The Ode D'Joy - How the US Postal System is Being Dismantled From Within
What if anything will the post office be delivering the American people in 2025....?
If anyone is wondering about the structure and fate of the US Postal Service (USPS), here is a brief synopsis. The US Postal Service is controlled by a ‘Board of Governors’ who direct and control its expenditures, reviews its operations, policies, practices, expenditures and conducts long-range planning, approves officer compensation and sets policies on all postal matters.
The Board is made up of eleven members, which includes the Postmaster General and Deputy Postmaster General. Nine of the members, the “Governors,” are appointed by the President of the United States and confirmed by the Senate. Currently, only the Postal Service Board of Governors has the power to appoint or fire the Postmaster General, who may serve an ‘unlimited’ term. However, no person may serve more than two terms as ‘governor.’
Selection and Conflict of Interest Controversy
On May 6, 2020, the USPS Board of Governors, all selected by Trump and confirmed by the Senate, announced Louis DeJoy's appointment as Postmaster General in charge of the US Postal Service - despite concerns about his myriad conflicts of interest with private carriers, in addition to having no direct postal service experience.
Prior to his nomination and appointment, DeJoy, was a wealthy and ‘connected’ North Carolina businessman and CEO of a transportation ‘logistics’ trucking company that his father had started. According to reports, he made the company, ‘New Breed’ logistics very successful, allowing him to become a substantial donor to Trump and Republican elections - namely since 2016. It is no secret DeJoy and his wife Dr. Aldona Wos’ have been pushing the political donation envelopes among the D.C. well-connected. Having worked on George W. Bush’s campaign, she was nominated by Bush Jr., and appointed as US ambassador to the Republic of Estonia. More recently, Wos was nominated by Trump as ambassador to Canada in the previous Trump term, but ended up serving as vice-chairwoman of the President's Commission on White House Fellowships, reviewing candidates for White House fellowships.
Louis DeJoy previously worked in the private sector as CEO of New Breed logistics transportation company which was acquired by XPO Logistics in 2014. Thereafter he was named chief executive of XPO’s new contract logistics business, DeJoy continued leading the operations until 2018. Notably, XPO has continued its relationship with US Postal Service under DeJoy’s tenure as Postmaster General.
Golden Parachute
As the former owner and CEO New Breed logistics (freight and transportation company), it was reported in SEC filings, he received a price of $615 million upon the sale and acquisition by XPO Logistics. DeJoy used $30 million of the proceeds from the XPO merger, to purchase restricted stock from the company. At the time, New Breed had revenue of approximately $597 million and adjusted EBITDA (net profit before taxes, depreciation and amortization) of approximately $77 million for the trailing 12 months ended June 30, 2014.
Words of Transition to Post Office
DeJoy had famously stated when transitioning from the private sector to his public post as Postmaster General:
“Having worked closely with the Postal Service for many years, I have a great appreciation for this institution and the dedicated workers who faithfully execute its mission,” DeJoy also once said in a news release. “I look forward to working with the supporters of the Postal Service in Congress and the Administration to ensure the Postal Service remains an integral part of the United States government.”
So much for the Postal Service Remaining an Integral Part of the US Government…
Not long after DeJoy took the job as postmaster, the press published photos of discarded and dismantled postal sorting machines - which by its very nature would affect speed and efficiency - effectively slowing down the sorting and processing of mail. None of this makes sense, unless the one in charge has a competing interest - one that would cause them to hamper the workflow of the organization they have been charged to run.
By all accounts, these action appear to represent a systematic disassembling of the legacy of the US postal service - to deliver the mail through rain, snow and ice - for, and on behalf of the American people. There can be no doubt, having multiple investments in private carriers can be a real incentive to have to postal ‘system’ stymied, run less efficiently, and operate in the red.
On May 6, 2020, the Board of Governors announced the unanimous selection of DeJoy to serve as the 75th Postmaster General and Chief Executive Officer (CEO) of the Postal Service. On June 15, 2020, DeJoy was appointed as the Postmaster General. DeJoy was previously the Chairman and CEO of New Breed Logistics, Inc., which was a Postal Service contractor for more than 25 years and supplied the Postal Service with logistics (movement and transportation) support for multiple processing facilities. In 2014, New Breed merged with XPO Logistics, and DeJoy served as CEO of XPO Logistics' supply chain business in the Americas. DeJoy retired as the CEO from the company in December 2015 and joined the XPO Logistics board of directors, where he served until 2018.
Another Big Problem for the Postal Service: Allocation of Pension Dollars
In the publication, Government Executive, it exposes a long-continuing problem of the US Postal Service pensions tied to the purse-strings of the US Treasury, stating:
[I]t’s hard to understand why the U.S. Treasury has persistently and unfairly tapped the retirement funds of this essential workforce for over half a century.
That’s right, for some 52 years, a glaring misallocation of pension liabilities has persisted, resulting in about $90 billion in unjust expenses to USPS, harming postal employees and postage ratepayers.
This accounting problem came to light in 2010 during the Obama administration when the Postal Regulatory Commission released the results of an independent audit, often referred to as the “Segal Study.” The audit examined the Postal Service’s assets and liabilities within the Civil Service Retirement System and found that the methodology used by the Office of Personnel Management in their valuation of postal CSRS pensions did not meet the standard of “fair, equitable, or preferred [private sector] methodology.” It recommended immediate reforms.
Now, over a decade later, corrective action has yet to be taken, with three successive presidential administrations sidestepping the issue. While the Postal Service Reform Act of 2022 passed by Congress was a positive step forward, it was intentionally silent on the postal pension policies since Congress previously determined that executive administrative action could be taken to resolve the issue.
Why Biden didn’t directly apply a ‘fix’ here remains unclear - but he recently nominated members to the Board of Governors tasked with oversight and improvements long overdue the system.
To fix the unfair pension allocation
A Viable Solution to fix the unfair raid on the USPS pension fund would save the USPS billions of dollars. It appears that Congress has repeatedly granted the presidential administration “clear legal authority and guidance to fix the unfair pension allocation” It’s called the Segal reforms, and presidents have the power to take immediate and unilateral action, without any additional action by Congress. This is a viable solution…but is the will to do so, and the dollars to fix it…?
If adopted, the Segal reforms will pave the way for the USPS to save substantial funds while fairly and justly allocating pension costs between postal and other federal workers.
For the Record:
The US Constitution, gives Congress the power to establish post offices and post roads. It is also true that in 1970, under the Nixon administration, the Postal Reorganization Act was passed by Congress. This Act abolished a cabinet position once occupied by the US Post Office “Department.” In its stead, was created an independent agency ‘corporation’ authorized by the government and subject to political favor, appointments to run as they saw fit with some oversight by the board of governors. For more a historical perspective: https://thereader.mitpress.mit.edu/birth-of-usps-politics-of-postal-reform/
The United States Constitution's Postal Clause:
Article I, Section 8, Clause 7, gives Congress the power to establish post offices and post roads. This power includes the ability to:
Designate existing buildings and routes as post offices and post roads
Construct new postal facilities and roads
Regulate the mail
Designate certain materials as non-mailable
Pass laws that criminalize abuses of the postal system
The Postal Clause is also known as the Postal Power. The Postal Service's foundation is in the Constitution, and the Postal Act of 1792 established the foundation of the modern Postal Service.
As stated previously, in 1970 the Post Office Department was transformed into a government-owned corporation, called the United States Postal Service (USPS). In 2022, the Postal Service Reform Act - H.R. 3076, was passed by the House on February 8, 2022, passed by the Senate on March 8, and signed into law by President Biden on April 6.
This legislation provides needed financial and operational changes to the United States Postal Service. The goal, was to place USPS on the path toward financial stability, adding much-needed transparency to the Postal Service, enacting prospective Medicare integration for retirees, ensuring six-day delivery, and repealing the unfair pre-funding mandate.
The Future
As the pension allocation problem remains unresolved, and conflicts of interest by those in charge of the postal service still hold investments in private carriers competing ‘directly’ with the US Postal Service - the fate of the postal system is in serious jeopardy. If these issues remain unresolved - the viability of a government run US postal service is in dire peril, and positioned to be privatized - which ironically if that happens, it will mostly harm rural voters who voted for Trump.
Since this nation’s founding, the post office has been the lifeline for all Americans, rural and metropolitan, rich and poor - connecting everyone, while opening channels of communication across the globe. Brave civil servants have braved the winters and floods, encountered attack dogs, while just trying to do their job. Privatizing the post office would cause vast unemployment among these devoted servants, affecting their families, their healthcare, and their retirement. The financial stakes cannot be higher for the USPS, where private carriers are vying for a market share once the government run post office can no longer deliver.
And for those with conflicts of interest at the helm, while having stakes in the success of similar private carriers that abound, it is clear those that do are looking to turn profits, by making themselves invaluable - being the only logistical delivery game in town.
Notesasz:
https://apwu.org/postal-board-governors#:~:text=The%20Postal%20Service%20has%20a,General%20and%20Deputy%20Postmaster%20General.
https://www.usatoday.com/story/news/factcheck/2020/08/13/fact-check-postmaster-general-louis-dejoy-invested-competitors/5550480002/
https://www.uspsoig.gov/sites/default/files/reports/2023-01/ROI_on_PMG_Dejoy.pdf
https://abcnews.go.com/Politics/photos-show-mail-sorting-machines-parts-us-postal/story?id=72468917
https://golden.house.gov/media/press-releases/golden-introduces-bill-for-congressional-oversight-of-postmaster-general-blasts-proposed-rural-mail-delays#:~:text=Currently%2C%20only%20the%20Postal%20Service,be%20confirmed%20by%20the%20Senate.
https://www.cbc.ca/news/politics/aldona-wos-new-us-ambassador-canada-1.5460207
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