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Former Postal Governor Tells Congress Mnuchin Politicized Postal Service Former Postal Governor Tells Congress Mnuchin Politicized Postal Service
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WASHINGTON — The former vice chairman of the U.S. Postal Service Board of Governors accused Treasury Secretary Steven Mnuchin on Thursday of politicizing the Postal Service, telling lawmakers that Mr. Mnuchin required members of the independent board to “kiss the ring” before they were confirmed and issued demands agency officials believed were “illegal.” WASHINGTON — The former vice chairman of the U.S. Postal Service’s board of governors accused Treasury Secretary Steven Mnuchin on Thursday of trying to engineer a hostile takeover of the service, telling lawmakers that Mr. Mnuchin required members of the independent board to “kiss the ring” before they were confirmed and issued demands that agency officials believed were “illegal.”
In testimony delivered before lawmakers in the Congressional Progressive Caucus, David C. Williams, a former Postal Service inspector general who resigned as vice chairman in April, detailed why he left the board. His statement to lawmakers accused the Treasury Department of trying to turn the agency into a “political tool.” In scathing testimony delivered before lawmakers in the Congressional Progressive Caucus, David C. Williams, a former Postal Service inspector general who resigned as vice chairman in protest in April, said the Trump administration appeared to want to turn the agency into a “political tool.” The Treasury Department, he said, was maneuvering to use its lending authority to strong-arm the agency to adopt policies that would be “ruinous,” like raising prices and cutting back crucial services.
“By statute the Treasury was made responsible for providing the Postal Service with a line of credit,” Mr. Williams said. “The Treasury was using that responsibility to make demands that I believed would turn the Postal Service into a political tool, ending its long history as an apolitical public infrastructure.” “If this is the beginning of what the president promised, it’s the end of the Postal Service,” Mr. Williams said in his first public comments since his resignation.
He resigned, he said, because he “was convinced that its independent role had been marginalized and that representations regarding an independent Postal Service for the nation were no longer truthful.” Mr. Williams, whose testimony came before a Senate hearing on Friday with the embattled postmaster general, Louis DeJoy, issued a blistering assessment of the new Postal Service leader. Mr. Williams, a Democrat appointed to the bipartisan board by President Trump, told lawmakers that Mr. DeJoy, a major donor to Mr. Trump and other Republicans, “didn’t strike me as a serious candidate” during interviews with him and other governors.
Mr. Mnuchin has been focused on overhauling the Postal Service since 2018, after it became a source of President Trump’s ire. The president believes that Postal Service is essentially subsidizing e-commerce companies such as Amazon and that it must raise shipping prices and strengthen its financial footing. Mr. Trump has publicly feuded with Amazon’s chief executive officer, Jeffrey Bezos. When he departed the board, on the eve of Mr. DeJoy’s selection, Mr. Williams said that no serious background investigation had been conducted — despite his request for one — and that a brief review by the agency’s inspector general had surfaced potential concerns about contract work Mr. DeJoy’s logistics firm had done for the Postal Service.
Mr. Mnuchin on Thursday rebutted suggestions that he had done anything but play his proper role as a lender to the Postal Service and in fulfilling his duty to try and help fix its financial woes. John M. Barger, the Republican board member who led the search process and whom Mr. Williams identified as having worked to advance Mr. DeJoy’s candidacy, disputed many of Mr. Williams’s claims in an interview. He asserted that Mr. Williams did not object to Mr. DeJoy’s hiring during the selection process. And he said Mr. DeJoy’s finances and corporate connections were subject to “extensive” review by the Postal Service’s general counsel, the Office of Government Ethics and a private security firm. “Everything checked out,” he said.
Mr. Mnuchin was assigned by Mr. Trump to lead a task force to study ways to reform the Postal Service and in late 2018 released recommendations that detailed changes the White House wanted to see implemented. Many of those changes have since been implemented by the new Postmaster General, Louis DeJoy. The accusations come as the Postal Service is embroiled in a political firestorm, with cost-cutting and other operational changes — such as reduced overtime for mail carriers — causing widespread delays in the mail system and raising concerns about the ability of voters to use mail-in ballots during the coronavirus pandemic.
That has landed the Postal Service in the middle of a political firestorm, as cost-cutting and other operational changes — such as reduced overtime for mail carriers — have caused widespread delays in the mail system and raised concerns about mail-in ballots ahead of the November presidential election. Those worries have been fueled by Mr. Trump, who has derided the Postal Service as a “joke” and repeatedly raised questions about the legitimacy of mail-in voting.
Worries about mail-in voting have been fueled by Mr. Trump, who derided the agency as a “joke” and has repeatedly raised questions about the legitimacy of mail-in voting and has encouraged voters to go to the polls instead of voting by mail. “The honorable thing to do is drop the Mail-In Scam before it is too late!” Mr. Trump said on Twitter last week.
“The honorable thing to do is drop the Mail-In Scam before it is too late!,” Mr. Trump said on Twitter earlier this month. Lawmakers, concerned about potential politicization of the Postal Service, have summoned Mr. DeJoy to testify in hearings before the Senate on Friday and the House on Monday.
Lawmakers from both political parties have raised concerns about the Postal Service’s ability to handle mail-in ballots and have summoned Mr. DeJoy, to testify in hearings before the Senate and House in the coming days. Mr. DeJoy plans to offer a detailed defense of his rocky tenure, justifying disruptive operational changes as long-planned and well-considered attempts to balance the postal budget and assuring lawmakers that the agency is fully prepared to handle November’s election.
Mr. Williams also told lawmakers on Thursday that he had raised concerns months ago about the possible selection of Mr. DeJoy and had suggested fellow board members investigate the executive’s background. According to prepared remarks submitted before Friday’s hearing and obtained by The New York Times, he planned to say that those actions meant to improve efficiency were unfairly twisted for political ends to suggest, incorrectly, that Republicans wanted to use the mail to help erode confidence in the election.
As the board moved to hire Mr. DeJoy, a major donor to Mr. Trump and other Republicans, to lead the multibillion-dollar agency this spring, Mr. Williams resigned in protest, citing his concerns about Mr. DeJoy as one reason. “I recognize that it has become impossible to separate the necessary long-term reform efforts we will need to undertake from the broader political environment surrounding the election,” Mr. DeJoy plans to tell senators. “And I do not want to pursue any immediate efforts that might be utilized to tarnish the Postal Service brand, particularly as it relates to our role in the democratic process.”
“I had expressed concerns after each of the interviews with Mr. Louis DeJoy,” Mr. Williams told two House Democratic lawmakers in a statement. “I urged that a background investigation be conducted. And when I resigned, I cited it as one of my reasons for submitting my resignation to Chairman Robert Duncan.” Thursday’s hearing centered in part on the role played by Mr. Mnuchin, one of Mr. Trump’s longest-serving cabinet members, who has been focused on overhauling the Postal Service. Mr. Trump assigned the Treasury secretary in 2018 to lead a task force to study ways to reform the Postal Service, which the president has accused of essentially subsidizing e-commerce companies such as Amazon by charging too little. He has demanded higher shipping prices.
The statement was disclosed on Thursday afternoon in a letter from Representatives Raja Krishnamoorthi of Illinois and Katie Porter of California, both Democrats, to John M. Barger, another Postal Service governor who spearheaded the search for the new postmaster general. Its release came just an hour before Mr. Williams was scheduled to testify. Mr. Mnuchin on Thursday rebutted suggestions that he had done anything but play a proper role as the federal government’s lender to the Postal Service and in fulfilling his duty to try to help fix its financial woes. In a letter to Senator Chuck Schumer of New York, the Democratic leader, Mr. Mnuchin explained his role as the chairman of the Federal Financing Bank, the Postal Service’s sole lender, and said he did not intervene to pave the way for Mr. DeJoy to be the postmaster general.
The lawmakers approached Mr. Williams to respond to comments Mr. Barger made to The New York Times on Wednesday. Mr. Barger said that he had “never heard an objection from David Williams about any of the candidates, other than the ones we did not hire” and that he was “surprised” by Mr. Williams’s resignation in late April, shortly before the board unanimously ratified the selection of Mr. DeJoy and announced it publicly. “Neither I nor any other Treasury official played any role in recruiting or suggesting Mr. DeJoy for the position of postmaster general,” Mr. Mnuchin wrote, adding that he was surprised to learn about the selection.
“I don’t recall him ever having objected to anything,” Mr. Barger told The Times, “or I would have asked him why. And it would have been considered.” Mr. Williams offered a starkly different picture of Mr. Mnuchin’s actions. He said the secretary sought to use his lending authority to win guarantees that he could approve postal price changes, labor agreements and service agreements negotiated with some of the agency’s largest customers like Amazon, UPS and FedEx.
David A. Partenheimer, a Postal Service spokesman, declined to comment on Mr. Williams’s claims. He said the board balked at Mr. Mnuchin’s demands, and he argued at the time that “a department cannot impose its will on another department.”
Treasury’s 2018 postal report offered a broad critique of the Postal Service’s business model and concluded that an antiquated mission along with changing market forces left the agency ripe for financial collapse. The report suggested that postal workers were overpaid relative to other government employees and private sector delivery services and that compensation reductions along with other cost cutting measures were needed. “The postal general counsel sent a letter saying that the transfer of our duties and decision-making authority to him was illegal,” he told lawmakers. “The Treasury went forward notwithstanding that.”
There were also recommendations to cut services, such as scaling back delivery days and making it easier to close post offices and remove mailboxes. The task force said that to be more cost efficient, the Postal Service should exercise “discretion to lower service standards.”
Updated August 17, 2020Updated August 17, 2020
This week, the watchdog group Citizens for Responsibility and Ethics in Washington, published a letters that were exchanged between Mr. Mnuchin and the Postal Service’s board of governors that indicated that Mr. Mnuchin met with some of the governors on Feb. 6 2020 to discuss the status of the search for a new Postmaster General. Mr. Williams had served for 13 years as the Postal Service’s inspector general before he was tapped as a Democratic appointee to the Republican-controlled board. A former Army intelligence officer, he had worked in similar watchdog roles at a handful of other agencies before that.
In a letter to the board in December 2019, Mr. Mnuchin underscored his interest in the process of finding a new leader for the Postal Service. Mr. Williams did not directly tie Mr. Mnuchin to the search for a new postmaster general, but he described a process that left him so uneasy he felt he had no choice but to quit.
“I would appreciate being kept apprised of the progress of your executive search, as appropriate,” Mr. Mnuchin wrote. The board of governors retained two outside firms, Chelsea Partners and Russell Reynolds Associates, to help facilitate the search. But Mr. Williams said he believed it was Mr. Barger who put Mr. DeJoy’s name into the mix “late in the process” and then championed his selection. He said he did not know how the two men met.
Mr. DeJoy, a former transportation and logistics executive, began the job in June and has quickly come under intense scrutiny for his continuing financial ties to his previous employer, which does business with the Postal Service, as well as cost-cutting initiatives that have slowed mail delivery. Mr. Barger said Mr. DeJoy’s name was included in a database of people being assessed by Russell Reynolds. But Mr. Barger said Mr. DeJoy was elevated into contention based on a recommendation by Robert M. Duncan, the chairman of the board of governors and a former chairman of the Republican National Committee.
Lawmakers of both parties, along with civil rights groups and state attorneys general, have raised concerns about the operational changes given the growing likelihood that many Americans will need to vote by mail this November because of the coronavirus pandemic. At a time when Mr. Trump is attacking mail-in voting, voting rights advocates fear that the slowdown in service could intentionally or incidentally undermine the integrity of the vote. Mr. Williams called Mr. DeJoy’s interviews with the governors a disaster and said he raised concerns at the time.
The candidate spent the first interview asking questions of the board members, not the other way around, prompting one governor to joke that they had better ask him at least one question or the session might not qualify as an interview.
Mr. Williams said the second session “went especially badly.” Mr. Barger, he recalled, repeatedly stepped into to clarify what Mr. DeJoy meant to say. He said that Mr. DeJoy was the only candidate the board interviewed who appeared to be unqualified for the job.
Mr. Barger said that all the candidates who made it to the interview round of the selection process asked questions of the board. He said he did not recall helping Mr. DeJoy answer questions, and he said Mr. DeJoy’s selection was unanimous, including a vote from Ron A. Bloom, a Democratic appointee to the board.
Mr. DeJoy began the job in June and has quickly come under intense scrutiny for his continuing financial ties to his previous employer, which does business with the Postal Service, as well as cost-cutting initiatives that have slowed mail delivery.
Lawmakers of both parties, along with civil rights groups and state attorneys general, have raised concerns about the operational changes given the growing likelihood that many Americans will need to vote by mail in November because of the pandemic.
Mr. DeJoy said on Tuesday that he would suspend some of the changes, but he has not committed to Democrats’ demands that he reverse some that are already in place, like the removal of hundreds of mail-sorting machines. Democrats are now trying to use Congress’s power to force him to do so and infuse $25 billion in emergency funding into the beleaguered agency, which has been rattled by the pandemic.Mr. DeJoy said on Tuesday that he would suspend some of the changes, but he has not committed to Democrats’ demands that he reverse some that are already in place, like the removal of hundreds of mail-sorting machines. Democrats are now trying to use Congress’s power to force him to do so and infuse $25 billion in emergency funding into the beleaguered agency, which has been rattled by the pandemic.
Mr. Williams, one of the Republican-controlled board’s designated Democratic members, had served for 13 years as the Postal Service’s inspector general. A former Army intelligence officer, he had worked in similar watchdog roles at a handful of other agencies before that.
Mr. Williams had not spoken publicly since he left the board of governors, but people familiar with his thinking have said he had grown increasingly alarmed about the politicization of the Postal Service and specifically the influence of the Treasury Department. Under Treasury Secretary Steven Mnuchin, a department task force has pushed for substantial cost-cutting changes at the Postal Service, which union leaders, Democrats and others contend are really an attempt to sabotage the agency to benefit private competitors.
In their letter, Mr. Krishnamoorthi and Ms. Porter asked Mr. Barger, who has also donated to Republicans, to detail “any possible coordination you may have had with political entities when recommending Mr. Louis DeJoy to the selection committee.”
The board of governors retained an outside firm, Russell Reynolds Associates, to help facilitate the search. But the lawmakers cite multiple unnamed people involved in the search saying that it was Mr. Barger, not the firm, who had injected Mr. DeJoy’s name into the process.
In the interview with The Times, Mr. Barger said that the candidates were vigorously vetted and that Mr. DeJoy’s selection had been unanimous.
Mr. DeJoy will testify before a Senate panel for the first time on Friday and before a House panel on Monday.
Kenneth P. Vogel contributed reporting.