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tv   House Oversight Subcommittee Hearing on the U.S. Postal Service  CSPAN  September 17, 2020 5:42am-8:13am EDT

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instituted. this is two and a half hours. >> the committee will come to order. without objection, the chairman is authorized to declare a
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recess at any time. the chair asks that ms. debbie ms. scanlan,ultz, else -- mr. cooper, ms. debbie wasserman schultz, and representative mary gay scanlon, b waved onto the committee. without objection, it is so ordered. i now recognize myself for an opening statement, then i will record as the ranking member. i have agreed -- is the chairwoman on? chairwoman wish to have an opening statement? i will recognize her, with your
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after.ion, mr. hice, lawrence, i will recognize. if somebody else on your side wants to have additional. the postal service is the crown jewel of our federal government. it serves every household and business every day. 630,000 brief individuals who live in every congressional district. according to pew research, 91% of americans have a favorable view of the postal service. leaps and bounds above that of any other federal entity. during the coronavirus pandemic, service's value to this nation is greater than
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ever, serving as a linchpin to our nation's response to the pandemic. found 2020 harris poll that the postal service ranked as the most important company to americans during the pandemic because it is a constant in our lives. that --ings companies it outranks companies that manufacture ppe and sanitizers. the postal service will also play a critical, unprecedented expanded,he sense of in democracy, with voters casting ballots by mail. we know the postal service can handle the volume. the question is whether those at the helm are taking steps to hinder that capacity and slow it down in ways that benefit one
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candidate's reelection campaign. it is essential that postal service leadership demonstrate nonpartisanship, and not cronyism or favoritism. servicethe postal during this pandemic is apus -- is a responsibility to bestow upon only the most honorable of leaders. it is a job for those ready to listen to the millions of ,takeholders, mail recipients veterans, congress, and so many others, to connect the united states as benjamin franklin foresaw and service the thread that unites our society. unfortunately, that is not what is happening. instead, we have a board of governors that inserted a political ally of the president into the search process in the 11th hour.
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we have a crony at the helm of our nation's postal service, a man rife with conflicts of interest and violations of law even. we have a postmaster general who would benefit financially if the postal service sprints toward privatization. if mail-ind bail in ballots are delayed or undelivered. that would be unacceptable under any circumstance. however,astrophic, during a global pandemic on the precipice of one of the most consequential elections of our lifetimes. this hearing will provide the public with an update of what we know on the background and qualifications of the postmaster general selected by the board of governors. some nights they that was the -- some might say this is the
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homework that board should have done and failed to do. we will together the troubling past of mr. dejoy. we will examine his actions related to companion -- related to campaign donations when he was at the helm of new breed logistics. companies that would benefit if the usps pursued the president's plan for privatization. we will explain why those connections matter and why they should have rendered him ineligible for consideration. workejoy's first day of was june 15. today marks the start of his 15th week of federal service. his record is characterized by tumult, controversy, denying citizens in need of life-saving
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medicine and supplies. with thes are on time, mail often left bind. -- ourned at our left last hearing that mr. dejoy has known for weeks that his so-called operational changes that just so happened to coincide with the election slowed down the mail by 10%. for two weeks, he withheld from congress and the public the data and analysis that demonstrated how his leadership undermined the mission of the postal service to deliver the mail. days later, details on mr. dejoy 's lack of ethics have come to light. he reportedly forged his own brother's signature to take greater control of the company.
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used theedly illegally family's company as a political action committee, coercing the staff to donate to candidates and reimbursing the staff with bonuses and salaries. actions shoulds have been of great concern to the board of governors and could have been prosecuted for criminal activity. we are not done. over the weekend, the postmaster general sent every home in america a mailer saying that voters who wish to vote by mail should request a mail-in ballot, confusing voters in nine states that automatically send a mail-in ballot. this could have been avoided if he allowed the governors of the states, as requested, to
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proofread the balance before -- proofread the mailer before it was sent out. company mayceo, his have received overpayments for services rendered. by dossier released today one of our witnesses shows that mr. dejoy continues to hold investments, assets command other interests in entities. mixes hismr. dejoy political and friendships with his position as pmg. for those who believe the postal service should not be the arm of any campaign, mr. dejoy continues to conceal his secret coordination with trump campaign associates, about which he has already provided misleading information and testimony before
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the congress. the chairwoman and i have repeatedly asked the postmaster general and board of governors about justifying the operational changes, clarify what mr. dejoy morevestments are, transparency of operations, and ensure trust in the postal service. they have not given us the documents we requested and required. chairwoman maloney issued a subpoena compelling mr. dejoy to produce a wide range of documents including those previously requested in a list of contacts with trump campaign affiliates and individuals. today is the deadline for the board of governors to provide the committee documents and information to shed light on the way mr. dejoy was selected. while the board of governors may be "tickled pink" with mr. dejoy
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's performance, the american people are not. perhaps they need to be reminded that their job is to serve the any particular print -- particular president. i look forward to hearing from andexpert witnesses today continued discussion. i recognize the distinguished ranking member. notion thathe mere this hearing is a possible update isis a postal utter nonsense. just moments ago, the issues that will be discussed shows this hearing for what it is, an absolute farce. not a single one of the witnesses even work for the usps currently.
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is, in relation to the postal service update, because of better than expected revenue during this pandemic, the postal service has reported that it has enough money to be totally solvent through at least august of next year. 11 months from now. aere is no immediate need for $25 billion bailout. however, as gao reported in may and as we have all known for decades, the usps's current business model is not financially sustainable because of such things as declining mail volumes, increased compensation costs, and liabilities. bailout money cannot fix these type of problems. all it does is push the problems down the road a little bit
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further for us to deal with it later. we have 11 months to come together and work in a bar fight is -- work in a bipartisan fashion to bring real reforms to the postal service just like, mr. chairman, you did with my predecessor mark does. instead of having a serious discussion, we are using this valuable time to delve into conspiracy theories about the koch family and opine into mr. dejoy's interests. bring together a group of people like we have here today to speculate with no more facts or information than is printed in the washington post is absolutely a waste of time. this is in my opinion as close to a kangaroo court as i have ever seen.
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ofen the reckless apathy facts and truth, it is clear that this hearing is nothing more than an attempt at a political assassination. usps ethicshat the office cleared mr. dejoy to retain certain assets and to the best of anyone's knowledge here, he has complied. for his part, the postmaster general has confirmed in our full committee hearing that the oig is currently conducting an investigation. he said he welcomed the results of that report. the president himself said he is open to a campaign-finance investigation of the master general. he said that if it can be proven of evidence of wrongdoing come a should lose his job -- of
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wrongdoing, he should lose his job. -- democrats try to paint them as partners. they are willing to at least collect the facts and evidence before rushing to judgment, something that certainly this committee so far has not done. for example, when the entire house was forced to vote on a postal bailout bill before we even had a hearing. before we had the opportunity to question the postmaster general and analyze data on what was causing the slowdowns. or when democrats claim that the removal of collection boxes and sending mail to states about collection deadlines was somehow democracy, without
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admitting the fact that these are the same actions postmasters in the past have done. today, we are having a hearing two days before the postal service is supposed to start producing documents from the democrat subpoena. thestments, recusal's with ethics office. let me add this. in the documents that have already been received, there is evidence of the democrats' disingenuous narrative. the documents show, in black-and-white, evidence 'ountering two of the democrats favorite topics, postal boxes and mail sorting machines. more of these were removed just prior to the 2016 election than were removed this year.
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i don't recall any talk about it then. as a result, the hearing today will not be based on fact. it will be based on conjecture and supposition, in the hopes that one day we will resume genuine postal reform, i am inviting mr. mike plunkett from a national association of businesses and organizations that rely on the use of mail for communication and commerce. i look forward to hearing from him as well as our other witnesses. hopefully we will be able to move forward with genuine efforts for postal reform rather than these types of hearings which are nothing more than a kangaroo court to score potable points. i yield back. rep. connolly: what was characterized as character assassination was an in-depth
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investigation done by the washington post and independent media outlets confirmed the findings of the washington post investigation that members of new breed staff when mr. dejoy was ceo were pressured to make donations that could be construed as straw donations. rep. hice: i appreciate the chairman's remarks, but this hearing is supposed to be about postal updates, not potential investigations. rep. connolly: we appreciate the gentlemen's point, but leadership of the postal service is directly about issues related to the postal service. before i call on ms. lawrence and mr. keller, i recognize the chairwoman of the full committee.
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>> good morning. i would like to thank you, chairman connelly, for holding this important hearing and being such a strong partner in our investigation, to hold the postal service and its leadership accountable to the american people. i would like to welcome our witnesses. we look forward to learning from you and working with you to ensure that the public interest is protected. ever since the board of governors announced the selection of mr. joy as postmaster general, questions have been raised about the process for selecting him, and possible conflicts of interest, given his many financial interests in postal service contract awards. during our full committee hearing on august 24, 2020, multiple committee members
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questions mr. dejoy and board chairman duncan about his selection process and whether it was influenced by the fact that both mr. dejoy and mr. duncan thelongtime mega donors for republican party. when directly asked by congressman cooper whether mr. dejoy had ever paid back any of his executives for contributing to republican campaigns by providing bonuses or rewarding responded,ejoy "that's an outrageous claim, sir. and i resent it." less than two weeks later, a headline appeared in the washington post, which stated, "louis dejoy's rise as gop fundraiser was powered by
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contributions from company workers who were later reimbursed, former employees say." if true, these allegations are not only incredibly unethical, they are illegal. and, to compound these possible would have dejoy lied to congress as well. the united states postal service is one of our nation's most trusted institutions. the veryback to founding of our country. it is mentioned in our constitution. and it consistently receives the highest rating of federal agencies from the public. every day, and provides millions of people with access to critical mail, medication, and
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especially in this unique election, mail-in ballots. but how long can we expect the faith of the american people to last if the posts -- if the postal service is tainted by partisan leadership and alleged criminal activity? these are just a few of the reasons why i have introduced the nonpartisan postmaster general act, which will prevent postal service leadership from participating in any political activity, and will prevent anyone who has held a political position in the last four years from being hired as postmaster general or epi postmaster general. sensitiveitical, time legislation that the full committee will consider this
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week. connellythink chairman for holding this important hearing, and the witnesses for being here today. i look forward to hearing from my colleagues on both sides of the aisle. i yield back the balance of my time. rep. connolly: i think the chairwoman. i also think her for her leadership. after she was elected chairwoman, she and i had a conversation minutes after the election. the first thing she brought to my attention was postal reform, the need for comprehensive postal reform. obviously, that has been a priority you have set. and i really appreciate it. >> i look forward to working with you on it, my colleagues and others. rep. connolly: i will now call on congresswoman brenda lawrence for an opening statement. mr. keller, you will also be
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called on. then we will hear from our witnesses. thankawrence: i want to chairman connelly for holding this important hearing. prior to serving in congress, i spent almost 30 years with the united states postal service. during that time, i worked alongside some of the nation's most dedicated public servants. individuals that work long hours to ensure that the american people receive their mail in a timely manner. existence service's is a critical government service. it began in 1775. throughout history, whether it was world wars or global pandemics, the postal service rose to the challenge and continued to deliver mail across this country and throughout the
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world. during the civil war, the postal service did not cease their operations. outbreak, 1918 flu the same as a pandemic, covid-19 that we are going through, the postal service never stopped continuing to move the mail even when people were dying within the service. to this day, the postal service's ability to deliver the mail to service members serving at home and even abroad in a war zone provides a vital link to their families and to their friends back home. never before have i seen a postmaster general undermined the postal service's ability to do its work by undertaking the kind of drastic and ill formed operation changes that our current postmaster general has
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instituted in recent months. this veryng before committee last month, the postmaster general confessed that he did not know the postal service's stated mission, and that he could not explain some of his most harmful operational changes. i feel like i am stating the obvious, but a businessman with no experience working in the postal service should not have changed operational procedures without first grasping the negative impacts they would have on our delivery. he ordered the removal of more machines, justg this year alone. double the average of mail sorting machines that is removed on an annual basis. while i try to find the best in
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's recentr. dejoy reversal can better be understood as an admission that his policy and not being more disastrous to the postal service then he even understood. mail sorting machines are still being removed, leaving in question aboutr dejoy is serious correcting his mistakes. 700 machines and he has only been there four months. caused incredible harm to thereputation and trust american people have in the postal service. in the midst of a pandemic, when millions of americans make plans disastrousmail, the policy by this postmaster
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general jeopardizes the american people's well-being and poses a threat to our democracy. i look forward to hearing from our witnesses today. i yield back. rep. connolly: thank you. thank you for your service. mr. kelly. kelly: first, i would like to echo the sentiments of the ranking member and say that reports about the postmaster general are speculation. attemptring is another to attack the postmaster general instead of tackling the real issue of postal reform. my colleagues on the others of the aisle have been critical on the semester general's focus on efficiencies and have launched into conspiracy theories. the question is, why does usps need to be efficient? it is so that americans can have a reliable and affordable postal
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service. as one of our witnesses has mentioned, the postal 1970anization act of established the usps to be a self-sustaining business-like entity which would cover its costs primarily with postage. when the postal service is spending money on inefficient routes and machines, those costs get passed on to americans in the form of slower service or possibly increased postage. meaningful postal reform will require changes from the status quo and the current business model. the government accountability office recently published a report and the title says it all. service,al congressional action is essential to enable a sustainable business model.
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viability has been on the list since 2009, worsened by the long-term decline in mail since the rise of the internet. mailound that first-class declined 44% since fiscal year 2006 and that the health benefit fund is expected to be depleted serviceif the postal continues to not make payments. these are the issues we need to focus on and develop bipartisan solutions. we also need to hear from stakeholders who rely on the mail, like mr. plunkett, republicans invited. furthermore, the postal service needs to communicate a long-term business plan to congress, an item i have been requesting since the previous postmaster general's tenure.
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lastly, i want to address the false notion about prioritizing the postal service. mr. chairman, i would like to submit to the record the usps's mission statement from the agency's website adopted by the board of governors on april 1, 2020. this was adopted by the very board of governors that someone is today claim are hyper-partisan actors. it was also created for postmaster dejoy arrived and remains unchanged. it states that part of its mission is to serve the american people and through the universal service obligation, find our nation together by maintaining and operating our unique infrastructure. to carry out this mission, the board of governors states that the postal service will remain an integral part of the u.s.
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government, providing all americans with access to the unrivaled delivery and storefront network. the postal service is a crucial part of our nation's communication and commerce. hearings like the one today only weaken the public's trust in such an important institution. i yield back. rep. connolly: i would also ask that we enter into the findings the -- enter into the record the finding of the trump task force that president trump put together a few years ago recommending privatization. so there is a contradiction that i think ought to be in the public record. , our first witness is and gravelle, currently serving as an adjunct professor at uc berkeley law. then we will hear from david feynman, who is the former
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chairman of the postal service board of governors and currently ,erves as a senior partner chairman and secretary of their election center. we will hear from lisa graves, the executive director and editor in chief of true north research. we will hear from michael plunkett from the association for fiscal commerce. us, ad peter is here with familiar figure here on this committee, a former chief white house ethics lawyer under the bush administration and parent law professor at the university of minnesota. if we can ask you to be on muted and raise your right hands. swear or affirm that the testimony you are about to give is the truth, the whole truth,
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and nothing but the truth, so help you god? let the record state that all of our witnesses answered in the affirmative. your written statements to be part of the record. we ask you to summarize in your opening five-minute statement what you want the committee to know. welcome. and rakingu chairman member for the opportunity to testify. in his farewell address, president obama said something that is pertinent to this hearing. our democracy is threatened whenever we take it for granted. party,us, regardless of should throw ourselves into the task of rebuilding our democratic institutions. when voting rates are some of the lowest among advanced democracies, we should make it easier, not harder to vote. institutions is low, we should reduce the
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corrosive influence of money in politics and insist on transparency and ethics in public service. we are seeing the results. theserved as the chair of federal elections commission and we can definitely see it in the actions of mr. dejoy. that is why it is so important to have this hearing on his violation of campaign finance laws, his potential transgressions, and the postal service, which is crucial for all citizens to be able to cast their ballots. wasalmost $1 million that contributed by mr. dejoy's employees to political candidates and is urging, which was paid back through bonuses,
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, funduslegal scheme diverted from the corporate treasury and laundered are prohibited. even citizens united held that it is corrupting for a corporation to contribute directly to candidates. throughg the money employees is clearly illegal. discussing similar facts, in 2017, the u.s. department of justice concluded in their prosecution of election offenses manual, that contributions in the name of another is usually -- is often used to disguise other violations by those at their contribution limit and that a common conduit scheme involves a corporate official who instructs employees to make contributions to a candidate and then reimburses them from
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corporate funds, generally through fictitious bonuses or pay raises. 's actions are the poster child for these violations. he coerced his employees to contribute. employees thought their jobs were on the line or they would not be promoted. that inal again states all employment situations, the coercion, expressed or implied, is inherent in the relationship. so, contributions solicited from a subordinate are not voluntary. it is illegal to coerce any individual to make a engageution or in -- or in fundraising for a candidate. threat toion is a democratic processes.
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workers freedom of expression and exercising of their own political views is threatened. in almost every case of major significance over a decade, the fec has rarely enforced of the law. it is well known that the laws can be a north these ethics laws meant to stop corruption and provide valuable information to voters are essential to the fairness of the nickel process and ensuring trust in government. these protections lead to where we are today with mr. dejoy, was skirting campaign finance laws, knowing that with no consequences for violations, a could instead be rewarded for his illegal and unethical acts. now we have to be vigilant that our right to vote will not be impacted by a politicized postal
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service. across the political spectrum, faith in the political process disintegrates as americans might question both the validity of the election and the government's response to the voting challenges. andeturn faith in democracy put our protections back, we need to have hr one, the for the people eact, and acted. rep. connolly: thank you. right on the nose. forhank you, mr. chairman, inviting me to participate. a 501(c)(3)irman of nonpartisan group that works diligently to ensure that every american has a right to vote. the clintoning both
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and bush administrations on the board of governors of the u.s. postal service, and was chairman 2005.003 to i would also indicate to you from ther did i hear president of the united states or any member of the executive branch regarding postal affairs. i was offended when the president referred to the postal service as a joke. i was even more offended when i realized that there were 600,000 employees who were not a joke, were risking their lives to deliver the mail every day, folks like al rosen, who after world war ii joined the postal service in philadelphia, stayed there over 30 years and led a wildcat strike in 1970. his son is a fraternity brother
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of mine. joe, after graduating college and going to law school, joined the fbi. career inistinguished the fbi and then came -- then became an immigration lawyer. there are so many stories like this. al rosen was not a joke. evident to became the american public that the postal service was failing in its mission to deliver mail on a timely basis. a report in june of 1968 begins by describing how mail is piling up and not being delivered. it concludes that the reason for this is the intrusion of politics into the postal service. wildcat strikes in most eastern cities, congress passed the
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reorganization act to take politics out of the postal service. ascreated the postal service an independent establishment. five of one party, four of another who would then select the postmaster general. this process was to lead to an apolitical postmaster general. 2006, the law was eliminated again, to eliminate a postal rate system and to allow the postal service more flexibility. however, it established the law that if the postal service was going to change the manner on which it delivered mail on a national basis, it had to go through the postal regulatory hearing. they decided not to do that. filedulted in 25 lawsuits
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throughout the united states by attorney general. the law also requires that the postal service pre-fund it -- pre-fund its pension obligation for 75 years. this congress passed the house bill with 309 votes in a bipartisan manner. the bill presently sits on geordie leader mcconnell's desk awaiting action by the senate. in my law practice, i sometimes act as a mediator. theng heard the comments of republicans and democrats -- and there has not been one written statement against this legislation. i am asking the democrats and republicans on this committee, ask senator mcconnell to bring this bill to a vote before the senate. generalsk, semester dejoy, chairman duncan, who
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seemed to be good friends with chairman mcconnell, to ask him to bring that bill to a vote before the senate. rep. connolly: thank you, mr. fineman. ms. grace. >> good morning chairman, ranking member, and distinguished members of the subcommittee. i am the director of true north research. likep lead collaborations the ben franklin project. chief counsel for nominations of the u.s. senate judiciary committee. thorough vetting is essential for protecting the integrity of our democratic institutions. candidatessure that for positions of public trust are highly qualified and will not put personal interest for
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the public interest. unfortunately, with new information about mr. dejoy's background and actions, it is clear that the board of him.nors failed to vet i am calling on mr. dejoy to be fired or to resign. he is facing new, credible allegations of violating anticorruption laws by using straw donors. a congressman asked mr. dejoy if he ever reimbursed employees for donations and he denied it. i ask the committee to make a formal referral to the u.s. attorney's office to find out if this invests -- this violated the criminal code. jr. swore in a complaint that he was cheated out of the family business by
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mr. dejoy, who secretly created private llcs. mr. dejoy admitted that they were separate but denies he did anything wrong. dejoy hidthat lewis bank statements from two banks and an investment firm. no postmaster general in history has ever been subject to such charges before in a civil or criminal court for if mr. dejoy cannot be trusted by his own flesh and blood with not hiding his mail, how can americans trust him with our votes? how can the board of governors approve a person with this troubling history to be postmaster general? the answer might be that mr. dejoy's political contributions made a difference.
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he has helped raise tens of millions of dollars to help keep senator mcconnell in power. richard duncan admitted to the committee that dejoy was not originally on the list of prospective candidates for the job. following $600,000 in contributions, mr. dejoy suddenly jumped to the time of the list. it is wrong to make a partisan political insider in charge of the postal service, especially in an will mr. dejoy use his power as the postmaster general to deliver our ballots on time or deliver the election to the man he spent hundreds of thousands of dollars on and raised millions to help win, donald trump? fourth, his financial contributions are enormous. he has tens of millions of dollars in stock, a contracting competitor of the postal service, and he received
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millions annually from it through leases and stock transactions. no known postmaster general in history has ever had such financial conflict like mr. dejoy. fifth, his destructive actions. mr. dejoy's actions since he came to the job in june warrants his dismissal. if he was a probationary employee, he would have been fired a month ago. mr. dejoy suddenly fired or demoted two dozen service experts and on his watch restricted the availability over time and mail machines removed, far more than the usual amount in the past five years, he dictated a disruptive change in nationwide processes by ordering trucks depart even if the mail sorting was not complete. he even dictated where they could park. these dictates set chaos and hardships for senior citizens and veterans whose lifesaving prescriptions are being delivered late.
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our personal service -- postal someone of the highest integrity, not someone the and arrogance like mr. dejoy. six, unfortunately, his actions may be paving the way to privatizing it. as i documented, it was been proposed since the early 1970's. they have been running digital adds to pressure senators to not give the postal service relief funds that's previously requested. [indiscernible] an extraordinary liability no other agency or company had. but mr. dejoy playing partisan politics by refusing to seek the covid relief funding it needs. in conclusion, i urge congress to protect the postal service mission and the american people and integrity of our elections by calling for him to be fired. by fully investigating his
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activities and by restoring the role approving the postmaster, restructuring the board, and repealing the 2006 unprecedented debt anchor and other restrictions. the postal service belongs to us. thank you, mr. chairman. chair connolly: thank you, ms. graves. mr. michael plunkett, you are recognized for five minutes. mr. plunkett: good afternoon, thank you for the opportunity to speak today about the current state of the postal service. i'm here on behalf the association for postal service commerce. our members are world class organizations in financial service, health care, telecommunications, logistics, mail production, technology, and shipping. they include some of the most recognizable brands in the world as well as small proprietors offering specialty products and services. this diverse group is united in its reliance on the postal service and committed to ensuring reliable postal services remain available to all u.s. businesses and citizens. the postal service is a beloved public institution and critical component of the nation's economic infrastructure.
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also it is the center of the mailing industry that employs more than seven million americans, providing jobs never -- jobs in every state and accounting for more than $1 trillion in annual revenue. like many states, ours has been heart by covid-19. along with economic turmoil, the pandemic has brought into sharp focus the importance of the postal service to the american public. postal employees have served the public admirably since the pandemic began and been a reassuring presence in our communities during a difficult time. at the same time, the pandemic has brought about sudden and dramatic shifts in consumer behavior, exposing the underlying fragility of the system. most members rely on the postal service to deliver bills, statements, magazines, prescription medications, packages, catalogs and essential business communications. our members to a great extent fund the provision of a universal postal service in the united states through the rates they pay for commercial mail and shipping services. as congress considers how best to provide support to the postal
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service, we urge a measured and targeted approach with safeguards to ensure accountability for how relief funding is utilized. we recognize postal service has expenses tooreseen ensure protective equipment and emergency services as a result of covid-19. the understandable desire of legislators to provide relief should not lead to excessive and unnecessary diversion of resources that is may be better deployed elsewhere and do little to address the challenges facing the postal service. despite persistent stories about imminent collapse, the postal service has adequate resources and capacity to successfully navigate the 2020 election cycle. according to its own reporting, at the end of the third quarter, the postal service had cash holdings approaching $13 billion and since that time revenues have been growing thanks to significant growth in the package business. in the most recent postal quarter, the postal service generated almost $2 billion in cash flow from its operations.
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no one can say whether these shifts from letter mail is permanent, whether package growth will sustain the service or whether letter mail will rebound when the pandemic recedes and the economy improves. but the cares act passed earlier this year provides $10 billion in borrowing authority for the postal service should unforeseen events happen. -- events create the need. the post mansour confirmed the post office -- the postmaster confirmed the post office has liquidity and could be funded until 2021. some contemplated by congress it would barely make a dent to a financially sound postal service. its long-term retirement liabilities. in fact, our members are concerned major really funding could lead congress to continue to postpone much needed postal reform. we respectfully urge congress to enact comprehensive postal reform legislation to secure the future of the postal service. in order for mail to fulfill the
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statutory role to the economy, it must be affordable and reliable means for communicating and helping business. willlieve stakeholders perform legislation on several elements. one, a well-defined universal service obligation based on an estimate what the u.s. needs from the postal system. two, safeguards to ensure users of the monopoly products maintain pricing predictability. three, revised approach to funding the retiree obligation by using strategies more in line with best practices. finally, oversight to ensure accountability and transparency are maintained. else funds provided by ratepayers or appropriated by congress may be squandered or misused. the postal service is not on the verge of imminent collapse. the covid pandemic is a reminder it remains a vital part of our economy and the civic life of americans. the postal service has the employees, resources, and capacity it needs to perform its mission during the current
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election cycle without a massive infusion of supplemental funding. however, the systemic challenges that plague the postal service remain. because of the postal relief currently under consideration is unnecessary in the short term and inadequate in the long run, we respectfully suggest congress instead focus its efforts on much-needed and long overdue postal reform. thank you so much. mr. connolly: thank you. right on the money, mr. plunkett. finally, but not least, mr. painter. mr. painter: thank you very much, mr. chairman. ranking member, members of the committee. i'm richard painter, a law professor at the university of minnesota. and from 2005 to 2007, as the chief white house ethics lawyer for president george w. bush. in the white house ethics office, one of our principal obligations was to make sure that senior appointees and nominees to the executive branch were free of financial conflicts of interest. and the reason is that financial conflicts of interest in federal office are a crime.
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18 united states code 208 makes it a crime for a united states government official to participate in a particular matter that has the direct and predictable effect on the financial interests of that government official. and that statute, it's a criminal statute, 18 united -- please read it, members of the committee and staff. it applies to generally applicable matters that have a direct and predictable effect on identifiable class of persons or companies if the government official has a financial interest in the committee. -- in the company. this is the reason why in the bush administration we never
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allowed the head of an agency to have any financial interest in a company that had substantial contracts with that agency. i certainly never allowed it. when i looked at the financial disclosure forms and we sent those nominations onto the senate, we would not have tolerated that for anyone in the executive branch, whether or not nominated by the president, appointed by the president or anyone else in a senior position. why? because there is a grave risk that that person will commit a crime when they're in office. how can you run the post office and make decisions about scheduling the mail, about the specifications for contracts, about when the trucks leave and all those decisions if you own millions of dollars of stock in a company that is trucking the mail around? a contractor with a post office. it doesn't make any sense.
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so either mr. dejoy, postmaster general, has not been doing his job over the past 13 weeks or so or he's committed a crime that can be a felony. we should not be in that situation. another thing we did in the bush white house is we looked at the background of people who were coming into public service. we did not want to bring in people who had violated the law. i will not opine as to whether mr. dejoy violated campaign finance laws. i will say that if the stories reported in "the washington post" and "the new york times" are true or any piece of those is true about reimbursement of employees for campaign contributions, that is a straw donor arrangement and that's a felony. people go to jail for that. so we have a very real
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possibility, possibility -- i'm not saying for certain -- but a possibility that the postmaster general of the united states may have committed a felony before entering office and in office on 18 united states code 208 in office. this is a grave situation. it requires an investigation by this committee. it is your job to investigate. this is not a kangaroo court. i am offended as an american and having been a republican for 30 years to hear that language used. it's your job to investigate this. i submitted an additional letter with professor claire finkelstein at the university of pennsylvania outlining additional concerns about the post office and i will be open to your questions. this is a matter of great concern for the american people. thank you for your time. mr. connolly: thank you, mr. painter, for your testimony. and the chair will recognize himself for five minutes. and let me begin with you, mr. painter.
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we've heard that having a hearing that includes in large part an examination of the professional practices and potential conflicts of interest and allegations that have been corroborated by other members of the media, besides "the washington post" investigative team, with respect to illegal straw donations, do you believe that's a worthy subject of this committee and that it is in fact directly related to the operational changes undertaken by that individual? mr. painter: certainly is. a legitimate area of inquiry for this committee. the integrity of public officials in this country is critically important. that is why we screened out people with that type of ground in the bush white house. why? because we knew if we didn't, our officials will be sitting in front of this committee answering questions because this committee is doing its job.
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that's what oversight is. and, yes, if you bring in someone who has committed campaign finance violations, who's willing to do anything, including violate the law to elect someone who they want to be president or to win other elections, what's going to stop them from doing it when they run the government agency, whether it's the united states postal service or any other agency? so, yes, you are doing your job when you conduct these hearings. mr. connolly: remind us again what your position was in the george w. bush administration? mr. painter: i was the ethics lawyer and associate counsel to the president. mr. connolly: a republican president? mr. painter: i was a member of the republican party for 30 years up to 2018. mr. connolly: so what we know just from the public record, if you were in that same position today, would that have raised
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flags for you? and what would you have done about it in terms of the idea that this person could be named postmaster general or for that matter any position? mr. painter: well, because postmaster general is not nominated by the president, it's an appointment made by the board. mr. connolly: right. mr. painter: if we heard about it, we would have contacted the board and made it very clear that it is unacceptable to have a postmaster general who has any record of campaign finance violations. either that story in "the washington post", in "the new york times" is true or not true, we will find out before we nominate, before the board nominates someone. financial conflicts of interest of this sort, absolutely unacceptable. it's a no go. mr. connolly: do you believe that the board of governors has a fiduciary responsibility to have done due diligence in terms of background checks on the postmaster general before appointing him? mr. painter: absolutely.
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i've taught corporate and securities law and i worked with nonprofit organization board of directors. directors have fiduciary obligations and that includes investigating the background of people appointed to senior positions and screening conflicts of interest so people don't violate the law when they are in their position. mr. connolly: mr. fineman, you were director of the postal board of governors, is that correct? mr. fineman: that's correct. mr. connolly: based on what we know from the public record and activities by this full committee and subcommittee, do you believe the board of governors in fact did its due diligence in a thorough background check before appointing mr. dejoy as postmaster general? mr. fineman: what i hear, what's coming out in the press clearly were things where the board of
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governors should have and i suspected they would have found out had they done an investigation. mr. connolly: as former chairman of the board of governors, do you -- what is your view about the connection of the personal background, professional background as candidate for postmaster general and the potential connection with the operations of the postal service which he or she in fact theoretically head, is there a connection? mr. fineman: mr. chairman, there certainly is a connection. i think -- i understand professor painter's point of view. i would extend it a little bit further. i would think that if there is an apparent conflict of interest, we should not hire that person as a postmaster general. and you might ask why. well, it's because the american public is entitled to have confidence in their -- that the mail is going to be delivered and it's not going to be in any way, shape, or form
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compromised by the actions of the postmaster general. mr. connolly: thank you, mr. fineman. my time is up. the chair now recognizes the distinguished ranking member mr. hice, for his five minutes. mr. hice: thank you, mr. chairman. i'd like to note out of curiosity if any of our witnesses today are currently employed by the usps, those online, if you can answer if you are? >> not currently, no. mr. hice: i would just like for the record to reflect that none of our witnesses today are employed by the postal service and yet our hearing today is supposed to be about a postal update. and here we have no witnesses who are part of the postal service. in fact, we have witnesses who basically can do nothing on the issue of what this hearing really is turning into being. they can do nothing but speculate. we have a law professor, a law
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school lecturer who has determined guilt based from a "washington post" article. i counted at least two or three times, mr. painter, that you assumed guilt already to mr. dejoy. i don't see that as being very professional at all. this is not oversight. this is, again, an attempt to create political assassination, as i referred to in my opening statements. when it comes to the question of whether or not mr. dejoy broke any campaign finance laws, mr. painter, wouldn't you agree that really you have no more information than the general public has at this point? mr. painter: that's a false statement. i did not. and i'm going to repeat that i do not know whether the campaign finance laws were violated. it is a false statement that i assumed guilt. but if those stories are true,
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what are described in those stories is multiple felonies. it must be investigated. mr. hice: ok. mr. painter: it's unacceptable to have someone in a position of trust in our government who is suspected of those types of violations of the law. the same with respect to 18 united states code 208. i do not know for certain if there is a violation. mr. hice: mr. painter, you are answering questions i did not ask. mr. painter: you said i assumed guilt and i did not. hice: i'm going to go on with my questions. what we have is your opinion, which is fine. you're certainly entitled to your opinion. but it's a hypothetical opinion at this point. because it's based on an article. there's not been any investigation that's come down to it. can you explain to me what x.p.o. does?
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mr. painter: x.p.o., to the best of my knowledge, ships mail in trucks and performs other logistic operations for the united states postal service. once again, i have not assumed that the postmaster general has necessarily committed a crime but the fact of the matter is we have a contractor with large contracts with the postal service and there is a very high degree of likelihood that a postmaster general who is doing his job would be making decisions that have a direct and predictable effect on a contractor of that size with the postal service. mr. hice: are you qualified to evaluate whether or not the relationship between x.p.o. and usps has risen to the conflict of interest? mr. painter: yes. i made that decision for the bush administration. no one goes into a position -- mr. hice: are you a member of the board of governors? mr. painter: i made that determination. you don't get that job if you
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keep stock in a contractor with your agency. that's a deal-breaker because you could go into public office and commit a felony. and that i did repeatedly. and i told people, you have to sell the stock. you don't go to the department of defense and unstock a defense contractor. mr. hice: i asked if you are qualified to make the assessment and you are going back to your time during the bush administration. my question is on this particular situation, and you are not a member of the board of governors. you are not part of the vetting. the board of governors did do vetting. they did look into these issues. are you aware that mr. dejoy did divest certain assets that he had? mr. painter: yes, i know he divested. he owns contract stock in a company that has large contracts with the postal service. i am qualified to say that is unacceptable. it would have been a deal-breaker in the bush administration. we would not have nominated, appointed or approved in any way
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of a senior executive branch official. mr. hice: the board of governors did. he has divested other assets. when it came to x.p.o., the u.s. postal service cleared him to hold the assets -- whether it's wise or not i am not getting into. he made clear transparent, he laid out there his assets and he was cleared, is that correct? mr. painter: the board of governors made that decision and i am here to say it's wrong and i am qualified to say it's wrong and it poses a risk that he could commit a crime in office. mr. hice: sounds like he confirmed his belief that a crime has been committed. mr. painter: i said a grave risk that a crime would be committed. mr. connolly: for the record, the chair heard mr. painter frame it in a hypothetical. should if this were true. the chair now recognizes the
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distinguished chairwoman, mrs. maloney, for her five minutes. ms. maloney: thank you very much. i thank all of the panelists for their really important testimony. mr. fineman, you have extensive experience with the high-level inner workings of the postal service. you spent 10 years on the board of governors. you really are an expert on the postal service and the board of governors. i would like to ask you about the process of selecting the postmaster general. in your 10 years on the board, you were involved in the hiring of two postmasters, one in 1998 and the other in 2001. is that correct? mr. fineman: yes. ms. maloney: during those selection processes, was it standard for the board to contract an outside firm to conduct the search? mr. fineman: yes, it was. ms. maloney: well, that makes sense. the board is small and needs to perform an executive search for
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one of our country's most important independent agencies. now, during our hearing on august 24, chairman duncan indicated that he put mr. dejoy's name into consideration. after russell reynolds associates had already provided a list of qualified candidates to the board for consideration, he went into detail. they had many people considered. they narrowed it down to 200. then to 50. then to 12. in either of your selection processes for postmaster general that you participated in, did board members add candidates after the search firm had already done its work to narrow down the list of candidates, possible candidates? mr. fineman: to the best of my recollection, i do not remember anyone recommending anyone on a personal basis. and quite frankly, if they did,
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it wouldn't come before the board initially. it would go back to the search firm so they could do their due diligence about the candidate. ms. maloney: thank you. the process the board followed in this instance, to me, seems very unusual. in your experience, how is the selection process for the postmaster general supposed to work? mr. fineman: in hiring an executive search firm, the executive search firm gives you a multitude of candidates. you narrow down that multitude of candidates. they do some interviewing, and then we come down to about, i don't know, 10 or so candidates that we interview, that the board interviews. ms. maloney: well, mr. fineman -- mr. fineman: we make the determination as to who we want to hire. and in that process, we are getting information about the background of all of the individuals.
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ms. maloney: thank you. now, if you were still on the board, would you have gone out of your way to add mr. dejoy to the list of candidates? would you have chosen him? mr. fineman: let me first say that i would not have gone out of my way. if you're asking me whether i would have chosen him, the answer would be no. it's apparent that there was a conflict of interest to begin with. that he still had an interest in one of the largest contractors with the united states postal service. as i said before, it's not even the direct conflict. it's the appearance of a conflict. which would concern me. and secondly, if i can just say, if we leave aside the conflict issues, when you're looking for a postmaster general, there are certain things that we look for. we look for communication skills.
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am i going to -- is the postmaster general going to be able to communicate with the stakeholders of the postal service? ms. maloney: reclaiming my time because my time is limited. mr. fineman: that means you and your republican colleagues. ms. maloney: ok. so mr. fineman, we have requested information about the search from the board. but to date, they have refused to provide us with any information at all. do you think it is appropriate for the board to refuse to work with this committee given the responsibilities we have for oversight for the postal service? mr. fineman: absolutely not. they should be giving you what you asked for, and quite frankly, they should be giving you more than you ask for. ms. maloney: thank you. thank you very much. and very, very quickly, mr. plunkett. the metadata in your testimony says it was written by jessica lawrence. who is jessica lawrence? mr. plunkett: she's my
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predecessor at my current position. and i used a document template that had her name on it. ms. maloney: so she did not write it but it looked like she did? mr. plunkett: absolutely not. ms. maloney: my time has expired. i particularly want to thank everyone for being here today. especially mr. richard painter. the post office should be a bipartisan, nonpartisan position that serves the american people and you made that point very clear. i thank you for your service. for all the participants' service and for you being here today. i yield back. mr. connolly: i thank the distinguished chairwoman. the gentleman from alabama, mr. palmer, is recognized for five minutes. mr. palmer: i thank the chairman. first of all, this is all about politics. it's really not about the post office. and the witnesses reflect that.
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it's remarkable some of the claims that have been made by these individuals. ms. graves raising questions in her work about dark money and sources of funds when her own organization received over $500,000 from outside sources. mr. painter apparently thinks he's still campaigning for office. you're very animated in your responses. yet -- and you want to tout your republican credentials when you ran for the senate as a democrat.
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anything related to the post office. if it were, this would have been done years ago during the obama administration when they were going to shutdown 3700 post offices. i know mister connelly cares deeply about this. we really want to see reform for the post office, but they were going to cut $14 billion, $10 billion, $20 billion in cuts, impose 3700 post offices, 120,000 jobs. this is documented in the washington post since we are using the washington post as a source.
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talking about problems with delay and delivery of mail, changes being made, closure of sorting facilities not just taking sorting machines out but closing facilities. >> freeze this time, please freeze this time. as a matter of record, not the obama administration but the post office under the previous postmaster general, and it was an uproar and we got it stopped because it was done unilaterally, capriciously and no consultation, just wanted to make that point. it was a ton of it and i was here for that. it was on a bipartisan basis
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but that postmaster general didn't do consultation, i thank my friend for yielding and his time was intact. >> i appreciate that, the post office has had major major problems for years. we have been trying to sort through this, to resolve problems with the post office it was political and i want to point out the changes, the current postmaster general accused of making were implemented, and to make the same thing. we are casting aspersions that were not justified.
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for these other issues, this has become so highly partisan. as to the divisive notice of what is going on in congress, and to bring witnesses it doesn't advance the agenda for the post office, that is my problem with this hearing and mister chairman, where your heart is, i take exception to what i am hearing today. >> the gentle lady from the district of columbia for five minutes.
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congresswoman norton, are you there? we will return to congresswoman norton. >> can you hear me now? sorry about that. mister chairman, the ranking member wondered why you were having this hearing. i want to commend you for this hearing, the postal service may be the most important agency in the united states today, to the pandemic not to mention the upcoming election. appreciate the hearing very much. let me get on with my first question.
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this question is for you because as a former chair you will be particularly qualified to answer this question. it has to do with privatizing the postal service. i know that the reorganization document of the administration made it clear it wanted to privatize the postal service, as former chair -- >> can i interrupt, can you turn on your video please? >> i am sorry. can you see me now?
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start video. it says video. i have been on video the whole time. >> we do not see you. >> i can see me. >> a beautiful image it is. we have a technical problem. >> i can see me on my screen and i can hear me. >> we will put up with technical problems, the gentlelady may proceed. her visual will come through shortly. >> i would like to know the
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notion of privatizing the postal service is on the administration, who benefits from privatizing the postal service and who would lose? >> let's start with your first question, the private delivery services as you raised, postal service as you diminish its capability more people go through the private delivery services get their mail delivered, that is who will benefit. particularly rural america.
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congressman keller, sullivan county, pennsylvania where i spent a fair amount of time, one of the most beautiful places in america those people will not get mail in a regular basis, the same goes for people in potter county. your constituents will not get mail on a regular basis if it is privatize. in the inner-city, in north philadelphia, west philadelphia they won't get mail on a regular basis because it is not profitable for private delivery companies to deliver mail regularly to the inner-city and rural america and one of the largest customers over the years of the united states postal service has been private delivery companies, they don't want to deliver, you know they
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give it to the united states postal service because they will deliver packages into montana, iowa and the private delivery companies can't make money doing it, can't build the truck with enough packages to go into rural america to deliver packages. >> important point through places that were unprofitable. very important it seems to me. mister graves, could you speak to the concern this that the board of governors, a member of congress, like lewis dejoy who
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invests in something that benefits from postal service or would benefit if the postal service moves to privatization. >> thank you for your question. it is important to understand where witnesses testified for the prospector general for millions of dollars of thought in a company that does business with u.s. postal service. one of the things i feel -- hundreds of contracts with the postal service including revenue, $37 million a year, they help deliver the mail during peak holiday times during elections. the postmaster general was appointed to this position, sit basically because the donors, to the process by duncan who
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helps to this day, mitch mcconnell -- congressman - the politicization of the postal service, i would say to you it is coming from the postal service and it is due to selection of lewis dejoy by mister duncan, he will serve until 2025 so you have postmaster general and chairman of the board who are the most political people to hold the position since the 1970s since the reform and this pattern of exchanges and edicts by lewis dejoy that affected the american people and veterans and delivery of vital medicine into more. is lewis dejoy closer? >> the gentle lady's time - thank you.
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mister keller is recognized based on this. >> i would like to get at things. my district was brought up for people i represented, all 15 counties which i advocate for the people every day and i will continue to do that. the same concern to make sure constituents get mail to stand up for hard-working people of the united states post office that process and deliver our mail and do the good work and get down to postal reforms which the hearing is about but somehow it has devolved into political contributions and accusations put out in print of the new york times and
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washington post, mister painter, you brought up accusations in the washington post new york times. are you aware they publish stories that were then found not to be true? >> i do not know whether this story -- >> the question is yes or no. have you been made aware they published something that was later found out not to be accurate? >> every newspaper in the country has done that once in a while. if true it is a crime. >> i wish we were getting down to the issue of making sure the post office has the tools it needs to perform its job but since we are on political contributions i will ask a few questions. have you ever made political contributions to political campaigns? >> absolutely. >> what party? >> both democrats and republicans we >> have you contributed to any democrats the cycle? >> yes.
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quite substantially actually. >> i am happy to tell you -- >> i have the record right here. >> have you contributed to political campaigns, ann ravel? yes or no? >> was the question for me? >> ann ravel. i didn't get the answer. >> the question have i contributed to campaigns, yes i have. >> miss graves? >> i've not contributed $2,000 to the election of donald trump. >> have you contributed to campaigns?
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>> i have not made any contributions in the cycle. >> yes or no is the answer to the question. mister richard painter, have you contributed to campaigns? >> yes. to republican campaigns. >> mister plunkett, have you contributed to campaigns? >> in small amounts yes. >> rather than having people who contributed to campaigns we should have people who understand the postal service and how to make reforms so this can be sustained. i have heard much testimony tearing down character-based on stories written in other items, if anyone has done anything illegal i was the first to tell you they should be held accountable to the fullest extent of the law. making sure the united states postal service provides the good service they do for a very
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long period, taking care of constituents that rely on that the do the work every day but we are not doing that. we are doing many other things. it is quite frankly disappointing and the other thing i would like to say, i am committed to making sure, i heard the issue of prepaid benefits it is a serious thing, when the fund that pays for postemployment benefits is in danger of running out of money in the coming years. a contribution now so that over time when they retire there are adequate funds available, for the employees benefits. we should be discussing how we work together across the aisle to make sure those things are accomplished, not all the other things, i have proven my point, about political campaigns and go on to a meeting where you
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get to the business of solving issues of the postal service, thank you and i yield back. >> is the co-author of the major reform bill cosponsored by mark meadows i assure the gentleman from pennsylvania, and i know of the full committee chair for postal reforms, the issue before us that was being discussed was not whether somebody made a political campaign contribution, the question alleged in the washington post and new york times, whether straw donations, whether there was pressure or coercion and secondly violation of law by covering those donations through bonuses or salary. that is illegal and not whether somebody made a contribution.
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>> if i can in the united states under the constitution people are presumed innocent until proven guilty and are not supposed to be proven guilty or innocent by a newspaper article. >> to examine charges that may be made about our responsibility for one of the largest enterprises in the country. your district as well as mine. >> let's get down to that and call the people that can testify. >> that is what we are doing. you are trying to discredit this examination having to do with the postal service and with that, respectfully i disagree. >> the chair recognizes the gentleman from maryland. >> can you hear me. >> appreciate the hearing, on
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august 2, '04, the oversight committee, postmaster general lewis dejoy and the board of governors testified and at that hearing, lewis dejoy stated i have no patterns of misconduct based on what we know based on testimony, amid the endless parade of conflict of interest we've seen from the trump administration lewis dejoy's conduct sinks to new depths. let's look at the straw donor situation. lewis dejoy was chairman and ceo of logistics from 1983-2014, as the post has
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reported between 2000-2017 he may have allegedly operated this straw donor scheme at his company by reimbursing employees in their salaries for contributions they made to republican candidates. ann ravel, if the reports from the washington post about lewis dejoy are true, and knowing what you do about campaign finance law, does that qualify misconduct? >> yes, if they are true, and since they quoted employees who indicated there is a as 32 it it would certainly qualify as criminal conduct in addition to civil. no question about it, in my
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testimony i quoted the department of justice who in 2017 indicated the source of schemes are clearly illegal and in fact over 10,$000 could be convicted and sentenced to jail for two years and even more which led in this case for five years. >> the -- thank you for that. the post found between 2000-2014, 124 individuals, federal and state gop candidates, this is worth noting they had not previously
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made political donations and not made political donations and leaving the compass. something was going on in the election commission, i would be interested in knowing if the allegations, federal election laws, with chapter and verse on that. -- >> it is illegal and a felony to reimburse, if it is serious and will hold, that is what the
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law provides. if a person wants to contribute to a campaign, disclosed they are the donor, and illegal contribution for corporations or some other reason they don't want to be identified, the statute is extremely clear that is on its base illegal. >> let me jump in real quick get something on the record from you. if they should hold lewis dejoy accountable who is culpable in situations like this where employees are paid after they convey that, what would you say to employees wrestling with
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whether to come forward and provide information about this. >> the gentleman's time is expired but the witness may respond. >> when the ceo is pestering employees to make these contributions, the ceo is culpable. >> if the committee knows they receive the money for a fraudulent scheme they will refund the money. given the information we know it was not going to eliminate the culpability of assertions who engaged in the donor scheme. >> gentleman from wisconsin is recognized for his five minutes.
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>> i have questions, i would like to thank mister palmer for his questions. it shouldn't matter the political background of someone but i was left under the impression that mister painter was a democrat unless mister palmer brought up the he was a republican unless mister palmer brought up the run for u.s. senate. in his testimony. >> mister chairman, i am an independent. iran in an open primary as an independent. >> but not a republican. >> i'm sorry, did you say you were an independent? >> go ahead. change independence, is that what you are saying? >> i was a republican, i became an independent in 2018 because of my discussed with what is happening in the republican party.
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>> i was under the impression you ran in the democratic primary. a lot of the attention to the post office has come because lewis dejoy is trying to rein in costs. to you feel cost control members, anyone using the postal system? >> any efforts that make the postal service more efficient are to the benefit of all uses of the system. last week the postal service's office of inspector general showing 2014-19 usage increased at the postal service by 30% despite what declined in each of those years. we care very much that efforts are maintained to keep the postal service efficient and remove unnecessary costs. >> sabotaging the post office for the mail, you felt things have been moving in the right direction? >> i would say these things we
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have observed so far are consistent with similar efforts in the past under different postmasters general, not all that surprising to be honest. >> how long have you been involved? >> my fifth year i worked for the postal service for 28 years. >> you should know about the postal service. how long has the postal service lost money? >> every year going back to at least 2008. >> how do you feel they should get those costs. >> efforts to increase productivity. to concentrate its efforts, the last network, as efficiently as possible. things congress could do, the necessary burdensome
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retirement. the service publication and determine what the american public needs in the 21st century. it goes to 1970 and needs re-examination. >> determined $25 billion in a 5-year period was paid for overtime and the amount of employees with over time increased by 430% during that time. how to get those costs under control? any specific ideas on overtime? >> the report was not is detailed in providing complete answers. the things the postal service is attempting to do, taking exit sequence, eliminating unnecessary transportation trips, all those things can help and all need to be done to ensure the cost of the postal
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service remains under control. >> some of the postal workers, tell me they are getting more overtime or some people lovely overtime but overall i have had one letter not delivered to me on time. doing a good job delivering the mail. >> in general yes. >> they have been tested and the increase in packages as a result of the pandemic, not what the network was designed for in the postal service does a different job delivering mail. >> is it true the postal service, is it true their sales have gone up the last since the
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pandemic? >> the last few month postal service above plan and above last year so they are exceeding revenue expectations. >> thank you for the time. >> i will enter into the record what has already been entered into the full committee record. the service performance measurements, a briefing of the postmaster general by the postal service shows contrary to mister what -- a sharp decline in service since week 41 which is the same week in which lewis dejoy took over the postal service and shows a substantial 728% decline in service below the baseline. it is not a normal fluctuation according to the postal service's own documentation. i now -- you are next, you have
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yielded to miss lawrence, thank you for the courtesy. welcome. >> thank you so much. i just want to say let's not forget this is an election year, we are confronted by voting by mail and lewis dejoy like we mentioned, there should be a comprehensive plan. we are in support of postal reform. i sat in those committees, the leadership - timely and why
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didn't lewis dejoy do his job and present to us his plan for a comprehensive reform of the postal service? i would be glad to have that conversation but today we are here in the midst of the president of the united states continuously attacking the postal service and its long-standing ability to serve people. the president is saying the postal service is not operating. we have a postmaster general who is not doing his job and admitted he doesn't understand the post office, sitting here today saying we need postal reform then that is what we are supposed to be doing and i join my colleagues saying we will have that conversation any day of the week. that being said, recently millions of americans received a mailer from the united states postal service urging people to vote by mail.
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what he has done in other situations, he did not consult with the key stakeholders. he mailed a mailer that tells the american people across the country even though each state has established its own plan, questioning mail in ballots, 15 days before election day, with absentee ballot application in michigan. it is confusing. given the circumstances surrounding lewis dejoy's
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actions. the conflict we are seeing the voter integrity commission, what should we be doing as members of congress to ensure these actions that we continue to see will not continue, others seeing it as a way to interfere in the voting process, can you give me your educated opinion on what is happening? >> >> i was confused, everyone gets a vote. it is so important, if lewis dejoy is not held accountable
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by this public discussion. with alleged unethical behavior. lewis dejoy rather than acting independently, and the person who got him where he is. in particular with regard to opposition to mail ballots and attempts to undermine trust and confidence people have in the electoral system. we know when people believe
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there is an issue with the electoral process, essentially voter suppression leads them not to vote, in the case of the mail, concerned they will expose themselves to covid-19 instead of mailing, - >> the gentlelady's time is expired. the chair recognize the distinguished ranking member for unanimous consent. >> bringing clarification to the point, i would like to ask unanimous consent from the washington post entitled meet richard paynter, the anti-trump former republican running for senate as a democrat, the washington post which is the minnesota primary election
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results which registered as a democrat. >> i did not register as a democrat. may i respond? he is challenging the credibility of my testimony. >> as a matter of fact record you wish to correct the record? >> if i do. the chairman of the minnesota democratic party ken martin publicly chastised me for refusing to say i was a democrat. beat me again the primary against smith. in minnesota, open primaries, the republican primary democrat, i will choose to do so in the future if i want to. that is my right in the state of minnesota. >> i respect that right. i was clarifying the point with unanimous consent articles.
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>> without objection and the chair will lead unanimous consent request a series of articles, one from cnn on financial disclosure revealed the postmaster general's business and england and likely conflict of interest, the second is the article on postal contracts, questioned in 2001 by the postal service audit, then from the guardian trump's postal chief ousted brother for family firm court files alleged in the washington post article that has been referred to on multiple occasions on lewis dejoy's rise as a gop fundraiser for company workers who were later reimbursed former employees. without objection all those articles will be entered into
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the record of this hearing. the chair recognizes the gentle lady miss spirit for five minutes and thank you for her patience. >> thank you for being here today. i have a number of entries i would like to make into the record, one is the tip for treasurers from contributions and the other is strictly prohibited and the sec complaint filed against lewis dejoy, also a letter from the project for government oversight. >> without rejection those will be entered into the record. >> thank you, mister chairman was let me enter into the record the actual postal customer postcard that i received that has been the topic of conversation this morning. it appears the colorado secretary of state attempted to
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get the postmaster to correct the postcard for colorado voters. it was ignored. the usps mailer was only being presented as a recommendation whatever that means. >> without objection let the record show the chairman received that postcard in virginia. >> let me go to ann ravel. as former director, you know the law very well, you indicated that if in fact employees were coerced and you including coercion the word implied, they had a fear of being fired or if they would not be promoted, we do know there's a human resources director of lewis dejoy's former company that made these
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statements, would you agree or firm up what you mean by implied, the fact you don't complain about it but are fearful that you will lose your job or not be promoted would be implied coercion? is that correct? >> let me say the department of justice discussion of this issue made it very clear that just asking it is implied but because of the unequal relationship between a boss and employees, that in itself are coalition. >> just to have -- >> the other thing that is
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interesting, if you provide them a bonus at the end of the year you get a business tax deduction as the employer. is that correct? there's lots of violations going on it would appear. let me move on to paynter, you are a former white house ethics lawyer, counsel to george w. bush, you were a republican for 30 years, you are now an independent, let's make that clear to everybody. let me ask you this, lewis dejoy has retained an interest anywhere from 30 billion, and $75 million in the company x people logistics and postal service paid $33 million to $45 million annually since 2014 including highway contracts so
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records show surge in revenue since lewis dejoy took over on june 15th. the service paid logistics and subsidiaries $14 billion over the past two weeks. if we go to the same period last year it was only $3.4 billion. mister painter, does that create a conflict of interest? >> somebody is making a lot of money. the conflict of interest is created by the fact the postmaster general has a financial interest in a company contracting with the postal service and obviously if he is making any decisions that have a predictable impact on the company he violates the criminal conflict of interest statute. whether the violations occur or not i cannot say for certain or that those violations were added to the profitability of the company. i can just say somebody is
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doing very well. but it is illegal for any united states government official to participate in a particular matter that has an impact on their financial interest and i am afraid there is a risk the postmaster general could be doing that. >> my time is expired. >> miss plaskett, you are recognized. we will come back to her. congressman kahana, we will come back to him. congressman raskin, representative raskin. are you with us? >> thank you very much. >> you are recognized. >> thank you for calling this astounding hearing.
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postmaster lewis dejoy, 35, $75 million invested in this former company, where major private contractor for the postal service. last year he made somewhere between 1 million, and $11 million in gains. mister painter, you were george w. bush's ethics advisor. would you have signed off on lewis dejoy's appointment as postmaster general if you had been advising the board of governors or been in the administration without his commitment to divest the 30-$75 million he owns in stock in this private contractor that gets contracts from the post office? >> absolutely not. might have contacted the white house to ask about this situation and told them no way.
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if someone has stock in a contractor they must divest if they want a job with the agency. that was the job of the bush administration. that is a rule i did not see violated once. >> could the secretary of defense have taken office when you worked for president bush when he was investor she was invested in millions of dollars in defense contractors working with the department of defense? >> the position of the bush white house is now go, we are not going to nominate that person, without divesting every last penny and they get a tax benefit for selling it. there is no excuse for selling the stock. they would not have gotten the job in the bush administration. >> how did this happen? >> this happened because the board of governors shows to
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appoint lewis dejoy. this was not a presidential appointment so it didn't go through the office of government ethics, they never had a chance to review this. no way the office of government ethics would signed off on an agency head who has large amounts of stock in a company contracting with the agency. it is a nonstarter but they bypassed that because the board of governors based the decision on their own with their own lawyers looking at it and came up with the wrong conclusion. >> some of our colleagues seem angry at you that you were a high-ranking republican official in a republican administration. now you are an independent but they seem to think we should set ethics aside and just stand by our political party. tell me why you think it is important as someone who has devoted his life to ethics that we place ethical conduct in public office ahead of our
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partisan allegiance. >> the, conflict of interest statute is not about partisan politics. it is about the integrity the american people expect in government and we have the right to affect a government with agencies run by officials who are free of conflicts of interest. proposal on the right, the post office is not politicized, in detail with a letter with professor claire finkelstein, testimony, the concerns we have about the politicization of the post office and i have to say whether we are democrats or republicans, when it comes to delivery of the united states mail, this country is in serious trouble. >> wise the postal service not released lewis dejoy's ethics documents even in rejected form, should they do that? >> the postal service should
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release all of the ethics documents, all of the communications about lewis dejoy immediately. this committee can conduct a proper investigation which is what you are paid to do on this committee. our representatives to investigate allegations of corruption and violation of ethics rules in the government, they should all be produced to this committee immediately. >> the government ethics office has yet to certify lewis dejoy's financial statement. is that a problem, something that should happen? >> definitely a problem and at this point in his tenure as postmaster, a question i answer for you is simply unacceptable. >> what do you think -- >> the gentleman's time expired. >> i yield back. >> the gentleman from tennessee is recognized for five minutes.
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>> appreciate this excellent hearing, out of the full committee to consider calling as witnesses 124 employees. and the former hr manager of the firm, reimbursed not only in hole but the taxes were paid in extra compensation which is like committing a crime to present -- an extraordinary, this committee has a special opportunity to find out the truth and perhaps lewis dejoy will be exonerated, 124
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employees put in this situation in aggregate $1 million of contributions. this is substantial. in an effort to be constructive, the single point of bipartisan consensus is this house past hr 2382 this winter with 309 votes, substantial bipartisanship. that would relieve the post office of its annual $5 billion straitjacket it is required to wear and has been wearing since 2006. this is a requirement as the chair knows, no other federal agency, no private firm has to wear a straitjacket at this time. business talks about a level playing field, no unfair advantages, this is a crippling blow to our post office. one of the witnesses testified
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earlier post offices since 2008 are losing money, one of the primary reasons is the $5 billion charge that is completely unfair to require if no federal agency or private firm is required to pay this money. >> will my friend yield? >> i would be delighted. >> i couldn't agree more and i would point out talking about comprehensive reform, one of the sticklers prevent encumbrance of reform from coming to the floor is this issue because it involves medicare, and ultimately would involve the signing off of the committee that is difficult to achieve. i completely agree with my friend. >> to put a finer point on it, never has the post office been led by more partisan people are people closer to the current
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senate majority leader mister mcconnell yet he is the one refusing to even consider this legislation which of it past the house so overwhelmingly and bipartisan passion presumably would have substantial support in the senate so it is a particular irony that mister duncan from kentucky, one of mister mcconnell's closest friends and lewis dejoy, unable to persuade the senate majority leader, to do more to restore the competitiveness of the post office than any other single factor. another point that has come up in the hearing so far is not only is xp you overcharging the post office today but it was revealed by in dc news that 20
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years ago, the prior company was overcharging the post office because somehow he got a no-bid contract under the bush administration where mister painter worked as well or concluded the post office was probably being overcharged $53 million and that was 20 years ago. this is an extraordinary thing to have someone overcharged supporting the post office, $53 million, 20 years ago gets promoted postmaster general, this is a history of wrongdoing even if you disregard the strawman contributions. this is an extraordinary situation to have the post office led by someone, as mister painter summarized, committed felonies before and during his tenure as postmaster general but never has the post
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office been so poorly led. there's a lot of work to do, there are ways to combine with our republican friends, by relieving the post office of this annual obligation but first we've got to make sure the post office is not being led by criminals. i think the chair. >> i think the gentleman from tennessee. is that a question you were putting to mister painter? >> he would be welcomed to opine. >> you may respond even though the gentleman's time has expired. >> i am very concerned that there is a grave risk of ongoing violations of 208 and very concerned the reports of conduct which if true in connection with contributions would be illegal straw donations and violations of federal election laws.
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i'm going to ask the chairman to introduce into the record to clarify my testimony and proof of my testimony which is the challenge before the committee an article in the minneapolis star tribune from 2018, dfl and bitter clash with richard painter saying, quote, party chair ken martin calls painter, quote, a wolf in sheep's clothing refuses to say he is a democrat. that is where we are, part of the politics, i am -- the party chair in minnesota for running an open forum. to come before this committee and my testimony and the validity of my testimony challenged by republican members of the committee who don't bother to do their research. i'm an independent and an american and i am disgusted with what is happening in the
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post office and other parts of this administration. >> without objection the article to ensure referral will be entered into the record. i must observe ironically, i hope we don't get back to the point we start asking witnesses are you now or have you ever been a member of a particular party. that is a different subject for a different time. for the record, mister painter insists he is not a democrat and entered into record the conflict with ds fell chairman of minnesota's evidence and we accept that. the chair recognizes the gentlewoman from florida, miss wasserman schultz for five minutes. if we could begin miss wasserman schultz's time all over again. >> of practice. >> did you say you are on your phone?
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>> know, i wanted to make sure. you don't want to hear this phone ring in the hearing but trust me. good afternoon. i appreciate the indulge in us and for the purposes of asking a question, there could not be more cortical time for the postmaster general to cooperate with the committee or to ensure that the american people are able to have confidence in the united states postal service, but it is functioning properly and prepared to meet the demands of the moment but instead of taking reasonable steps like soliciting an advisory opinion by amending, complying with document requests or listening to the needs of local plant managers lewis dejoy's alarming lack of transparency and accountability created more doubt about his motivations every step of the way. i got a personal taste of this stonewalling earlier this month when i was denied entry to two south florida united states
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postal service facilities when i arrived tubes the morning shift. there was no justification for turning me away. my office provided advance notice, will in advance notice to usps management, i had employees with me who were able to support me, i posed a risk to health or safety, i have toured these facilities in the past without being informed of notice requirements was the key difference from past visits is we now have a postmaster general who prefers to hide the damage he has caused and continue to carry out the implicit orders of our lawless president. mister feynman, as former chairman of the post office board of governors i want to ask about the value of transparency. does the usps have a duty to be transparent when it makes operational changes that affect the mail service? >> absolutely. it is an obligation as a matter of law to be transparent. secondly, it seems to me that i
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cannot understand why you would not be transparent with this committee and other committees just to tell people what is going on his right now we are in the middle of an election season. the american public deserves to know that it is going to be able to have a fair and equitable election.. .. postmaster general who is going to communicate with all of the stakeholders that are interested in making sure that happens and that includes you, madame congresswoman. >> thank you. and beyond any statutory obligations to obtain public comments, what are the reputational benefits of the usps being transparent with this committee and the american public would you say? it is a quest
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>> you know, it's a question of who are your customers. postal service has thousands of stakeholders, both parcel shippers association, the first-class mailers, the unions and others. and it is important that those people understand what is going on with the postal service and understand it in a regular basis. but now it's evens. more important. there shouldn't be a woman who comes up to me and says i'm going to push my 80-year-old mother to vote and were going to stand in line at auto care how long it takes because i'm scared the postal service is not going to deliver my ballot on election day. that's scary. i would say to her d you can't risks that. get your ballot in early, et cetera. are scared. >> as we move closer to the
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present your lecture and continue to do with the covid-19 epidemic how concerned are you but the continued reports that sort of machines aree not being utilized to the maximum extent even in the face of admitted delays by mr. dejoy and slowdowns of the mail delivery? t hearing. i remember you saying that you went into a facility and they were unplugged. me -- why can to you not just plug them back in and bring in a technician? and the american public would feel confident and feel more confident that their right to vote was not being obstructed. >> and the mail would be less likely to be delayed. mr. dejoy said he would not allow local managers to plug those sorting machines back in.
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very transparent what is going on here. thank you for your previous service and your answers. >> the gentlelady is correct. record, theof postmaster general flat out refused on the record, undergrowth before this full committee to reconnect those sorting machines. the scam -- i believe i saw you. are you there? yes, thank you. [indiscernible] differentlly in two -- hold one second.
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>> you are muted. can you unmute? >> we cannot hear you. >> i'm so sorry. >> well, well she is clarifying that, i would like to insert into the record statements in support of the hearing from citizens for responsibility of
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ethics in washington and two recently released reports by alicia graves. without objection, so ordered. --is prepared to join us she prepared to join us? she is not. for the record, you indicated i serviceat the postal did not necessarily need the revenue stabilization of $25 million in the heroes fund. for the record, that $25 billion was a recommendation of, of all people, the postal board of governors. not a democratic idea. it was by the republican majority unanimously of this board of governors. it recommended the stabilization which is included in the heroes act. million fored $25
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infrastructure in the infrastructure act. we tried to act on those two and put the infrastructure piece in the infrastructure bill. >> just for clarification. that request was before the ovid weref hopc released. the context is important to understand. >> mr. plunkett mentioned the $13 billion cash on hand as if somehow that solves our problems. i would play out for the record that the payroll of the postal service, every two weeks is $2 billion plus. $13 billion is six payrolls. it is hardly a panacea. the benefits from the surge
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in packet demand. just as that appeared unpredictably, it could disappear unpredictably especially as we all hope when the pandemic ends, what happens to that? we don't know. and itot a certain thing is not a long-term and stable solution for the postal service which i know my friend from georgia wants to address as well. i just want to put that on the record in terms of context. >> [indiscernible] >> if i may clarify? >> of course. that westimony agrees support targeted relief for the postal service to the extent required. i should point out that we do not always agree with the postal service or its board of governors. for a3 billion only comes
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short amount of time but they are taking in revenue far in excess of expectations. the most recent evidence is that package deliveries runs 40% over normal levels. while i agree there is a need to address long-term challenges faced by the postal service, we need to be careful with how we do so. >> was there someone else? i would underscore the uncertain nature of relying on packages in the pandemic. the president of the united states has said many things about the postal service and one of which is that the problems would go away if we simply tripled or quadrupled the cost of package delivery. and as i know mr. plunkett knows, if we act on that recommendation, we put ourselves out of business for package
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delivery for the postal service. we would price ourselves out of the market. and as i know mr. plunkett knows , pricing by the postal service is determined by the postal regulatory commission by law. not by the white house or jeff bezos. there are not sweetheart deals despite what the president has insisted. getting the price right and hoping this market surge represents a new plateau is an uncertain thing to base the entire future on and that is why we believe we need to stabilize the postal service for a much longer pair your road of time to make sure we get through the pandemic and to make sure that we clarify that all of the resources are there for the postal service to guarantee reliability during the election. and that we can buy some time to develop a new business model for the 21st century. has five, everyone
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legislative days with which to submit additional questions. mr. plunkett, there may be some for you from my friend from massachusetts that could not be here. just to alert you that that may happen. those questions will be forwarded and those questions will be forwarded to the witnesses through the chair and i would ask all witnesses who get such questions to try to be as speedy as they can in providing responses. and with that is hearing is adjourned. [inaudible conversations] [inaudible conversations] [inaudible conversations]
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[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]
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>> this morning packing homeland security secretary chadwell and fbi director christopher we will testify at the house committee hearing on threats to national security. watch live coverage beginning at nine eastern on c-span3 or listen with the free c-span radio app. >> booktv on c-span2 has top nonfiction books and authors every weekend. saturday at 7:30 p.m. eastern johns hopkins university history professor martha jones explores the efforts by black women to win the right to vote.


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