Backgrounder on Postmaster General Louis DeJoy’s Known Financial Holdings and Conflicts of Interest
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Backgrounder on Postmaster General Louis DeJoy’s Known Financial Holdings and Conflicts of Interest

TALLY: Louis DeJoy, the new Postmaster General, has at least $30 million and possibly more than $75 million, invested in XPO Logistics, a contractor and competitor of the U.S. Postal Service. Some components of his financial ties to XPO Logistics have been under-reported.

STOCKS: Mr. DeJoy had between $30,250,003 and $75,500,000 invested in XPO Logistics as of 3/2020.

He also had dividends or gains this past year of between $1.6 million and $11.1 million on that stock. His stock investments include restricted units he can sell later.

XPO is a major national logistics/supply chain/shipping firm that has had contracts with the USPS. DeJoy merged New Breed with XPO in 2014.

LEASES: DeJoy also benefits from five-year renewable leases on nearly 150,000 square feet of warehouse and office space in High Point, NC, between XPO Logistics and LLCs controlled by DeJoy, with rent of nearly $2 million a year. If these leases are held for their full potential term, they are worth nearly $30 million through 2029.

LLCs: The Louis DeJoy and Aldona Wos Family Partnership holds between $5 million and $25 million dollars of the XPO Logistics stock noted above (which should not be double counted). That Partnership is also the entity that holds the property leased to XPO. Dr. Wos is married to Mr. DeJoy. President Trump has nominated her to be appointed the U.S. Ambassador to Canada. She had to complete a financial disclosure form as part of that nominatin process. That form, which was obtained by True North, is uploaded below.

EQUITY: DeJoy has between $2.5 million to $11 million invested in two Warburg Pincus private equity funds. That investment produced income of between $200K and $2 million in the past year. Starting in 2005, Warburg Pincus held a major stake in DeJoy’s company, New Breed, and orchestrated its 2014 merger with XPO.

It is not known how much XPO stock Warburg Pincus holds, if any.

Dr. Wos also listed DeJoy as having liabilities with the firm in the form of capital commitments to Warburg totaling between $5,250,000 and $25,500,000. It is not known what those capital commitments are invested in, but Warburg Pincus has been a long-time financial partner of DeJoy and New Breed/XPO.

Warburg Pincus has used its private equity to secure stakes in other logistics companies across the globe that could financially benefit from privatizing or parting out the U.S. Postal Service. It has previously invested in a joint effort to secure pension buyouts. It has also helped UPS acquire other firms, like Coyote Logistics, to expand its reach. (Its current leader is Tim Geithner, who formerly served as the Secretary of the Treasury under President Barack Obama.)

TRUSTS: Dr. Wos’ financial disclosure form also lists four “Family Trusts,” two of which include XPO stock and two of which are described as mixed-use real estate in NYC only, with gains or revenue of between $100,001 and $1 million, but which do not indicate whether the tenants are companies or individuals. Notably, two of DeJoy’s donations to GOP campaigns in January of this year were written on the account of the Louis DeJoy Revocable Trust, which could be Family Trusts #1, #2, #3, or #4 on Dr. Wos’ form. These are not blind trusts but are interlinked investments.

NON-PROFIT: The Louis DeJoy and Aldona Z. Wos Family Foundation held at least $21 million in “securities” as its primary asset as of its last available 990 filed at the end of 2017. That form does not include a schedule listing the holdings that constitute those securities. Its non-taxable assets surged by $21 million in 2014 after DeJoy sold New Breed to XPO and made a cash gift to the charity. Its securities could be mutual funds or could be stock that includes competitors of the U.S. Postal Service. It is not known.

The fact that the American people do not know the actual financial holdings of the Trump funder heading the Postal Service is unacceptable, especially as he has ordered or presided over disruptions that have sabotaged prompt mail delivery and could destabilize our 2020 election.

Additional Background:

Louis DeJoy, the new Postmaster General, is under fire for dramatic changes to the U.S. Postal Service that have disrupted and delayed mail service and could fuel chaos in the November elections.

Earlier this year, before he was appointed Postmaster General, DeJoy gave the Trump campaign, PACs, and the RNC nearly $600K in the span of weeks. He also gave to other GOP campaigns. In the 2019-2020 cycle, he gave more than $1.5 million to GOP candidates, parties, and PACs. This does not include money given to dark money groups to influence the 2020 election, if any.

DeJoy is the first Postmaster General since 1970–when the position was changed from being a political appointment to the Cabinet–who never worked for the U.S. Postal Service. He is also the first to donate such sums to partisan political campaigns in an election year or any year since the 1970 reforms.

But there’s more.

The potential conflicts of interest of DeJoy that have not been fully examined because there has been no public release by him or the Postal Service of his current financial holdings and those at the time of his hiring.

The Postal Service’s Board of Governors has not posted any financial disclosure forms submitted by DeJoy as part of his appointment process, or any ethics waivers given, if any. (CNN gave a description of what the Board of Governors knew about his financial holdings as of June, but that document has not been published by the Postal Service.)

One of the only ways to assess his potential conflicts is to examine the form filed with the Office of Government Ethics by his wife, Aldona Wos, whom Trump has nominated to be Ambassador to Canada.

Notably, that form was signed off by White House official David Apol, who signed off on Jared Kushner’s ethics forms and whom former chief ethics officer Walter Shaub has criticized for being too lax in waiving away potential conflicts of Trump appointees. (If DeJoy received a waiver of any kind in connection with the appointment to be Postmaster General, it is important to know who signed off on any such clearance or waiver and who reviewed it.) Additional sources of information include SEC filings about the purchase of DeJoy’s company, New Breed, to XPO Logistics, which has been a contractor of the U.S. Postal Service and is a competitor.

DeJoy’s wife’s disclosure form, which was accepted in March, reveals substantial holdings by DeJoy in a major competitor of the U.S. Postal Service: XPO Logistics, Inc. However, the form obscures other holdings of XPO financial ties as of 2020. It also does not reveal the specific “securities” held by the foundation she leads with DeJoy.

Her disclosure stated that DeJoy was holding XPO stock valued at between $30,250,001 and $75,000,000, including between $250,001 and $500,000 of vested restricted stock units. They had capital gains of between $1.6 million and $11.1 million on that stock, other than the restricted units. 

Her disclosure form noted that he also controlled several real estate holding firms, valued at between $31 million and $155 million. However, the form did not require her to disclose that one of the major tenants of nearly 150,000 square feet of the real estate in DeJoy’s control is XPO Logistics, which pays DeJoy’s LLCs/partnership nearly $2 million a year in rent. 

There’s more. The form also shows that DeJoy is invested in Warburg Pincus, a private equity firm that owned a stake in his family shipping company, New Breed. Warburg Pincus helped arrange the sale of New Breed to XPO Logistics. Warburg Pincus is known as an investor that acquires firms engaged in the delivery of goods and logistics (and has orchestrated such deals here and abroad).

According to Wos’ disclosure form, DeJoy has between $2.5 million to $11 million invested in Warburg’s private equity–which provided income of between $200K and $2 million in the past year. DeJoy also reportedly had liabilities with the firm in the form of capital commitments to Warburg totallng between $5,250,000 and $25,500,000.

Additionally, the form lists four “Family Trusts.” Two of DeJoy’s donations to GOP campaigns in January of this year were written on the account of the “Louis DeJoy Revocable Trust,” which is not the name used on Wos’ form, which refer to Family Trusts #1, #2, #3, and #4, per OGE guidance. These are not blind trusts:

Family Trust #1

50% of Sandy Point Investments LLC 

40% of DeJoy Family Partnership LLC (which includes XPO stock)

Family Trust #2

50% of Sandy Point Investments LLC

40% of DeJoy Family Partnership LLC (which includes XPO stock)

Family Trust #3

Wos Associates LLC (described as mixed-use real estate in NYC and rent or capital gains of $100,001 to $1 million; no indication of who its commercial tenants are)

Family Trust #4

Wos Associates LLC (no valuation, but described as mixed-use real estate in NYC and rent or capital gains of $100,001 to $1 million; no indication of who its commercial tenants are)

LDJ Global Strategies (Real Estate Investing & Management, Greensboro, NC) (10% of which is own by the DeJoy Family Partnership)

DeJoy Family Partnership (20% of which is owned by DeJoy himself and 80% is held by Family Trusts #1 and #2)

Additional Background on the Leases with XPO Logistics

DeJoy secured substantial leases with XPO that could provide nearly $2 million of revenue per year through 2029, to wit, according to SEC filings:

 “[T]he company leased office space from two entities partially owned and controlled by Louis DeJoy, a member of our Board of Directors. In September 2014, in conjunction with the company’s acquisition of New Breed Holding Company, XPO Logistics, through certain of our subsidiaries, entered into four commercial lease agreements covering a total of approximately 142,991 square feet of office space located in High Point, N.C., with the entities affiliated with Mr. DeJoy.

The non-cancellable lease agreements expire at various dates in 2019. Each lease agreement provides the company, as tenant, with two five-year option periods to extend the lease term. The company made rent payments associated with these lease agreements in an aggregate amount of $2.0 million for the year ended December 31, 2016. In addition, the company paid operating expenses in connection with these leased properties of $0.3 million for the year ended December 31, 2016.)”

Leased Property             Square Footage              Annual Payment (2015-2019) 

4000 Piedmont Parkway             26,809               $348,316

4035 Piedmont Parkway             46,082               $567,989

4043 Piedmont Parkway             52,100               $695,679

4239 Piedmont Parkway             18,000               $240,000

Each lease agreement provides the Company, as tenant, with two five-year option periods to extend the lease term.”

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As of August 2020, XPO Logistics lists an address in High Point that corresponds with DeJoy’s properties, including: 4035 Piedmont Parkway Associates, LLC (which is listed with a value of between $5,000,001 – $25,000,000  and rent of  between $100,001 – $1,000,000, as disclosed in Dr. Wos’ financial disclosure form, which can be viewed below).

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