September 6, 2020/Media

NEW: Thom Tillis Implicated in Apparent Illegal “Straw Donor” Scheme from USPS Chief DeJoy

Senator Tillis was “one of the biggest beneficiaries” of an apparent illegal straw donor scheme orchestrated by USPS chief Louis DeJoy, according to a bombshell new investigation from the Washington Post. Tillis “collected nearly $300,000” from employees at DeJoy’s company New Breed, who were encouraged to donate to Republican candidates and then repaid by DeJoy later, his “longtime director of human resources” confirmed on the record.

In one particular instance, after DeJoy sold his company for $615 million, New Breed employees donated more than $407,000 to Republican candidates, and “almost three-quarters of that went to support Tillis’s Senate bid.” Ten employees led the giving, including three who gave “identical donations of $12,600 to the Thom Tillis Victory Committee.” Those same 10 employees each gave $10,000 to the North Carolina Republican Party the next day. “Since then, five of those individuals have significantly cut back their political contributions, and one has not given again at all, FEC filings show.”

Senator Tillis has repeatedly defended DeJoy, saying he’s focused on “making the post office better,” and has failed to hold him accountable for his reckless changes, which has impacted veterans and North Carolina rural communities.

Read the full investigative piece below.

Washington Post: Louis DeJoy’s rise as GOP fundraiser was powered by contributions from company workers who were later reimbursed, former employees say
By Aaron C. Davis, Amy Gardner and Jon Swaine
September 6, 2020

Key Points:

  • 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.”
  • 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.”
  • 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.
  • 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.”
  • 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.
  • 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.
  • 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.’ ”