07 Sep 2020, 20:05
07 Sep 2020, 20:42
Louis DeJoy’s prolific campaign fundraising, which helped position him as a top Republican power broker in North Carolina and ultimately as head of the U.S. Postal Service, was bolstered for more than a decade by a practice that left many employees feeling pressured to make political contributions to GOP candidates — money DeJoy later reimbursed through bonuses, former employees say.
Five people who worked for DeJoy’s former business, New Breed Logistics, say they were urged by DeJoy’s aides or by the chief executive himself to write checks and attend fundraisers at his 15,000-square-foot gated mansion beside a Greensboro, N.C., country club. There, events for Republicans running for the White House and Congress routinely fetched $100,000 or more apiece. Two other employees familiar with New Breed’s financial and payroll systems said DeJoy would instruct that bonus payments to staffers be boosted to help defray the cost of their contributions, an arrangement that would be unlawful.
“Louis was a national fundraiser for the Republican Party. He asked employees for money. We gave him the money, and then he reciprocated by giving us big bonuses,” said David Young, DeJoy’s longtime director of human resources, who had access to payroll records at New Breed from the late 1990s to 2013 and is now retired. “When we got our bonuses, let’s just say they were bigger, they exceeded expectations — and that covered the tax and everything else.”
Another former employee with knowledge of the process described a similar series of events, saying DeJoy orchestrated additional compensation for employees who had made political contributions, instructing managers to award bonuses to specific individuals.
“He would ask employees to make contributions at the same time that he would say, ‘I’ll get it back to you down the road,’ ” said the former employee, who, like others interviewed for this report, spoke on the condition of anonymity out of fear of retribution from DeJoy.
In response to a series of detailed questions from The Washington Post, Monty Hagler, a spokesman for DeJoy, said the former New Breed chief executive was not aware that any employees had felt pressured to make donations. After repeatedly being asked, Hagler did not directly address the assertions that DeJoy reimbursed workers for making contributions, pointing to a statement in which he said DeJoy “believes that he has always followed campaign fundraising laws and regulations.”
Hagler said DeJoy “sought and received legal advice” from a former general counsel for the Federal Election Commission “to ensure that he, New Breed Logistics and any person affiliated with New Breed fully complied with any and all laws. Mr. DeJoy believes that all campaign fundraising laws and regulations should be complied with in all respects.” He added that DeJoy “encouraged employees and family members to be active in their communities, schools, churches, civic groups, sporting events and the politics that governs our nation.”
“Mr. DeJoy was never notified by the New Breed employees referenced by the Washington Post of any pressure they might have felt to make a political contribution, and he regrets if any employee felt uncomfortable for any reason,” he added.
A Washington Post analysis of federal and state campaign finance records found a pattern of extensive donations by New Breed employees to Republican candidates, with the same amount often given by multiple people on the same day. Between 2000 and 2014, 124 individuals who worked for the company together gave more than $1 million to federal and state GOP candidates. Many had not previously made political donations, and have not made any since leaving the company, public records show. During the same period, nine employees gave a combined $700 to Democrats. Although it can be permissible to encourage employees to make donations, reimbursing them for those contributions is a violation of North Carolina and federal election laws. Known as a straw-donor scheme, the practice allows donors to evade individual contribution limits and obscures the true source of money used to influence elections. Such federal violations carry a five-year statute of limitations. There is no statute of limitations in North Carolina for felonies, including campaign finance violations.
The former employees who spoke to The Post all described donations they gave between 2003 and 2014, the year New Breed was acquired by a Connecticut-based company called XPO Logistics. DeJoy remained at XPO briefly in a leadership role, then retired at the end of 2015. By a year after the sale, several New Breed employees who had stayed on with XPO were giving significantly smaller political contributions and many stopped making them altogether, campaign finance records show. In a statement, XPO spokesman Joe Checkler said the company “stays out of politics but our employees have the same individual right as anyone else to support candidates of their choosing in their free time. When they do so, we expect them to adhere strictly to the rules.”
The accounts of DeJoy’s former employees, which have not been previously reported, come as his brief tenure so far at the helm of the U.S. Postal Service has been marked by tumult. After his appointment in May, he swiftly instituted changes he said were aimed at cutting costs, leading to a reduction of overtime and limits on mail trips that postal carriers said created backlogs across the country. Democrats have accused DeJoy, who has personally given more than $1.1 million to Trump Victory, the joint fundraising vehicle of the president’s reelection campaign and the Republican Party, of seeking to hobble the Postal Service because of the president’s antipathy to voting by mail. As states have expanded access to mail voting because of the coronavirus pandemic, Trump has repeatedly attacked the practice and claimed without evidence that it will lead to rampant fraud.
The Postal Service chief emphasized to House lawmakers last month that the agency will prioritize election mail. Responding to questions about his fundraising, DeJoy scoffed. “Yes, I am a Republican. . . . I give a lot of money to Republicans.” But he pushed back fiercely on accusations that he was seeking to undermine the November vote. “I am not engaged in sabotaging the election,” DeJoy said. “We will do everything in our power and structure to deliver the ballots on time.” During his testimony, DeJoy was asked by Rep. Jim Cooper (D-Tenn.) if he had repaid executives for making donations to the Trump campaign.
“That’s an outrageous claim, sir, and I resent it. . . . The answer is no,” DeJoy responded angrily.
DeJoy had retired from XPO management by 2016. He hosted Trump at his Greensboro estate, known locally as The Castle, for a birthday party and fundraiser in June 2016. Earlier this year, DeJoy was leading fundraising for the Republican National Convention in Charlotte when he was selected by the Postal Service’s Board of Governors in May. DeJoy was not originally on a list of prospective candidates for the job, Robert M. Duncan, chairman of the USPS Board of Governors, told House lawmakers in testimony last month. Duncan, a longtime GOP fundraiser, said he submitted DeJoy’s name as a candidate after his “interest, or availability, became known to me.”
A pattern of requests
Multiple New Breed employees said DeJoy’s ascent in Republican politics was powered in part by his ability to multiply his fundraising through his company, describing him as a chief executive who was single-minded in his focus on increasing his influence in the GOP. In his office, DeJoy prominently displayed pictures of himself with former president George W. Bush; Sen. John McCain, who died in 2018; former New Jersey governor Chris Christie; former vice-presidential candidate Sarah Palin and others, according to former employees. Several employees said DeJoy reveled in the access his fundraising afforded him.
At a local PGA tournament sponsored by New Breed, he played alongside top North Carolina Republicans such as then-Gov. Pat McCrory and Sen. Richard Burr, according to schedules posted online. “He always had to be the guy in the golf cart with the politicians,” said one person who worked with him who attended the tournaments. As DeJoy’s profile as a Republican bundler grew, his wife, Aldona Wos, won presidential and gubernatorial appointments — first as an ambassador to Estonia in 2004, then as head of North Carolina’s health and human services agency in 2013. Trump appointed her in May 2017 to serve on the president’s commission on White House fellowships, and earlier this year, he nominated her to be ambassador to Canada.
DeJoy and trusted aides at the company made clear that he wanted employees to support his endeavors — through emails inviting employees to fundraisers, follow-up calls and visits to staffers’ desks, many said.
“He would put pressure on the executives over each of the areas to go to their employees and give contributions,” one former employee said. While some employees told The Post that they were happy to make the donations, others said they felt little choice, saying DeJoy had a heavy-handed demeanor and a reputation for angering easily.
Plant managers at New Breed said they received strongly worded admonitions from superiors that they should give money when DeJoy was holding fundraisers. A program manager said that when he was handed his first company bonus, a New Breed vice president told him he should buy a ticket to DeJoy’s next fundraiser. Several employees said New Breed often distributed large bonuses of five figures or higher. Bonuses did not usually correlate with the exact amount of political contributions, but were large enough to account for both performance payments and donations, according to the two people with knowledge of company finances.
Five former employees said DeJoy’s executive assistant, Heather Clarke, personally called senior staffers, checking on whether executives were coming to fundraisers and collecting checks for candidates. Clarke, who now works alongside DeJoy at the Postal Service as his chief of staff, did not respond to repeated requests for comment. Phone messages left with Clarke’s husband were returned Friday by Hagler, who said she would have no comment.
Clarke was among several non-executive employees who gave substantial political donations, public records show: She alone contributed $47,000 from 2002 to 2014. Clarke has continued to donate since then, but at about half the annual rate as when she worked at New Breed. Another longtime senior official in DeJoy’s company, Joe Hauck, also routinely contacted company employees urging them to contribute, former workers said.
In an interview, Hauck denied that the company reimbursed New Breed employees for political contributions. He said he never received any bonuses for that purpose, nor was he offered any. “That’s illegal — you can’t do that,” said Hauck, who was vice president for sales, marketing and communications when the company was sold. Hauck did acknowledge approaching employees and asking them to contribute, but disputed that he pressured anyone.
“I created a list of people that had indicated that they were interested. And whenever there was an event coming up, I would let them know about the event and they would either say, ‘Yeah, I want to participate’ or ‘No, I don’t,’ ” he said.
Hauck said he sometimes did collect checks for candidates in the office, but only because some employees “happened to have their checkbooks on them.” Another manager also said he was not aware of employees being reimbursed, but acknowledged that workers were asked to make donations.
William Church, a former New Breed vice president, said he handed out many bonuses to his employees in the company’s aerospace division and never had knowledge of such payments being connected to political contributions. He said bonus targets in his division were rigid and well-established. Church, who donated over $21,000 to Republican candidates while at New Breed and said he received substantial bonuses, said he never felt pressured to make the contributions and was never reimbursed for them. “Ask my wife, boy, she would have loved that,” Church said.
Asked whether he believed employees could have felt pressure to attend fundraisers, Church responded: “Now, what’s in somebody’s heart when they’re doing it, when the CEO invites you to one of these things and they think, ‘Oh, I should do that?’ — I don’t know.”
Steve Moore, who took a job as plant manager of a New Breed facility in Bolingbrook, Ill., in 2007, said he felt pressured to contribute just a few months into his job. DeJoy sent managers an email announcing a fundraising event at his house for former New York mayor Rudolph W. Giuliani, then a candidate for president. Moore said his manager, Philip Meyer, soon followed up, telling him that making a contribution was “highly recommended,” even if he would not attend.
“I took that to mean my job is on the line here, or things won’t go smooth for me here at New Breed if I didn’t contribute,” Moore said in an interview. He donated $250. “I didn’t really agree with what was going on,” he said. Moore said he was terminated in 2008 after a dispute with his supervisors. In a text message, Meyer declined to comment.
One of the biggest beneficiaries of donations from New Breed employees has been GOP Sen. Thom Tillis of North Carolina, whose campaign committees collected nearly $300,000 from people at the company in 2014, campaign finance records show. When asked for comment on the accounts of employees who said they were pressured to donate to DeJoy’s favored candidates, Andrew Romeo, a spokesman for Tillis’s campaign, said in an email: “Neither Senator Tillis nor our campaign had knowledge of these findings.”
'You feel the pressure'
DeJoy did not always seem destined for a life as an influential GOP power broker. As a young man in New York working at his father’s trucking business, DeJoy donated to Democrats, including the party’s 1988 presidential nominee, Michael Dukakis, according to federal campaign finance filings. After his marriage to Wos, a physician born in Poland who emigrated to New York as a child, DeJoy followed her into conservative politics. Under DeJoy, New Breed expanded from trucking to logistics, managing delivery and returns of the first iPhones sold by Verizon, airplane parts for Boeing and Disney merchandise, including shipments of MagicBands, employees said.
By the late 1990s, as the family business flourished, thanks in part to contracts with the U.S. Postal Service, DeJoy moved New Breed to North Carolina — and closer to the work it was doing repositioning mail crates, folding mail bags, and other logistical work that the government had begun to outsource. The move provided new political opportunities for the couple. Wos embraced North Carolina Republican politics and, by the early 2000s, was stepping into national campaigns. She helped lead fundraising efforts in the state for Elizabeth Dole’s 2002 Senate run, and then for Bush’s reelection campaign, according to campaign statements and news articles from the time.
DeJoy began to marshal his resources to support GOP candidates, as well. On one day in February 2002, DeJoy donated $50,000 to a Republican Party fund supporting Bush’s campaign, according to Federal Election Commission records. Another $10,000 came from DeJoy’s brother, Michael, who worked then for New Breed in New York. Another 10 New Breed employees also chipped in $1,000 each that day to Bush, and another $900 or $1,000 each to Dole, campaign finance data show.
In response to a request to Wos for comment, Hagler said, “Dr. Wos had her own career, and she was not involved with New Breed Logistics.” Young, the retired director of human resources, said it was during the 2004 Bush reelection campaign that he saw DeJoy begin to “take advantage” of his power as CEO to move money for politics.
“No one was ever forced to or lost a job because they didn’t, but if people contributed, their raises and their bonuses were bumped up to accommodate that,” said Young, who gave more than $19,000 in donations while he worked at New Breed. Ted Le Jeune, a New Breed project manager in North Carolina, said he made a $500 contribution to the Bush campaign in November 2003 after DeJoy took him aside for a discussion in a conference room about donating.
“I was of the same political orientation, so it was not coerced in any way and there was no quid pro quo,” Le Jeune said in an interview. Le Jeune said he has not donated to any political campaign since then.
In 2002, DeJoy and New Breed employees contributed more than $87,000 to support Dole, and before the 2004 presidential election, more than $121,000 to Bush. Wos was named a Bush “Ranger,” an honorary term for those who delivered at least $200,000 for the Texan’s reelection bid. In a recess appointment before the election, Bush appointed her ambassador to Estonia, a post she held for two years.
Freddy Ford, a spokesman for Bush, declined to comment. Wos did not respond to a request for comment about her appointment. By 2007, DeJoy was carving his own path politically. With Giuliani leading in early polls for the Republican nomination for president, DeJoy signed on as co-chair of the former mayor’s North Carolina finance committee.
New Breed employees quickly followed.
DeJoy kicked off his fundraising effort by inviting a group of senior New Breed executives who had previously donated to Republicans while at the company to contribute, according to one of those who wrote a check. Campaign finance records show that New Breed employees gave Giuliani’s campaign more than $27,000 in one day. Giuliani did not respond to a request for comment.
Less than a month later, when Giuliani made a swing through North Carolina, DeJoy invited a broader group of New Breed employees to contribute and take part in a fundraiser, according to people familiar with his outreach. The second effort netted about $40,000 from employees, campaign finance records show. Moore, the plant director in Illinois, said he received the email inviting employees to give — and he donated reluctantly. Another middle manager at another New Breed facility said he received the solicitation, too, as well as encouragement in person from Meyer during a plant visit.
“He would come to me and say, ‘Louis is having this thing, and he really wants all the managers there, and you need to contribute,’ ” said the former employee, who spoke on the condition of anonymity, saying he fears DeJoy could sue him.
The former employee said he recalled Meyer saying that not contributing was “not going to have any bearing on your job.” But he worried that the reverse was true, he said. “You feel the pressure. They tell you it’s not there, and then they put it on you,” he said.
In the North Carolina headquarters, Joel Shepard, who had joined New Breed as director of transportation after stints at Ryder and UPS, said he got a call from Clarke, DeJoy’s executive assistant, making sure Shepard knew that he, too, was invited. Shepard had never donated to a political candidate before, and he wrote a check for $1,000. He said he did not feel pressured, however. He said he admired Giuliani and “wanted to do it.” Shepard said he still recalls the donation because he mistakenly wrote the check from an account that was low on funds and it bounced. Clarke, DeJoy’s executive assistant, “came to me and said, ‘Joel, your check bounced.’ I had to write her another one,” he recalled.
In all, dozens of New Breed employees contributed more than $85,000 to Giuliani’s campaign during the primary, including a $16,000 in excess contributions that the campaign returned after Giuliani dropped his bid because multiple employees gave identical contributions that were twice the legal limit. The only other GOP presidential contender to receive donations from New Breed employees during that year’s primary was Rep. Ron Paul of Texas, campaign finance records show. Together, two employees gave him about $550.
After Giuliani’s campaign faltered, DeJoy pivoted and put his energy into backing the 2008 McCain-Palin ticket, organizing and hosting multiple fundraisers over the next year. Again, New Breed employees followed. Along with DeJoy, they contributed more than $180,000, FEC records show. Four years later, an additional $193,000 flowed from DeJoy and other New Breed employees to the 2012 presidential campaign of Mitt Romney, now a U.S. senator from Utah. Before the 2012 election, more than $170,000 in contributions from DeJoy and New Breed employees would also go to help lift McCrory to the North Carolina governor’s mansion, state campaign finance records show.
The following month, McCrory named Wos, DeJoy’s wife and a retired physician, as his choice for state health secretary. In an interview, McCrory said Wos’s appointment had no connection to campaign contributions he received. “She was the most qualified person and I had to beg her to take the job,” he said. Told of The Post’s findings, McCrory said: “I’m not aware of any of these claims.” During her tenure, Wos drew scrutiny from Democrats after awarding a $310,000 state contract to Hauck, the New Breed employee who colleagues said had urged them to support DeJoy’s fundraising efforts.
At the time, Wos defended her pick, saying Hauck worked on a major restructuring of the department’s bureaucracy. Hauck said he took a pay cut by going on leave from New Breed to work for Wos for 11 months. “I looked at it as serving,” he said in an interview. By 2013, Warburg Pincus, a New York-based private-equity firm that had acquired a controlling stake in New Breed eight years earlier, had begun agitating for the company to go public or find another way to return value to its investors, according to three former New Breed employees with knowledge of the company’s finances. News articles in subsequent months quoted people familiar with the company saying Warburg was exploring a sale.
DeJoy tested the market for an initial public offering, filing a confidential draft prospectus with the Securities and Exchange Commission, according to correspondence detailing concerns about the offering flagged by the SEC, which remain archived on the agency’s website. As the agency began scrutinizing the company’s finances, the SEC appeared to question a lack of information about New Breed executive bonuses and how the company decided they had met their goals for the payments in the previous year. “Please disclose the target and how the target was met or not met or advise,” the SEC’s accounting branch chief wrote in a June 2013 letter to DeJoy. It is unclear whether or how the company responded.
Ultimately, New Breed did not go public. Instead, Warburg Pincus sold it to XPO Logistics the following year for $615 million, according to company announcements and SEC records. A spokeswoman for Warburg Pincus declined to comment.
The month the deal closed, New Breed employees made a slew of political donations in a two-day period — more than $407,000. Almost three-quarters of that went to support Tillis’s Senate bid. Clarke, Hauck and DeJoy were among 10 New Breed employees who led the giving. On Sept. 29, each gave identical donations of $12,600 to the Thom Tillis Victory Committee, campaign finance data shows. The next day, the same 10 employees each gave $10,000 to the North Carolina Republican Party. Since then, five of those individuals have significantly cut back their political contributions, and one has not given again at all, FEC filings show.
Young, who retired that fall, said he sent a note to DeJoy this summer congratulating him upon being named postmaster general. DeJoy may have the skills needed to improve the agency, Young said. But the fundraising that permeated New Breed will remain a mark on his legacy there, he said, adding: “He had an agenda, and would take advantage of people.” DeJoy never replied to his note, Young said. One of the last things he heard from anyone at New Breed came about a year after he left. Hauck, who by then was working with DeJoy at XPO, called and asked Young to donate to Tillis and other Republicans. “I said, ‘No, thank you.’ ”
[Jacob Bogage, Alice Crites, Dan Zak and Michelle Ye Hee Lee contributed to this report.]
07 Sep 2020, 20:58