On Thursday, the Washington Post reported that the FBI was investigating Trump-holdover Postmaster General Louis DeJoy for an alleged illegal campaign finance scheme from before his time in government.
DeJoy became infamous last year when he ordered wide-scale changes to the U.S. Postal Service that greatly deteriorated service at around the time that his benefactor, Donald Trump, was publicly promising to sabotage the Postal Service to try to stymie the pandemic-inspired movement toward universal mail-in voting. After the uproar, enough service was restored and the election went on smoothly enough that millions of voters cast their ballots by mail, and those votes accounted for Joe Biden’s victory over Trump.
Less well publicized, though, than the great Postal Service slowdown of 2020 and the overlapping election controversy was DeJoy’s role as a major Republican donor prior to his government service—and a possible illegal straw donor scheme he allegedly orchestrated during that time. The Washington Post first reported in September on allegations by former employees of DeJoy’s company that he pressured workers to donate to Republican causes and then reimbursed them via bonuses. All of this would be a clear violation of the law, and it is what the Department of Justice is reportedly investigating now after local law enforcement in North Carolina in April said it would not be moving forward with the case.
There’s one major hitch, though. The Post investigation was only able to report on sources willing to describe an alleged straw donor scheme that began in 2000 and ran till 2014, the year DeJoy sold his company New Breed Logistics to XPO Logistics. The issue is: There’s a five-year statute of limitations on this particular campaign finance crime, so any offenses would have had to be committed after summer 2016 in order to prosecute.
Unless DeJoy’s offenses extended beyond the period that the Post covered, that statute of limitations will be difficult to get around. In civil law, the statute of limitations can be “equitably tolled,” or delayed for various obscure reasons. In criminal law, though, this is much less common. As Lindsey Powell wrote in the American Criminal Law Review in 2008, there is a “general absence” of equitable tolling principles under the “federal criminal limitations regime.” Under criminal law, she writes, “statutes of limitations begin to run from the completion of the offense and are tolled by the filing of an indictment or information.” The main criminal tolling principles involve a suspect fleeing from justice, which is not the case for DeJoy.
How then might federal prosecutors be able to charge DeJoy for alleged involvement in such a straw donor scheme? Again, they would have to find criminal activity that extended into the summer of 2016. According to multiple sources, though, finding such activity as part of a complex conspiracy such as the one alleged by the Post is actually quite plausible.
Before the Post reported on DeJoy’s alleged scheme, Rep. Jim Cooper asked him point-blank during sworn congressional testimony if he had paid “back several of your top executives for contributing to Trump’s campaign by bonusing or rewarding them?” DeJoy forcefully denied it. Cooper then said he was merely trying to ensure that all campaign contributions were legal, and DeJoy responded, “I’m fully aware of legal campaign contributions, and I resent the assertion, sir.”
In an interview shortly after that testimony, I asked Cooper why he hadn’t asked about the period extending prior to Trump’s 2015 run, as DeJoy’s denial might technically not be a lie if he didn’t continue the scheme after he sold the company. Cooper told me that he believed it was possible the scheme was ongoing even after 2014.
“Although he was not the CEO of his own company New Breed in 2016, he was a highly compensated and very important employee of XPO, and I think he ran his own division,” Cooper told me. “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.”
These are the areas that any FBI investigations will presumably delve into—DeJoy himself has already been issued a subpoena, according to the Post. Indeed, in its reporting on the FBI investigation, the Post noted a report from the Campaign Legal Center advocacy group that indicated the behavior may have extended past the time the Post initially reported:
Between 2015 and 2018, the group alleged, campaign finance records showed “several instances of XPO employees contributing to the same candidate or committee, during the same period of time, and often in similar amounts,” and that “DeJoy family members, including DeJoy’s college-aged children, also made contributions on the same day or in the same period as those employees.”
“Between 2015 and 2018, XPO Logistics employees and DeJoy family members following this pattern together gave over $150,000 to the same candidates and committees, including over $50,000 to Trump Victory, President Donald Trump’s joint fundraising committee,” the group alleged.
Miriam Baer, a professor at Brooklyn Law School and former criminal prosecutor in the U.S. Attorney’s Office for the Southern District of New York, also sees potential avenues for the Department of Justice investigation. Baer says:
Conspiracies can be continuing offenses, so for example if part of the straw donor scheme is that the donor is pressured to make a contribution but gets the money back some time later, I would think that a prosecutor would argue—and I think successfully—that the scheme lasts as long as it takes for the person to get their money back. In other words, if it’s a straw donor scheme and ‘we will repay you for the donation we coerced you to make’ then you can say that the repayment is part of the scheme, so if the repayment occurs within five years, I think you could make a pretty strong argument that the scheme is still ongoing.
Given that DeJoy’s former human resources director, David Young, told the Post that the repayment as part of the straw donor scheme “covered the tax and everything else,” this possibly could extend that payment period from the election year to the year after, when taxes would have been paid on any of the bonuses. Additionally, Baer said, any effort DeJoy may have made to influence underlings after the fact to deny involvement in the scheme could add obstruction of justice charges that would be within the statute of limitations.
What about DeJoy’s testimony before Congress indignantly denying that he had taken part in any Trump-related straw donor scheme? Could that open the door to perjury charges? Experts say that perjury is a very difficult case to make, which would make it unlikely here.
“It is one of the hardest crimes to prove and some would say rightfully,” Baer says. “We don’t want to punish people for answering questions that are themselves imprecise.” A good defense attorney would be able to parse Cooper’s questions and DeJoy’s answers and “say that question was imprecise” or DeJoy’s response “was technically answering correctly,” Baer notes.
But if elements of the straw donor scheme or efforts to cover it up extended into the summer of 2016 and beyond, then proving perjury would be entirely unnecessary.
Given the leeway that the Biden DOJ has shown to Trump and his former officials so far, one wonders if DeJoy had merely decided to tuck his tail between his legs and retreat from public life following Trump’s defeat, he might have avoided further criminal scrutiny. Because of the quirks of the USPS board of governors system, though, he has been allowed to remain in office and decided to stick it out to push through his plans for slower service and higher prices.
If federal prosecutors can prove that DeJoy’s alleged criminal behavior extended into the Trump era, that decision could prove very costly indeed.