ballots in the 2020 presidential election was hardly a debacle. With a record 43% of Americans voting by mail, the USPS transported the vast majority of ballots to state election officials within three days.

When DeJoy unveiled the 10-year plan in March 2021, it was criticized by Democrats and some of his agency’s largest customers, because it included price increases and the slowing of some first-class mail. However, it was praised by Fredric Rolando, president of the National Association of Letter Carriers, the Postal Service’s largest employee union, which has tangled with some of DeJoy’s predecessors. The union declined to comment for this story, but in a statement at the time of the plan’s introduction, Rolando lauded its aspirations to improve working conditions for postal workers and put the USPS back on a growth trajectory by encouraging smaller businesses to use the service more for packages. The Biden administration has periodically signaled its unease with DeJoy. “That has not changed,” press secretary Jen Psaki said in January. Yet the postmaster general collaborated recently with the White House to successfully deliver 320 million free Covid-19 test kits to American households in an average of less than two days.

In March, DeJoy worked with both parties in Congress to pass the Postal Service Reform Act, the main thrust of which is the elimination of a 16-year-old requirement that the agency prefund retiree health-care payments. The USPS has long complained that no other agency has such an obligation and that it has accounted for $58 billion of its losses over the past decade; eliminating it had been at the top of the agency’s wish list for some time. “His critics on the Democratic progressive side have just grossly underestimated him,” says Paul Steidler, who studies postal issues at the Lexington Institute, a conservative think tank. “They demonized him. He’s tuned that out and concentrated on putting in place the policies that he wants for the Postal Service.”

And the ethical cloud that has hung over DeJoy appears to be lifting. A spokesperson for DeJoy says the postmaster general’s attorney was told by the U.S. Department of Justice in early March that it had concluded its inquiry into his fundraising and found no evidence of wrongdoing. “You know, when I came here, I quickly developed a reputation as being evil, the evil postmaster general,” DeJoy tells his listeners in Atlanta. “That’s changing.”

DeJoy has little in common with his recent predecessors, low-profile bureaucrats who’d spent long careers at the agency. He’s a self-made entrepreneur, charmingly unfiltered. He sometimes stumbles over his words as if his mind is racing faster than he can speak. There are moments when he expresses bitterness about being strafed by his adversaries. But he’s mostly upbeat, and often funny, as he talks about his nearly two years as America’s senior mailman.

DeJoy says he was intrigued when he was contacted by an executive search firm working for the USPS in the spring of 2020. The pandemic had set in, and DeJoy was stuck at home, rich and bored. “I was freaking out,” he recalls in a lengthy interview at USPS headquarters in Washington. “Then I was recruited, and I was like, hell yeah. I could do something with this.”

There has been considerable speculation that Trump and his secretary of the Treasury, Steven Mnuchin, played a role in DeJoy’s selection. Presidents haven’t appointed people in DeJoy’s role since 1970, but they do appoint the nine members of the USPS Board of Governors who choose the postmaster general. DeJoy says there was no meddling—he likes “those guys,” he says, but he didn’t tell either of them he was up for the position until he’d been offered the job. He says people who assume that he was given orders by the Trump administration misunderstand the relationship. “I don’t owe them anything,” he says. “They didn’t raise money for me.”

Roman Martinez, chairman of the board, corroborates DeJoy’s version of events. “The White House wasn’t involved,” he says. “They were delighted when they heard he was the one, but it was a board decision.” A former investment banker appointed by Trump, Martinez says the board had lengthy discussions about whether DeJoy would be a lightning rod because of his political involvement—he hosted fundraisers for both George W. Bush and Trump at his home in Greensboro, N.C. Still, Martinez says, the governors were convinced that if anybody could fix the ailing USPS, it was DeJoy, who’d built up New Breed Logistics from a struggling family trucking business. The company, based in High Point, N.C., had contracts with the USPS and employed 10,000 people.

Not that support for DeJoy was unanimous. David Williams, a Democratic board member and another Trump appointee (presidents are required by law to appoint members from both political parties), resigned before the vote, later saying he did so in part because he found DeJoy woefully underqualified.

This much is beyond dispute: DeJoy arrived at the USPS at a dark time. Covid was spreading through the ranks; since the beginning of the pandemic, nearly a fifth of the agency’s 644,000 employees have tested positive. Senior postal officials believed the USPS was headed off a cliff. Several months earlier, DeJoy’s predecessor, Megan Brennan, had warned Congress that the agency might run out of cash early in the summer. House Democrats inserted a $25 billion cash infusion in their version of the Cares Act in the pandemic’s early weeks. Trump refused to sign it unless the money was excised, and it was.

DeJoy says he found the USPS in a state of paralysis. He discovered that trucks were leaving mail processing plants behind schedule and often less than half full. The obvious answer, from his perspective, was to insist they run on time. At his urging, the organization came up with a plan, and it backfired. Mail piled up at processing plants, and deliveries were delayed for days. “Boom!” DeJoy says, throwing his arms up in the air. “The whole place collapsed. Unbelievable!”

By the late summer, delivery times were improving, but partisan suspicion was rampant Because of the pandemic, a much larger number of Americans were expected to vote by mail, especially Democrats. Trump was regularly tweeting, often in all caps, that postal ballots would be the subject of widespread fraud. The USPS found itself under more scrutiny than it had been in decades. People noted with alarm that the agency was removing mailboxes from street corners and letter-sorting machines from processing buildings. These things had been going on for years, because of the decline in the volume of first-class mail. That didn’t stop DeJoy’s critics from presenting them as proof, along with the delivery slowdown, that he was scheming to undermine the Democratic process.

DeJoy says he was flummoxed by this. “All the accusations,” he says. “I’m trying to overthrow the government. I had no background in overthrowing governments.” Activists were soon picketing outside his homes in Washington and Greensboro. His daughter was attacked on social media by her schoolmates.

Democratic leaders also raised questions about what they described as a conflict of interest involving shares he owned in XPO Logistics Inc., to which he’d sold New Breed. XPO held trucking contracts with the USPS. “DeJoy holds millions of dollars of stock in XPO Logistics, which does business with the USPS,” tweeted Massachusetts Senator Elizabeth Warren. “How can he make impartial decisions with a straight face?”

A subsequent investigation by the USPS Office of Inspector General found that DeJoy had “met all the applicable ethics requirements” related to his investments. DeJoy says he recused himself from all decisions involving XPO. By the end of the year, he’d sold his stock—he’d have done it faster, he says, but he needed to go through a lengthy signoff process first with the U.S. Office of Government Ethics. “Listen, I’m an ethical guy,” he says.

The post office’s success with mail-in ballots didn’t quiet his critics. To this day, they insist that DeJoy performed well only because he was forced to by federal judges in cases brought against him by multiple Democratic state attorneys general. “Louis DeJoy responds well to lawsuits,” says Porter McConnell, a co-founder of the Save the Post Office Coalition, a group devoted to ousting him.

In fairness, though, the USPS was carrying out a plan it had begun developing before DeJoy arrived. He bolstered the effort in August 2020 by forming a committee with leaders of the agency’s employee unions to monitor the movement of ballots in post offices and mail processing plants. The USPS put the same system in place for the January 2021 Georgia runoff races that flipped the U.S. Senate to the Democratic Party.

Perhaps in part because he now seemed like one of the last relics of the Trump era, congressional Democrats urged incoming President Biden to send DeJoy packing. Presidents can’t fire postal chiefs, just as they can’t hire them, but Biden did name three board members, whom the Senate confirmed in May 2021. Little has seemed to change as far as DeJoy is concerned. Biden has two additional appointees awaiting Senate confirmation. One is a former aide to Senate Minority Leader Mitch McConnell—and unlikely to revolt against DeJoy.

The board signed off on DeJoy’s long-term plan during the early months of the Biden presidency. Most of it doesn’t require Congress’s approval. “I take seriously the fact that we’re an independent agency,” DeJoy says. “I have a lot of authority, and I use it, right? And I’m getting us to be more bold in terms of what we’re doing.”

Contrary to some expectations, the plan commits the USPS to Saturday letter delivery, which several of his predecessors wanted to abolish. It also includes price hikes, made possible by a 2020 ruling by the Postal Regulatory Commission, the USPS’s primary regulator. DeJoy is also pursuing what some might describe as a counterintuitive fix to the Postal Service’s ongoing delivery problem. The agency, he notes, hasn’t met its own service standards in a decade. DeJoy argues that the USPS has relied too heavily on FedEx Corp., United Parcel Service Inc., and commercial airlines to fly the mail across the country, and it’s just not working. His solution is to shift some first-class mail back to trucks. This will add a day or two of delivery time to some mail, but he argues that it will enable the USPS to provide more cost-efficient, reliable service.

DeJoy is also targeting employee turnover, another contributor to lousy delivery. Even before the pandemic, turnover was 40% among newer postal workers, who were essentially contract workers receiving lower pay and stingier benefits than their veteran peers. DeJoy has converted as many as 63,000 of them to what the agency refers to as full “career” status so they’ll stick around. He acknowledges this will be costly, but he argues it will save money in the long run. Union leaders are delighted. “There was too much churn, too much turnover, and it was deeply affecting the service,” says Mark Dimondstein, president of the American Postal Workers Union. Dimondstein, however, remains highly skeptical of the parts of DeJoy’s plan that will slow the mail.

Congressional Democrats have excoriated DeJoy’s initiatives, saying he’s up to his old shenanigans. Lobbying groups representing big users of the mail such as banks, insurers, and junk mailers sent a joint letter to DeJoy warning him that higher prices would chase volume out of the system, further imperiling the USPS. DeJoy answers that many of these customers are shifting their correspondence online anyway. “Whether they leave us in two years or three years, they’re leaving us,” he says. “I need a strategy.”

At an August board meeting, two Biden appointees expressed their discomfort with the delivery slowdown. One, Ronald Stroman, a former deputy postmaster general, said it was “strategically ill-conceived” and “creates dangerous risks.” Anton Hajjar, a former general counsel for the American Postal Workers Union, wondered why the Postal Service was in such a rush to do this. But the deal was already done. The postmaster general was moving ahead.

Thanks to higher package revenue and slightly lower expenses, the USPS ended 2021 with a net loss of $4.9 billion, roughly half the 2020 figure. Its performance during the holiday season was also significantly better than in 2020, partly as a result of a greater focus on package delivery. The USPS purchased 112 new package-sorting machines and leased more than 50 voluminous buildings where employees would have enough room to sort parcels, which naturally take up much more space than letters.

The same buildings became fulfillment centers after Christmas when the USPS teamed up with the U.S. Department of Human Services to distribute millions of free Covid test kits. The USPS hadn’t done much of that kind of work, but DeJoy had at New Breed. “His logistics experience was crucial to the success of that project,” says Amber McReynolds, a Biden board appointee.

At the same time, DeJoy was lining up votes for the Postal Reform Act. Democrats had long been on board with jettisoning the prefunding stricture. The challenge was convincing Republican senators. This is where DeJoy was able to make good use of his political connections. “Only he could have brought those Republicans in,” says Paul Hogrogian, president of the National Postal Mail Handlers Union.

The bill was passed by the Senate in a 79-19 vote on March 8. (Biden is expected to sign it imminently.) Some of DeJoy’s colleagues asked if he wanted to celebrate. He didn’t. “I never want to talk about that thing again,” he says. “It’s a freakin’ distraction. It’s a reason for not doing other stuff.”

Already, whatever fleeting collegiality he’d enjoyed with Democrats on the Hill is dissipating. Gerry Connolly, a Virginia Democrat and chairman of the House subcommittee overseeing the USPS, has been demanding DeJoy’s resignation because of his refusal to fully electrify the new USPS fleet. “He’s defying everything we’re trying to do in terms of environmental policy—not just the Biden administration, Congress, and, for that matter, the Paris climate accord,” he says.

Not so, DeJoy responds; he just doesn’t have the money right now. He says he needs his spare cash to repair leaky roofs and faulty air conditioning systems in mail plants. “I’m not the EPA,” he says. “I’m in charge of the United States Postal Service that’s in crisis.” In late March, however, the USPS increased its order to 10,019 EVs.

After his speech in Atlanta, DeJoy takes me on a tour of several nearby plants to show me what else he’s trying to fix. He enters one cavernous building with an archaic sorting machine suspended from the ceiling, carrying mail trays around in circles. Who wants to work in such dimly lit facilities, he asks. “Are we vampires? These places are so dark even the rats have mining helmets.”

In another, he points disapprovingly to the catwalks overhead, where postal inspectors spied for years on letter-sorting employees. He wants to get rid of them. “We found out most people are honest,” DeJoy says. On his way out, he chats with a clerk. It turns out she’s one of the workers recently converted to career status. She thanks him profusely.

I once asked DeJoy whether, given all the criticism and enmity directed at him, he ever thought about walking away. Nah, he said, he’d done high-stakes work before; he wasn’t shocked to be scrutinized and criticized. “You’ve got to remember,” he said, “I had a fairly consequential life before.”

He ran a big successful company. He’s had presidents and senators to his house. Until the pandemic, he had season tickets to New York Yankees games, right behind the dugout.

He doesn’t care for certain aspects of the job. “You know, government agencies coming after me over bullshit articles in a newspaper.” Otherwise, he’s having a good time at the USPS. He likes the work. He likes the people. “This is the most emotionally stable I’ve ever felt in my life,” he says.

“I sleep like a freakin’ baby.”

Read next: Signed, Sealed, Snatched

©2022 Bloomberg L.P.

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