The Slatest

Why Did the House Ask the Postmaster General About Illegal Campaign Donations?

Rep. Jim Cooper explains how straw-donor allegations came to his attention.

DeJoy seated during the hearing, speaking into a mic
Postmaster General Louis DeJoy testifies during a House Oversight and Reform Committee hearing on Capitol Hill on Aug. 24. Tom Williams/Pool/AFP via Getty Images

On Monday, the House Oversight Committee confirmed in a statement that it would investigate charges that Postmaster General Louis DeJoy illegally pressured employees of his former company Breed Logistics to donate to Republican causes and then paid them back in bonuses.

According to reporting in the Washington Post, DeJoy may have violated state and federal law with the bonus payments, which his former human resources director said included repayments for taxes and which the Securities and Exchange Commission reportedly investigated in 2013.

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Allegations of an illegal straw-donor scheme first came up during congressional testimony last month, when Rep. Jim Cooper of Tennessee asked DeJoy if he had paid back with bonuses or other rewards several of his top executives for contributing to Trump’s presidential campaign. DeJoy responded angrily. “That’s an outrageous claim, sir, and I resent it. The answer is no.”

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When Cooper asked the postmaster general if all of his campaign contributions were legal, DeJoy responded, “I’m fully aware of legal campaign contributions, and I resent the assertion, sir. What are you accusing me of?”

I spoke with Cooper on Wednesday to ask him about why he focused on straw donations, if he believes DeJoy perjured himself, and what he thinks the next steps for his committee should be. The following transcript has been shortened for length and clarity.

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Jeremy Stahl: How did you know to ask DeJoy about the straw donors? It obviously put him on his back heel.

Jim Cooper: Number one, I’m a nerd and I usually do my homework. Number two, I got a tip from a friend in North Carolina. I went to college there and I have a lot of friends in North Carolina. Number three, my senior paper at Harvard Law School was on exactly this topic, so I know a lot about it.

During that testimony, DeJoy professed to take offense at your question. He then denied taking part in any such scheme. Technically, his denial may have been accurate and he may not have lied to you, because you asked him specifically about donations made to the Trump campaign. The allegations in the Post only include a period between 2000 and 2014. Do you regret a little bit not asking him about that earlier period? Do you think he lied to you?

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On the last question, I won’t know whether he lied or not until there’s a judicial proceeding. On the specific question, he was appointed by Trump, his contributions go way back, and the federal statute of limitations is, I think, five years. So, contributions before that in previous campaigns would not be covered by federal law, but would probably be covered by state law.

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You only have five minutes to ask questions, and I covered a lot of ground. The overall thrust of my questions was whether he was above the law. He said in an answer to an earlier question he doesn’t think he is. But then I gave three examples of how he’s acted above the law. First was the postal worker situation, where if you delay a single piece of mail, that can be a felony, five years in prison. So, is it OK to delay all the mail? There’s no exception in the law for people who commit wholesale as opposed to retail crimes. The second point is does he think he’s above other postmasters general? I listed a specific postmaster general who was fined $27,000 for a relatively minor conflict of interest. DeJoy’s [conflict] is probably 100 times larger. He would have to pay a $2.7 million fine if he were treated the way the previous postmaster general was treated, but he didn’t really seem worried about that either.

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He came off blustery and defensive when I asked him the campaign finance question, because in my opinion—it’s only my opinion—he probably knew he was guilty. Because if the statement in the Washington Post is correct from his HR manager of all those years, he not only reimbursed his employees, he paid their taxes. That’s like tying a bow on top of the crime. He was so acutely sensitive that they might be still out of pocket something—in other words made a real contribution—that he even paid their taxes. That is stunning.

Given that there is a federal statute of limitations, it seems that the Justice Department can’t then go back and charge this. Based on your perch on the Oversight Committee, what do you think Congress should be doing? What do you think you should be doing in terms of requesting or even subpoenaing documents from his former companies to get at the truth about this?

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First, I think you’re giving up too quickly, because although he was not the CEO of his own company New Breed in 2016, he was a highly compensated and very important employee of [the company that purchased New Breed], XPO [Logistics], and I think he ran his own division. And I don’t know exactly how much responsibility he had, but my guess is when you run your own division, you get to recommend pay and bonus levels. So it remains to be seen exactly what happened at XPO. Now, publicly traded companies are more disciplined than private ones. That’s why when he thought of taking his company public in 2013, even the SEC accountants discovered this, that he had probably been reimbursing employees.

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We should subpoena XPO and New Breed employees who were under DeJoy, we should subpoena the SEC accountants who caught it just with a routine audit, and we should probably subpoena some of these investment bankers and parent companies … who have intimate knowledge of the books and they condone these practices. This was the subject of my paper at Harvard. There are hundreds of thousands of corporate executives who are coerced every year to give money to candidates they hate, and they hate it. So the law says these contributions should be voluntary, but this is one of the most widely abused laws in America, at least in my opinion. But it’s very difficult to catch people who are coercing employees. When you find a CEO who treats his company as a piggy bank and who even pays the taxes of the people who were coerced, [that’s] pretty definitive proof. So this is a pretty amazing case, not only to save the post office, but ideally to clean up a good bit of corporate America.

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Do you have any sort of timetable about when the committee might dig into such an investigation? I know that Chairwoman Carolyn Maloney said on Monday that the committee would be investigating.

I plan on calling her this afternoon, and there’s an excellent committee staff as well. And subcommittee Chairman Gerry Connolly is planning on having a post office hearing on Monday, and I plan on attending. Now it’s on other topics, but there’s no real germaneness rule in hearings, as there is on the floor. So I think you’re going to see the committee proceed, the congressional phrase is, expeditiously. That’s a lot of syllables for quickly.

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