The White House on Friday, confirming a Washington Post report on the decision, announced it would nominate Daniel Tangherlini, who served as the administrator of the General Services Administration during the Obama administration, to replace Ron A. Bloom.
Derek Kan, a Republican and the former deputy director of the Office of Management and Budget, would replace Republican John M. Barger.
“We are, of course, deeply troubled, continue to be deeply troubled — as many Americans are — by the earlier reporting on Postmaster General DeJoy’s potential financial conflicts of interest and take serious issues with the job he’s doing running the Postal Service,” White House press secretary Jen Psaki said later Friday during a press briefing. “It’s up to the board to make a determination about leadership, but we have continued concerns about the postmaster general’s leadership.”
The nine-member board now is composed of four Democrats, four Republicans and one independent, of whom Biden appointed three. The rest were appointed by former president Donald Trump.
Bloom, a Democrat, has backed the postmaster general as the agency permanently lowered mail delivery standards and raised prices. DeJoy was hired after then-Treasury Secretary Steven Mnuchin threatened to withhold key funds from the Postal Service unless the Trump administration could take over wide decision-making authority at the mail agency.
The unorthodox — and to some experts, legally questionable — proposition set off alarms for Democrats, who saw DeJoy’s appointment as an act of political patronage. DeJoy, a former logistics executive, was the finance chair for the 2020 Republican National Convention, a role he relinquished after he was hired by the Postal Service, and had hosted a Trump fundraiser at his North Carolina mansion in 2017.
Within weeks of taking office in June 2020, DeJoy implemented protocols at processing facilities that substantially slowed mail delivery as part of a larger strategy to rein in the agency’s massive financial liabilities. The ensuing letter and package backlogs stretched into the holiday season when, as coronavirus infections sidelined a significant chunk of the postal workforce, on-time rates for nonlocal mail dropped to 38 percent — a historic low.
But Democrats and voting rights advocates saw the changes as an attempt to hamper the agency in the run up to the 2020 presidential election, which would be heavily reliant on mailed ballots because of the coronavirus pandemic. DeJoy has repeatedly denied any such motivation.
In June, his fundraising activities drew FBI scrutiny after employees at his former company, New Breed Logistics, told The Post they were pressured to donate to Republican candidates, then reimbursed with bonuses. DeJoy’s spokesman has said the postal chief “never knowingly” violated campaign finance laws.
DeJoy’s financial relationship with Bloom also raised eyebrows: From October 2020 to this past April, he purchased up to $305,000 in bonds from the asset management firm where Bloom is a senior executive.
Postal ethics officials have cleared the transaction, and Bloom has told The Washington Post that he receives “no benefit whatsoever” when bonds issued by his company, Brookfield Asset Management, are bought or sold.
Opposition from Democrats and some union groups marked the growing rift between the party and Bloom, who was an economic adviser in the Obama administration and played key roles in the bailouts of Chrysler and General Motors during the Great Recession.
The two architects of a bipartisan postal financial overhaul bill, Reps. Carolyn B. Maloney (D-N.Y.) and Gerald E. Connolly (D-Va.), along with Rep. Bill Pascrell Jr. (D-N.J.), asked Biden to replace Bloom in a letter sent last month.
“The bottom line is that Mr. Bloom has not held [DeJoy] accountable for record low performance and has enabled operational standards that have and will continue to cripple the Postal Service,” according to a copy of the letter obtained by The Post.
At least two Senate Democrats, Chris Van Hollen (Md.) and Jon Tester (Mont.), cited ethics concerns in communications with the White House about Bloom’s renomination, according to representatives from their offices.
Four others — Kirsten Gillibrand (D-N.Y.), Jeff Merkley (D-Ore.), Tammy Baldwin (D-Wis.) and Bernie Sanders (I-Vt.) — called Bloom’s support of DeJoy grounds for his replacement. “During a time when Americans have relied on the Postal Service for prescriptions, benefits and voting, DeJoy has slashed service hours, arbitrarily removed mail processing equipment and caused unprecedented and widespread delays,” Gillibrand said in a statement.
DeJoy has had a string of recent successes. The Postal Service weathered the November election season well, voting rights experts say, and on-time delivery rates have improved, though against a slower standard. But the agency’s finances remain in turbulent territory. The agency has more than $206 billion in liabilities and debt, up more than $30 billion from when DeJoy started.
In May, both the House and Senate advanced bipartisan bills to overhaul the Postal Service’s finances and relieve some of its debt burden, but progress on the legislation has largely stalled.
Postal Service spokesman David Partenheimer congratulated Kan and Tangherlini on their nominations, and thanked Bloom and Barger “for their contributions to the development of the Postal Service’s Delivering for America” plan, DeJoy’s vision for cutting costs at the mail agency.
Bloom and Barger did not respond to requests for comment.
Biden’s decision came as a surprise to the postal industry and policymakers in Washington. Bloom as recently as last week told confidants he expected to be renominated, one person familiar with his conversations said. Last week, Trump appointees on the governing board reelected him as chairman over the objections of Biden appointees.
Bloom also had the support of the National Association of Letter Carriers, the Postal Service’s largest union, which retained Bloom as a paid consultant from 2011 to 2013. In 2020, he was lauded by postal and voting rights experts for work on the Postal Service’s handling of 2020 election ballots and for securing emergency pandemic funding from Congress.
Bloom told The Post in an October email exchange that he was most proud of how the agency handled the surge in mail-in balloting during the 2020 election, building support for DeJoy’s “Delivering for America” plan, and its recent effort to restore timely delivery service. He pushed through a vote on the plan in March just before three Biden appointees opposed to the program could be confirmed by the Senate.
Postal policies are walled off from Congress and the president to insulate mail service from political tinkering, according to postal historians. The most direct line to political control of the agency is through its nine-member governing board, which hires and evaluates the postmaster general.
Board members are nominated by the president and confirmed by the Senate. They serve staggered seven-year terms that matriculate regardless of whether the seat on the board is occupied. No more than five members may belong to the same party. Biden appointed three governors — two Democrats and one independent — in February.