Mnuchin paved way for postal service shake-up

By Kenneth P. Vogel, Jessica Silver-Greenberg, Alan Rappeport and Hailey Fuchs New York Times ,August 22, 2020,

WASHINGTON — In early February, Treasury Secretary Steven Mnuchin invited two Republican members of the Postal Service’s board of governors to his office to update him on a matter in which he had taken a particular interest — the search for a new postmaster general.

Mnuchin had made clear before the meeting that he wanted the governors to find someone who would push through the kind of cost-cutting and price increases that President Trump had publicly called for and that Treasury had recommended in a December 2018 report as a way to stem years of multibillion-dollar losses.

It was an unusual meeting at an unusual moment.

Since 1970, the Postal Service had been an independent agency, walled off from political influence. The postmaster general is not appointed by the president and is not a cabinet member. Instead, the postal chief is picked by a board of governors, with seats reserved for members of both parties, who are nominated by the president and confirmed by the Senate for seven-year terms.

Now, not only was the Trump administration, through Mnuchin, involving itself in the process for selecting the next postmaster general, but the two Democratic governors who were then serving on the board were not invited to the Treasury meeting. Since the meeting did not include a quorum of board members, it was not subject to sunshine laws that apply to official board meetings and there is no formal Postal Service record or minutes of what was discussed.

Nearly six months later, that meeting, along with other interactions between Mnuchin and the postal board, has taken on heightened significance as the Trump administration confronts allegations it sought to politicize the Postal Service and hinder its ability to handle a surge in mail-in ballots in November’s election. In interviews, documents and congressional testimony, Mnuchin emerges as a key player in selecting the board members who hired the Trump megadonor now leading the Postal Service and in pushing the agenda that he has pursued.

Trump’s animus toward the agency dates to at least 2013, but his criticism of its finances escalated once he took office and found new focus in late 2017, when he first bashed it for essentially subsidizing Amazon, another target of his ire. Amazon’s founder and chief executive, Jeff Bezos, owns The Washington Post, whose coverage has often angered Trump.

“This Post Office scam must stop. Amazon must pay real costs (and taxes) now!” the president wrote on Twitter on March 31, 2018, one of several such attacks over the years.

Twelve days later, he issued an executive order putting Mnuchin in charge of a postal reform task force. But it was not until earlier this year that the administration found a way to enforce its postal agenda — one that has now collided with the pandemic and the approaching election.

A few weeks after the February meeting with Mnuchin, one of the attendees, Robert Duncan, the chairman of the board of governors, who was appointed by Trump in 2017, threw a new name for postmaster general into the mix: Louis DeJoy.

DeJoy, a longtime logistics executive, was known for his hard-charging leadership style and his ability to convert disorganization into efficiency, as well his generous donations to the Republican Party, including to Trump. In October 2017, DeJoy had hosted a fund-raiser for the president’s reelection campaign at his North Carolina home.

Trump’s animus toward the agency dates to at least 2013, but his criticism of its finances escalated once he took office and found new focus in late 2017, when he first bashed it for essentially subsidizing Amazon, another target of his ire. Amazon’s founder and chief executive, Jeff Bezos, owns The Washington Post, whose coverage has often angered Trump.

“This Post Office scam must stop. Amazon must pay real costs (and taxes) now!” the president wrote on Twitter on March 31, 2018, one of several such attacks over the years.

Twelve days later, he issued an executive order putting Mnuchin in charge of a postal reform task force. But it was not until earlier this year that the administration found a way to enforce its postal agenda — one that has now collided with the pandemic and the approaching election.

A few weeks after the February meeting with Mnuchin, one of the attendees, Robert Duncan, the chairman of the board of governors, who was appointed by Trump in 2017, threw a new name for postmaster general into the mix: Louis DeJoy.

DeJoy, a longtime logistics executive, was known for his hard-charging leadership style and his ability to convert disorganization into efficiency, as well his generous donations to the Republican Party, including to Trump. In October 2017, DeJoy had hosted a fund-raiser for the president’s reelection campaign at his North Carolina home.

The measures matched up with recommendations in the task force report, which blamed the Postal Service for losing billions because of waste, inefficiency, and a failure to respond to declining mail volumes.

But the rapid-fire moves just months before the November election concerned Postal Service insiders, who said that, since at least the Obama administration, the agency had generally sought to avoid significant changes within two or three months of a general election.

Soon, mail was piling up at post offices, veterans were not receiving their medications, retirees were missing their Social Security checks, and questions began surfacing about the ability of the Postal Service to handle what is expected to be a record number of mail-in ballots this November because of the pandemic.

Amid an outcry from lawmakers, civil rights groups, and state officials, DeJoy suspended many of the changes on Tuesday, including some that had been underway before he took the helm of the Postal Service. Yet he made clear during a Senate hearing on Friday that he planned to move ahead with “dramatic” measures after the election, including raising prices and limiting overtime.

Postal Service employees and union officials say significant damage has already been done. Hundreds of mail-sorting machines have been removed, and the day-to-day changes have caused confusion and delays among drivers, carriers, and other workers.

In his Senate testimony on Friday, DeJoy chalked that up to growing pains as the organization tries to get leaner. “We all feel, you know, bad” he told lawmakers upset about mail delays affecting their constituents.

After the task force issued its report, Mnuchin sought to ensure that the president nominated postal governors who would enact Treasury’s recommendations and would pick a like-minded postmaster general to carry them out. Mnuchin referred prospective candidates to the White House, according to a Treasury spokeswoman, and then regularly asked his staff for updates, a former Treasury official involved in the process said.

S. David Fineman, a former member and chairman of the Postal Service’s board, called Mnuchin’s close involvement in the affairs of the Postal Service “absolutely unprecedented.”

During his tenure in the Clinton and George W. Bush administrations, he said the board had minimal interaction with the administrations, and “certainly no communication regarding the hiring of the postmaster general.”

DeJoy and Duncan are scheduled to testify on Monday before the Democratic-controlled House Oversight and Reform Committee, whose members have signaled interest in DeJoy’s hiring, the changes he enacted, and Mnuchin’s involvement in the Postal Service.