Mnuchin Rejects Claims Postal Service Review Sought to Aid Trump

Mnuchin Rejects Claims Postal Service Review Sought to Aid Trump

September 2, 2020

Treasury Secretary Steven Mnuchin denied meddling in U.S. Postal Service operations to aid President Donald Trump, saying he has focused on fixing its deteriorating finances.

Mnuchin said in an interview that his financial review of the USPS was not used to illegally Inc. or interfere with the presidential election, as alleged by Democrats and a former postal overseer.

“Making the comment that we were asking for things that were illegal — I find that a bit ridiculous,” he said Tuesday in a telephone interview.

Mnuchin’s review has come under scrutiny after Postmaster General Louis DeJoy enacted changes to the service’s operations this summer that led to nationwide delivery delays. Democrats say DeJoy, a major donor to the 2016 Trump campaign, was seeking to sabotage the Postal Service to hurt vote-by-mail, which Trump has claimed, without evidence, will lead to a fraudulent election outcome.

David C. Williams, vice chairman of the board of governors until he stepped down in April, told lawmakers last month that Mnuchin made illegal demands of the postal service. He said Trump sought to turn the service into a “political tool” that could be used to punish Amazon by raising shipping prices, and that Mnuchin led the effort.

Williams said Mnuchin meddled in Postal Service operations by asking for details of contracts with its largest customers, such as Amazon,United Parcel Service Inc. andFedEx Corp.

“We asked for copies of contracts because that’s what’s typical of any lender,” Mnuchin said, drawing on his experience starting a hedge fund, financing Hollywood films and running a California mortgage lender.

Trump’s Complaints

Trump has frequently complained that the Postal Service is losing money on Amazon’s so-called last-mile deliveries — even though the agency has repeatedly said that’s not the case. Mnuchin, in the interview, declined to comment on whether the Amazon deal is profitable. Its contract with the USPS is confidential.

The administration’s involvement is perceived by some as interference in what was designed to be an independent institution. Congress passed a law in 1970 that took the postmaster general out of the cabinet and placed the role under the jurisdiction of the Postal Service’s board, whose members serve on staggered terms in an attempt to limit the influence of any one president.

When Trump took office, he inherited a unique opportunity to reshape the service. The board had no presidential appointees for the first time since its formation in 1971. That was in part because Senator Bernie Sanders of Vermont had been blocking some of the proposed new members in protest over their positions on privatization of postal services.

Trump created a task force, led by Mnuchin, to review postal service finances — a decision that emerged from the agency requesting a loan backed by the federal government. As Treasury secretary, Mnuchin is head of theFederal Financing Bank, the sole lender to the postal service.

Mnuchin, who worked for 17 years atGoldman Sachs Group Inc., focused on billions in annual postal service losses. He said his goal was to protect taxpayer money.

“Being a former banker, I don’t sign any piece of paper without understanding what it is,” Mnuchin said.

Losing Billions

The USPS has been losing money for more than a decade as online commerce and communication has reduced the volume of mail and pension obligations have become an increasing financial burden. From 2007-2019, it lost a cumulative $76.5 billion.

One of the main recommendations to emerge from the task force review was to appoint new members of the Postal Service’s depleted Board of Governors.

Before agreeing to $10 billion in taxpayer-backed loans, Mnuchin said he wanted details.

“We were never looking to take over operations,” he said. “I can assure you: Anytime the Treasury does something, we would never do anything we think is illegal.”

Mnuchin has said that he wasn’t involved in choosing DeJoy as postmaster general, a claim many Democrats have made because of DeJoy’s role as a Republican donor. Mnuchin says he was surprised when he heard that DeJoy was under consideration, and that he informed Trump.

The board selects the postmaster general and, in conjunction with the postal chief, appoints the deputy postmaster, which brings the full board to 11 members.

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