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Mnuchin's role in postmaster's appointment becomes target

The treasury secretary held a series of one-on-one meetings with members of the Postal Service Board of Governors before Louis DeJoy's appointment.
Image: Steven Mnuchin
Treasury Secretary Steven Mnuchin leaves after testifying before the House Small Business Committee at the Capitol on July 17.Kevin Dietsch / Reuters file

WASHINGTON — In the weeks before Republican donor Louis DeJoy was installed as postmaster general, Treasury Secretary Steven Mnuchin held a series of one-on-one meetings with members of the Postal Service Board of Governors, multiple people familiar with the encounters told NBC News.

Those people said Mnuchin met with Republican board members, as well as with Robert Duncan, the board's chairman, who once chaired the Republican National Committee.

All six members of the current Postal Service board were appointed by President Donald Trump, although two members, Donald Moak and Ron Bloom, were recommended for appointment by Democrats.

NBC News attempted to reach the three Republican board members who were in their posts during DeJoy's interview process to ask about the nature of their meetings with Mnuchin, but did not get a response. Neither the Treasury Department nor the Postal Service would comment on the meetings or even confirm that they occurred.

Because Mnuchin's meetings were private one-on-one discussions, they were not subject to the Government in the Sunshine Act, which requires that federal agency meetings be disclosed to the public. Yet many on the board were aware of the get-togethers, one person said. Mnuchin was requesting briefings before a decision was made, which the person called "unusual." There was also discussion with Mnuchin about the "need to move quickly" on a selection, the person said.

Any White House or Treasury involvement with the Postal Service would be a breach of its charter as an independent, nonpolitical public entity, said Tim Stretton, a policy analyst for the nonpartisan Project on Government Oversight. The Postal Service operates on its own revenues separate from any federal appropriations process.

Trump has railed against the Postal Service while openly nursing grievances against Amazon founder Jeff Bezos, whose giant online retail operation relies on the Postal Service for many of its deliveries.

Mnuchin's undisclosed meetings with Postal Service board members add to a broader narrative about financial and political conflicts of interest by DeJoy and some newly appointed board members, as well as White House influence over the Postal Service.

Dave Williams, a former vice chair of the board who resigned in May, told members of the House Progressive Caucus on Thursday that Mnuchin had been actively engaged in the activities of the board.

Before they were confirmed, Republicans nominated to the board had to meet with Mnuchin and "kiss the ring," Williams said.

Once they were confirmed, Williams said, the board members would continue to hear from Mnuchin, who would convey "his approval and disappointment with their performance."

He added, "I've never seen anything like that."

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Williams told lawmakers that he stepped down "when it became clear to me that the administration was politicizing the Postal Service with the treasury secretary as the lead figure for the White House in that effort."

As for DeJoy, Williams said, "he didn't strike me as a serious candidate" when he sat for two interviews with the board. But, Williams said, "it was apparent he was going to be selected."

DeJoy has been embroiled in controversy in recent weeks after he initiated a series of cost-cutting and other operational measures at the Postal Service, such as ending overtime and decommissioning mail processing equipment.

Critics have warned that such measures could compromise the Postal Service's ability to handle a predicted sharp rise in mail-in ballots ahead of the Nov. 3 election. Trump has repeatedly decried the practice of mail-in voting, asserting without evidence that it leads to voter fraud.

Under fire from lawmakers and the public, DeJoy announced this week that he would refrain from making further operational changes until after the election.

Mnuchin, meanwhile, defended himself in response to a letter Senate Minority Leader Chuck Schumer, D-N.Y., sent Wednesday to Duncan, the board's chairman, seeking more information about how DeJoy was chosen. Mnuchin said he played no role in the recruitment of DeJoy, a major donor to Trump who is the first postmaster in 20 years with no experience at the agency.

Russell Reynolds, the search firm used to select DeJoy, is refusing to cooperate with his investigators, citing a nondisclosure agreement, Schumer said. He asked that the firm be released from the agreement and that the board provide a "fulsome explanation" of the role Trump and Mnuchin played in the search process.

Williams told lawmakers that DeJoy was recommended by a Republican board member, John Barger.

DeJoy is scheduled to testify before the Senate Homeland Security Committee on Friday and the House Oversight Committee on Monday, when Democrats are expected to demand more information about the changes he has instituted, including the removal of blue postal boxes and sorting machines at postal facilities across the country. Duncan will also testify Monday.

Mnuchin this year backed a Postal Service cost-cutting report he commissioned last year while also trying to block federal funds to shore up the agency, which was struggling financially even before the coronavirus pandemic. The report recommended changes, including reducing the workforce, increasing postage rates and cutting down on the types of packages being delivered.

Before DeJoy was appointed last spring, Congress approved a $10 billion loan for the Postal Service as part of the multi-trillion-dollar CARES Act to offset the agency's losses related to the coronavirus after Mnuchin blocked lawmakers' efforts to provide the money as a grant. Mnuchin did not release the money for months.

Mnuchin late last month finally reached a deal to release the loan, negotiating specific terms with the board even though it is supposed to operate independently of the executive branch. Among the terms: The Postal Service had to disclose its proprietary, negotiated service agreements with Amazon and other companies to the Treasury Department.

The Postal Service, amid the coronavirus, became "desperate" for a cash infusion, and "Treasury got the upper hand," said Stephen Crawford, who was a board nominee in the administration of President Barack Obama.