A businessman who donated to President Donald Trump was named as head of the U.S. Postal Service, which could face a significant restructuring as it faces pressure from the president to hike prices and billions in added debt.
Louis DeJoy’s selection as postmaster general of the United States was announced Wednesday by the service’s Board of Governors.
The businessman “understands the critical public service role of the United States Postal Service, and the urgent need to strengthen it for future generations,” Robert Duncan, chair of the board, said in a statement.
Members “appreciated Louis’s depth of knowledge on the important issues facing the Postal Service and his desire to work with all of our stakeholders on preserving and protecting this essential institution,” Duncan added.
DeJoy was previously chairman and CEO of New Breed Logistics, a shipping company with over 9,000 employees.
He said his work brought him into contact with the Postal Service.
“I have a great appreciation for this institution and the dedicated workers who faithfully execute its mission,” he said in a statement.
One of the CCP virus relief packages approved by Congress lets the Postal Service borrow up to $10 billion from the Department of the Treasury. Postmaster General Megan Brennan, who is retiring, said last month that sales were “plummeting” as a result of the COVID-19 pandemic.
“The sudden drop in mail volumes, our most profitable revenue stream, is steep and may never fully recover,” she said, releasing an estimate that the service’s net operating loss would grow by more than $22 billion by the end of 2021.
Trump on Pricing
Trump later in April said he won’t authorize more funding for the Postal Service unless it raises shipping rates for Amazon and other companies it handles packages for.
“The Postal Service is a joke because they’re handing out packages for Amazon and other internet companies. And every time they bring a package, they lose money on it,” Trump told reporters at the White House.
Amazon and other online-based companies are dropping a big portion of packages off at post offices, leaving the Postal Service to deliver them but lose money in the process, the president said. The Postal Service should raise prices by about four times, he added.
“For some reason—these people have been in there a long time—but for some reason, they’re very cozy with some of these companies, and they don’t raise the price of a package,” he added.
Both DeJoy and his wife, Aldona Wos, have donated extensively to Trump and Republicans. DeJoy donated more than $1.1 million to the Republican National Committee (RNC) and nearly $1 million to Trump Victory, a joint fundraising committee between Trump’s reelection campaign and the RNC.
DeJoy’s latest donation saw $210,600 go to Trump Victory in February. Wos was named U.S. ambassador to Canada that month.
Wos has donated about $150,000 to the RNC and tens of thousands to Trump Victory.
DeJoy is also slated to serve as finance chairman for the committee hosting the upcoming RNC convention in North Carolina. He is advising Trump on how to best reopen the country from the pandemic-fueled lockdown.
Rep. Gerry Connolly (D-Va.), chairman of the House Government Operations subcommittee, in a statement accused Trump of rewarding “a partisan donor by installing him at the United States Postal Service.”
“The Postal Service is in crisis and needs real leadership and someone with knowledge of the issues. This crony doesn’t cut it,” he added.
“My understanding is that the Postmaster General is appointed by the board. The board is appointed by the president. So there you have it,” House Speaker Nancy Pelosi (D-Calif.) told reporters in Washington on Thursday.
DeJoy transformed New Breed Logistics, a small, family-owned company with 10 employees, into a nationwide provider of logistics solutions employing more than 9,000 people, according to the Board of Governors. New Breed was a contractor to the Postal Service for more than 25 years, receiving awards from the service during four of them.
New Breed merged with another company in 2014. DeJoy retired in 2015.
The board said it conducted an extensive nationwide search for a replacement for Brennan after she announced in October 2019 her intent to retire. The board reviewed the records of more than 200 candidates before narrowing the list to more than 50 candidates that underwent more in-depth vetting. The board interviewed more than a dozen candidates and followed up with seven of those.
A small list of candidates received final vetting before the choice of DeJoy.