SCOOP: Trump Donor’s Firm Got Big Postal Service Payout
A trucking magnate poured $250,000 into a pro-Trump super PAC. His company saw a windfall from USPS contracts. Now, a Democratic congressman is calling for an investigation.
|Matthew Cunningham-Cook||Aug 20, 2020|| 32||3|
This report was written by Matthew Cunningham-Cook.
Businesses controlled by a major financial supporter of President Donald Trump have seen a huge growth in payouts from the United States Postal Service during the Trump administration, a TMI review has found.
In 2018, an Iowa limited liability company owned by trucking magnate Wayne Hoovestol donated $250,000 to America First Action, a pro-Trump super PAC sanctioned by the White House. Later that year, the same company -- DRT, LLC -- gave $10,000 to the Senate Leadership Fund, a super PAC that has been chaired by Trump’s USPS board chair, Mike Duncan, shortly after Duncan joined the agency’s board.
Hoovestol’s companies, which include Eagle Express Lines, saw $453 million in revenue from the Postal Service in fiscal year 2019, up from $317 million in the 2016 fiscal year, according to Bloomberg Government contract data analyzed by TMI.
Contracting decisions at the USPS are controlled by the Postmaster General, who is appointed and supervised by the USPS board of governors. The board’s members are appointed by the president and confirmed by the Senate.
Hoovestol did not respond to a request for comment.
California Democratic Rep. Ro Khanna, who sits on the House Oversight Committee which has jurisdiction over the Postal Service, called for an investigation by the USPS Inspector General.
“The United States Postal Service is supposed to be protected from pay-to-play practices -- it is not supposed to be run by Donald Trump’s political cronies, and it is not supposed to be a piggy bank for Trump’s corporate donors to loot,” Khanna said. “The inspector general must immediately launch an investigation into this situation to make sure this contractor and others aren’t being given contracts as a reward for funneling money to Trump’s political machine. Americans deserve a postal service that isn’t turned into a weapon for Trump and the GOP’s political agenda.”
In recent weeks, the Trump administration has faced allegations that it is deliberately sabotaging the postal service to help Trump win re-election during a global pandemic, when it’s critical that people can vote by mail from their homes. TMI reported last week on Duncan’s roles with Republican super PACs and the Kentucky Republican Party. Duncan is scheduled to testify before the House next week. Postmaster General Louis DeJoy -- a major Republican fundraiser who joined USPS in May -- will testify before the Senate on Friday and the House next week as well.
Hoovestol’s companies have attracted controversy of their own. In 2019, his main company for contracting with the USPS, Eagle Express, was sued by family members of five children and two adults who died in a fiery trucking crash caused in part by an Eagle Express semi whose driver had a history of traffic violations. (Hoovestol blamed the crash on “a sudden medical emergency.”)
Unlike many other USPS trucking contractors, Eagle Express is non-union, even though a group of drivers voted to organize in June. The union the drivers voted to organize with, Teamsters Local 727, has accused Eagle Express of obstructing workers’ right to organize.
Hoovestol and his wife have been large donors to white nationalist Rep. Steve King, R-Iowa, giving him $25,700 over the years, according to data collected by OpenSecrets. (King lost his re-election bid in the Republican primary in June.)
While campaign finance laws prohibit federal contractors from making contributions in federal elections, the super PAC donations linked to Hoovestol circumvent those restrictions because they came from a separate LLC, not the companies that have federal contracts with USPS.
“This is all part of the game,” said Craig Holman, an ethics lobbyist at Public Citizen. “You throw money at the feet of those who have power over your futures and you try to buy their favor. And usually it works.”
Donald Cohen, the executive director of In The Public Interest, a nonprofit that researches privatization, said that the rise of outsourcing helps to undermine public trust in the Postal Service.
“Any money that is diverted to profit or return on investments or political giving, that is other than paying workers to do the job and legitimate management and administrative expenses, is money taken away from doing the service,” he said. “If the service quality goes down it’s irrelevant whether it’s privatized or not and people blame the Postal Service,” which ultimately boosts the longtime, right-wing goal of a wholesale privatization of the Postal Service.
“The highest priority for businesses is that their profits are maintained,” Cohen continued. “Those are their metrics, period. They cut corners. They're not looking at employee satisfaction. They have to cut corners. Cutting corners means busting unions, reducing wages, reducing and paying less attention to safety. If someone is hurt it's just the cost of doing business” said Cohen.
Eagle Express has additionally received nearly $1.6 million in COVID relief funds from the federal government, according to data collected by covidstimuluswatch.org.
Photo credit: Alex Wong / Getty Images
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