Complaint seeks investigation of whether U.S. Postmaster DeJoy violated NC election law
Common Cause NC called for a criminal investigation Wednesday into allegations that U.S. Postmaster General Louis DeJoy violated state election law by urging employees to make political contributions that he would then cover with bonuses.
The Washington Post first reported the allegations on Sunday, citing five former employees who said DeJoy or his top aides at New Breed Logistics pressured them to make the contributions, and two others who said they were aware of the bonuses to reimburse employees. All but one of the former employees declined to be identified in the Post’s story.
The watchdog group’s complaint against DeJoy, a top Republican fundraiser from Greensboro, pointed to state laws against giving in the name of another and exceeding campaign donation limits. Common Cause NC also said DeJoy may have violated state law prohibiting corporations from donating to campaigns by using company funds to reimburse employees who made contributions.
The Post reported that New Breed employees gave more than $1 million between 2000 and 2014 to state and federal Republican candidates. The campaigns of Pat McCrory, who won one term as governor, and Thom Tillis, who won a U.S. Senate seat in 2014, were among the biggest beneficiaries. That 14-year period is outside a five-year statute of limitations for federal campaign finance crimes, but the state has no such limitation.
Common Cause filed its complaint with the State Board of Elections, which investigates allegations of campaign finance violations. Common Cause also wrote a letter to North Carolina Attorney General Josh Stein asking his office to investigate.
Stein, a Democrat, said on Twitter on Sunday that “any credible allegations of such actions merit investigation by the appropriate state and federal authorities.” But he said any further comment would be “inappropriate.”
Review of donations in Wake County
Wake County District Attorney Lorrin Freeman told The News & Observer on Wednesday that her office is “undergoing a review of state campaign financial reports where we may find such a pattern” of donations as it relates to state elected officials. No pattern has been found so far, she said.
“There is no official criminal investigation. We are reviewing the matter as it would pertain to state elected officials,” Freeman said in an interview.
Reimbursing employees for political contributions — known as straw donors — is against both federal and North Carolina law. It is a Class I felony in North Carolina to “intentionally violate” the law on campaign contributions if “the unlawful contributions total more than ten thousand dollars ($10,000).”
Freeman said she cannot recall having charged anyone under that law in her nearly six years as Wake County DA. Her office would not have jurisdiction over federal elections, she said.
“Part of what we are doing is going back and reviewing those campaign finance filings. At this point, we are not seeing that (pattern),” Freeman said. “We have just started our review.”
The federal prohibition is clearly spelled out in a U.S. Justice Department document on election offenses. There are limits on how much an individual is allowed to donate to a campaign.
“A common type of conduit scheme involves a corporate official who instructs the corporation’s employees to make contributions to a federal candidate, and then reimburses the employees from corporate funds generally through fictitious bonuses or pay raises,” the document states.
Common Cause NC Executive Director Bob Phillips said in a statement the allegations run counter to campaign finance laws “designed to protect the fundamental integrity of our elections and guard against undue influence by self-serving megadonors and special interests.”
“Voters deserve to know who is funding politicians’ campaigns,” Phillips said. “But straw donor ploys hide the true source of political donations and make it impossible for voters to make fully-informed choices. This troubling fundraising scheme allegedly perpetrated by Louis DeJoy has the appearance of bypassing North Carolina’s campaign finance limits in order to illicitly buy political access and curry favor with elected officials.”
The complaint
Common Cause NC’s complaint largely recounts the allegations made in the Post’s story, and includes it as an exhibit.
One former employee was identified in the Post’s story, David Young, DeJoy’s longtime director of human resources.
“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,” Young, who had access to payroll records at New Breed from the late 1990s to 2013 and is now retired, told the Post. “When we got our bonuses, let’s just say they were bigger, they exceeded expectations — and that covered the tax and everything else.”
The U.S. Postal Service’s Board of Governors selected DeJoy to lead the service in May. Dejoy, 63, is originally from Brooklyn. He took over his father’s small trucking company and turned it into a nationwide logistics business that he sold for $615 million in 2014, The Charlotte Observer reported in a recent profile.
The Post reported that DeJoy and New Breed employees contributed more than $170,000 to McCrory’s 2012 campaign.
An examination of federal campaign contributions by The News & Observer found that New Breed Logistics employees made donations on the same day to candidates, including Tillis’ successful 2014 campaign. The New York Times found similar patterns dating back to 2003 for many races, including presidential races.
“Neither Senator Tillis nor our campaign had knowledge of these findings,” Tillis campaign spokesman Andrew Romeo said in an email McClatchy, echoing what he told the Post.
Cal Cunningham, Tillis’ Democratic challenger in the 2020 U.S. Senate race, said Tillis should return the donations he received from employees at companies run by DeJoy.
Romeo said “even The Washington Post is calling out Democrats for slandering Senator Tillis with partisan attacks that have no basis in reality,” citing a tweet from a reporter at the Post.
“Make no mistake about it, there is going to be a witch hunt,” Tillis said during an appearance on a Raleigh radio show Wednesday morning. “It’ll come out of the House. I’m perfectly fine, like the President said, with doing an investigation. I think it’s the best way to clear Louis DeJoy’s name and then we can focus on the issue.”
House investigation
During a U.S. House Oversight Committee hearing about postal service changes, Rep. Jim Cooper, a Tennessee Democrat, questioned DeJoy about the practice “of bonusing or rewarding” top executives for contributing to the Trump campaign.
“Did you pay back several of your top executives for contributing to Trump’s campaign by bonusing or rewarding them?” Cooper asked.
“That’s an outrageous claim, sir, and I resent it,” DeJoy said.
Cooper continued. “So all your campaign contributions were legal?
“I’m fully aware of illegal contract campaign contributions,” DeJoy said. “And I resent the assertion. So what are you accusing me of?”
The chairwoman of the House committee announced Tuesday an investigation into DeJoy and called on the U.S. Postal Service to suspend DeJoy.
“If these allegations are true, Mr. DeJoy could face criminal exposure — not only for his actions in North Carolina, but also for lying to our committee under oath,” said Carolyn Maloney, a New York Democrat, in a statement.
Rep. Alma Adams, a Charlotte Democrat, said on Twitter that “Dejoy should resign or be removed.” in response to the allegations.
DeJoy was head of fundraising for the Republican National Convention in Charlotte before the convention was moved amid the coronavirus pandemic. He has donated more than $1 million to President Trump, who attended a fundraiser at DeJoy’s Greensboro mansion on his first visit to North Carolina as president in 2016, and more than $1 million to the Republican Party.
DeJoy is married to Aldona Wos, the current nominee to be U.S. ambassador to Canada. Wos, herself a prolific fundraiser and donor, was Secretary of Health and Human Services in McCrory’s administration.
This story was originally published September 9, 2020 at 1:38 PM.