Reporters: To understand why USPS's explanation about DeJoy's conflicts of interest doesn't add up, you need a crash course in a concept related to the conflict of interest law, 18 U.S.C. § 208. Here it is.

(to save space I call the conflict of interest law the "COI law")

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The COI law bars an employee from (among other things) participating in a "particular matter" affecting the financial interests of a company whose stock he/she holds.

"Particular matter" is a term of art defined in OGE's regulations. Not every matter is a particular matter. /2

A "particular matter" is a matter that focuses on the interests of a discrete and identifiable class of persons or identified parties.

An example of a discrete and identifiable class of persons is an "industry." A matter focused on the drug industry is a "particular matter." /3

The COI law applies only if a matter is a "particular matter."

The COI law would not apply an OSHA regulation applicable to all employers in the country. That regulation is not a particular matter because it doesn't focus on on a discrete and identifiable class of persons. /4

This OSHA regulation would a "matter," as shown in the top row of the diagram below,. It's not covered by the COI law.

But a regulation focused on drug manufacturers would be a particular matter because drug manufacturers are a discrete & identifiable class. COI law applies. /5

So the COI law applies to both the blue and the red row, but not the white row. So what's the difference between the red and blue rows? Well, the diagram is a triangle because the narrowest matters are at the bottom and the broadest matters are at the top. /6

The white's a broad matter that doesn't focus on either a discrete & identifiable class or parties.

The blue's narrower. It's a particular matter focused on the interests of a discrete & identifiable class.

The red's an extremely narrow particular matter focused on parties.

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We call a matter focused on a discrete and identifiable class a "particular matter of general applicability." See the blue row. Let's call that PMGA.

We call a matter focused on parties a "particular matter involving specific parties." See the red row. Let's call that PMISP.
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Remember that PMGA and PMISP are BOTH covered by the COI law (while a mere "matter" is not).

But..... here's the problem. Sometimes people forget to consider PMGA and think only about PMISP being covered by the COI law. (Or they hope YOU'LL forget about PMGA.)

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PMISP examples include a contract, a lawsuit, a grant, an application, a license.

PMGA examples include policy, regulation, establishment of criteria, change of processes, etc., affecting a discrete and identifiable class of persons.

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DeJoy has $30 million in a supply chain logistics contractor for USPS called XPO. It's shocking. USPS is quoted in the article below as saying that "No issues relating to XPO's Postal Service contracts have been presented to Postmaster General DeJoy." /11 https://www.cnn.com/2020/08/12/politics/postal-service-dejoy-conflicts-amazon-trades-xpo-stake/index.html

But maybe you see the problem with this response. USPS is focused only on the PMISP (particular matter involving specific parties), the contract with XPO. It has not addressed the PMGA (particular matters of general applicability) in blue. The COI law also covers the PMGA. /12

DeJoy's implementing sweeping changes at USPS that are causing a major backlog. If those changes are focused on the processes of USPS supply chain logistics contractors (and how could they not?), which are a discrete & identifiable class of persons, that's a particular matter./13

If he pushes more work to, or takes work away from, USPS contractors, that's a particular matter. If he sets new criteria for contracting, or for evaluating contracts, that's a particular matter. There are lots of potential PMGA here. /14

It's inconceivable that a Postmaster General could be allowed to keep a $30 million stake in a USPS contractor. Bill Clinton's Postmaster General got in trouble just for holding Coca-Cola stock because that company supplied USPS break rooms. /15 https://www.washingtonpost.com/archive/politics/1997/10/31/runyon-to-pay-27550-settling-conflict-of-interest-case/a20e0d0e-bfd3-4cbf-aef0-152468877eea/

There's no comparison between break room soda machines and a major supply chain logistics contractor of the USPS. This is positively insane!

There's one more thing you need to know. The COI law prohibits *participation* in a particular matter, not just decisions.
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That's important because USPS seems to be saying he doesn't make decisions in these matters. But the COI law applies to any participation through "decision, approval, disapproval, recommendation, the rendering of advice, investigation, or otherwise" /17
https://www.law.cornell.edu/uscode/text/18/208

It's a problem that DeJoy has kept this massive investment in XPO.

He has kept an interest in Amazon too. He sold Amazon stocks on June 24, but that same day he bought a call option for Amazon stocks. Both the stock and the option are the same for purposes of the COI law. /18

The sale of the stock was pointless. He retained a full conflict of interest in Amazon. What's more, the stock option purchase was odd because he appears to have paid about $800 per share for an in-the-money call option. The strike price was far below the stock price. /19

Something strange is going on there, and it may create an incentive or, at least, an opportunity for insider trading. If the Trump administration does anything to hurt the value of Amazon's stock, he could sell the option before the public knows about it. /20

Also weird is the timing of the option, which expires a little over two weeks before the election. What is he up to? /21

Anyway, hope this explanation helps.