A Trump Pick To Oversee The Postal Service Has Extensive Ties To A USPS Contractor

The Republican takeover of the independent agency is giving the private shipping industry a seat at the table.

One of President Donald Trump’s newest appointees to the board overseeing the U.S. Postal Service has extensive business ties to a global investment firm that rents giant warehouses to the USPS and to most of its top competitors.

The appointee, William Zollars, joined the USPS Board of Governors in June after he was confirmed by the Senate, while still sitting on the board of the logistics giant Prologis. Prologis financial documents dated this spring show that Zollars has been compensated with thousands of shares of stock worth a total of more than $1 million, and that he has options to purchase thousands more shares in the coming years.

It is a potential conflict of interest that raises alarms about the ultimate goals of those overseeing the disastrous overhaul of the USPS.

The USPS is supposed to operate free from any political interference. Under Trump, however, Treasury Secretary Steve Mnuchin engineered a Republican takeover of the Board of Governors and personally pushed it to select Louis DeJoy, a GOP megadonor with no agency experience, as postmaster general. (Mnuchin and the agency have denied reports of the extent of his involvement.)

The board vetted and selected DeJoy and has broad oversight of the USPS’ spending decisions. Zollars is the president’s latest Republican appointee.

The Trump administration's takeover of the U.S. Postal Service has led to increasing delays as record numbers of voters are e
The Trump administration's takeover of the U.S. Postal Service has led to increasing delays as record numbers of voters are expected to mail in their ballots.

DeJoy slashed overtime and delivery trips for postal carriers, leading to cascading delays in service all over the country. Trump has all but endorsed the hobbling of the post office in order to sabotage mail-in voting in the coming presidential election. But some critics see another motive: a plan to justify privatizing the post office by reducing its reliability.

Prologis is one of the world’s largest owners of industrial real estate and has been snapping up warehouses amid a nationwide surge of e-commerce. Prologis rents space to the USPS during its peak holiday seasons. As of last year, some of its top customers for warehouse space included the USPS’s biggest competitors: Amazon, FedEx and UPS.

A post office spokesperson did not respond when asked if Zollars had retained his investments. But a ProLogis spokeswoman said his compensation had not changed as a result of his appointment to the USPS board of governors. She also said Zollars’ role on the USPS board does not intersect with his interests as a ProLogis board member and that all its contracts with the USPS go through the government procurement process.

It’s not illegal for members of the USPS Board of Governors to have financial relationships with companies that compete or do business with the agency. But they’re required to recuse themselves from topics that raise a potential conflict of interest, and the agency does not readily make those instances public.

A loophole protects members of the USPS Board of Governors, as part-time federal employees, from having to disclose their financial holdings to the public, which means the full extent of Zollars’ conflicts may be hidden.

“Even if you’re allowed to keep them, that doesn’t mean it’s a good idea,” said Walter Shaub, the former director of the Office of Government Ethics. “It’s a very bad idea to have assets that intersect with the work of the postal Board of Governors, partly because the optics are terrible, partly because it’s to the disadvantage of the country to not have the board fully operative because of recusals.”

For someone on the Board of Governors to have a private sector background is not in itself a bad thing, Shaub said.

“I’m not in favor of excluding people from government service for their mere expertise. I do still think it’s legitimate to question the general wisdom of someone serving on the board while having some common-sense conflicts of interest if not legal conflicts of interest,” he said. “Things look bad when you have assets that intersect with the work of the government agency you serve.”

The public has a right to know if members of the Postal Board of Governors have financial conflicts of interest, and if so, whether those conflicts might be affecting their actions. Sen. Elizabeth Warren, in a letter demanding more disclosure from the USPS Board of Governors

In his June confirmation hearing, Zollars admitted to the Senate Homeland Security Committee that his understanding of the agency was limited: “Although I do not have an in-depth knowledge of the Postal Service, I am anxious to learn as much as possible.”

However, he is a longtime figure in the shipping and logistics industry. Before joining the Prologis board, Zollars was an executive at multiple freight shipping companies including YRC Worldwide.

The U.S. Justice Department is currently suing YRC, claiming it overbilled the Department of Defense for several years while Zollars was CEO. (The company has denied any wrongdoing and noted that the Pentagon has maintained its contract during the lawsuit.)

The company was on the financial brink until late June, when the U.S. Treasury Department announced it would extend YRC a $700 million loan from its coronavirus relief fund in exchange for a stake of nearly 30% in the company. It is unclear whether Zollars retains any financial interests in YRC, and a USPS spokesperson did not respond to a request for comment. A spokesman for YRC Worldwide said Zollars “has not served as an employee or advisor to the company since his departure.”

Other new USPS figures also have potential conflicts of interest. DeJoy holds a multimillion-dollar stake in XPO Logistics, a company that contracts with the USPS and with some of the agency’s direct competitors, a CNN investigation found. Previously, DeJoy ran New Breed Logistics, which XPO acquired in 2014; DeJoy then ran XPO’s supply chain unit. He claims he is complying with all federal ethics laws.

On Monday, Sen. Elizabeth Warren demanded the board’s members release their personal finances in full, writing: “The public has a right to know if members of the Postal Board of Governors have financial conflicts of interest, and if so, whether those conflicts might be affecting their actions — or if they might account for the failure to act.”

CORRECTION: A previous version of this story misidentified DeJoy as having led XPO Logistics for many years.