The USPS chief struck an incredible tone when impressed by Democrats, who were equally frustrated by his testimony. The showdown highlighted how difficult it is for lawmakers, and the public, to take a full look at the personal finances of DeJoy, a multi-million dollar mega-donor. This is partly because of the complexity of his possessions, but also because federal forms of disclosure are not designed to handle the level of wealth of someone like DeJoy. And USPS did not want to fill in the gaps.
Most government employees have almost no ability from DeJoy, the rare postmaster general, to get the job without ever having worked for the USPS. They are also unlikely to engage in the sophisticated financial maneuvers that DeJoy used to close his holdings in Amazon. The trading options he created are complicated and nuanced, and some of those details are not easily understood from how they are named on the forms.
There is also the issue that DeJoy’s forms are based on self-reported information, and not subject to review, or even automatic review by the Federal Office of Government Ethics. Instead, they were approved by the USPS Ethics Bureau.
Under oath this week, DeJoy said he has fully complied with all laws and regulations of ethics.
Tough interviews in Congress
DeJoy’s financial disclosure forms show he sold Amazon shares on June 24, nine days after taking on the role of postmaster general. On the same day, DeJoy also bought call options back on its Amazon share. A call option is a financial contract in which an investor buys the right, but not the obligation, to buy a stock or other asset for a pre-defined price before a defined expiration date. If the seller of a call option already owns the underlying stock or asset, the call option is considered “covered.”
When Representative Jackie Speier, a California Democrat, questioned DeJoy about the two transactions, DeJoy said he “did not buy options,” claiming he “bought covered calls at a loss.”
“That’s what I did to get completely out of the stock, I had to relax covered calls,” said a visibly frustrated DeJoy, before adding, “I think you need to get an understanding of what a covered call is before you accuse me. of incapacity. “
Nine days after becoming postmaster general, DeJoy was on his way to a meeting related to a USPS contract with Amazon, he told lawmakers. DeJoy said he was informed by USPS ethics officials that he had to sell his Amazon assets or refuse to review some of the contracts.
DeJoy then called his broker and told him to sell his property in Amazon, he testified.
But to completely rid himself of those assets, DeJoy said he had to sell his Amazon shares as well as repurchase the call options he had previously sold to someone else, involving his Amazon shares. . This is what DeJoy described as a “covered call.”
Later in the congressional hearing, Rep. Katie Porter returns to the subject. The California Democrat asked DeJoy if he, at the time, “had any financial interests, or options such as shares, talks, bought or sold,” adding, “Do you have a financial interest in Amazon?”
“I do not,” DeJoy replied.
Clunky financial disclosures
This is the first time DeJoy has publicly said he had dropped his financial stake in Amazon. Earlier, USPS spokesmen said DeJoy had complied with all federal ethical regulations, but they did not indicate that DeJoy had sold all of its investments in Amazon.
“He’s known for over a month now about the public’s concerns about the Amazon submissions in his publications, and he’s never chosen to give the public an explanation so far,” said Walter Shaub, the former director of the Office of Government Ethics, which resigned in 2017.
DeJoy holds equity in XPO Logistics, a large transportation and logistics company that does business with USPS and has contracts with other U.S. government agencies.
According to federal data, when he became postmaster general, DeJoy still had a large stake in XPO Logistics of at least $ 30 million. Over the summer, federal ethics officials approved his decision to keep these assets. But Democratic lawmakers and outside experts with decades of experience in government have raised red flags.
“We have no explanation for why he keeps millions allowed in stock for postal contractors,” Schaub said. “That’s deeply troubling, and I think Americans deserve an answer.”
At the House of Commons session this week, DeJoy said that his XPO share “was previously checked with the ethics department” at USPS and that he “received specific types of guidelines that I had to adhere to.”
“It’s a very, very small part of the Postdienst company, I have nothing to do with it,” he said.
CNN’s Michael Warren contributed to this report.
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