DeJoy may have violated conflict of interest law by profiting off USPS Covid tests: watchdog group

Justice Department urged to investigate after watchdog group found DeJoy owns stock in Abbott Laboratories

By Jake Johnson

Published April 1, 2022 10:57AM (EDT)

United States Postmaster General Louis Dejoy looks on during a House Committee on Oversight and Reform hearing. (Graeme Jennings-Pool/Getty Images)
United States Postmaster General Louis Dejoy looks on during a House Committee on Oversight and Reform hearing. (Graeme Jennings-Pool/Getty Images)

This article originally appeared at Common Dreams. It is licensed under a Creative Commons Attribution-Share Alike 3.0 License. Feel free to republish and share widely.

A watchdog investigation published Thursday revealed that Postmaster General Louis DeJoy owns stock in the manufacturer of rapid coronavirus tests that the U.S. Postal Service has been delivering to households as part of the Biden administration's pandemic response.

The Project on Government Oversight (POGO) discovered DeJoy's Abbott Laboratories holding in an examination of the scandal-plagued postmaster general's financial filings, which the group notes "show no evidence of him having fully divested that stock," leaving him positioned to profit off Abbott's partnership with the White House.

Abbott, an Illinois-based company that makes the popular BinaxNOW at-home coronavirus test, was one of the companies that the Biden White House tapped to take part in an initiative that has allowed people across the U.S. to order free coronavirus test kits through a government website.

The Postal Service said earlier this month that it has delivered more than 270 million Covid-19 tests to U.S. households thus far.

POGO argued that by failing to relinquish his Abbott stock while participating in the test-delivery project, "DeJoy may have violated a federal conflict-of-interest law."

"DeJoy not only owned Abbott Laboratories stock, he appears to have traded the stock after the White House announced on January 7 that the Covid-19 test kits the administration had purchased would be 'sent out through the mail,'" POGO noted.

According to Washington Post reporting from January, DeJoy—a former logistics executive—was "intensely involved" in planning for the testing effort.

POGO went on to detail DeJoy's suspiciously timed trades:

On January 11, two days before the federal government formally announced that it had awarded Abbott Laboratories a $306 million contract for the test kits, DeJoy engaged in two transactions involving Abbott. In a disclosure he filed on February 2, DeJoy described one of the transactions, which he valued at $1,001-$15,000, as an "opened written call option position." He described the second transaction, which he valued at $15,001-$50,000, as a "closed written call option position"...

On March 24, the federal government awarded a contract modification to Abbott Laboratories worth over $1 billion for test kits.

Walter Shaub, a senior ethics fellow at POGO and one of the new report's authors, wrote on Twitter that "criminal conflict of interest law prohibits participation in particular matters in which a federal official has a financial interest."

Shaub, who previously served as head of the U.S. Office of Government Ethics, called on the Biden Justice Department to launch an investigation into DeJoy's stock transactions.

"Calling DOJ!" he tweeted.

POGO pointed out in its new report that "a federal conflict-of-interest law bars officials like the postmaster general from participating personally and substantially in certain government matters affecting their own financial interests."

"The law doesn't cover every government undertaking, but it does cover programs that, like the free Covid-19 test project, are focused on the interests of individual companies or a specific industry," the group observed. "Under the conflict-of-interest law, it doesn't matter if another government official, or even another federal agency, negotiated the deal with the test manufacturers. It also doesn't matter if the official ultimately never makes a profit from the conflict of interest."

DeJoy, a Trump megadonor who took charge of the USPS in June 2020 and almost immediately moved to slow mail delivery, is already reportedly under FBI investigation for potential violations of campaign finance laws during his time as CEO of New Breed Logistics.

Democratic members of Congress have repeatedly called for DeJoy's removal as postmaster general, citing his numerous alleged conflicts of interest and ongoing push to degrade the Postal Service's delivery performance.

But DeJoy can only be fired by the USPS Board of Governors, where former President Donald Trump's nominees currently have a majority. Far from moving to oust DeJoy, top board members have praised the postmaster general throughout his tenure.

"Will this obvious conflict of interest finally prompt the postal board of governors to take a hard look at DeJoy's misconduct," Shaub asked Thursday, "or will they ignore this like they ignored his partisan efforts to slow the mail before the election?"


Jake Johnson

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