The House Oversight Committee today announced that it had launched an investigation into Transportation Secretary Elaine Chao, amid allegations that she used her office to “benefit herself and her family“, including her husband, Senate Majority Leader Mitch McConnell (R-KY). In a letter to Chao today, House Oversight Chairman Elijah Cummings (D-MD) and Representative Raja Kritshnamoorthi (D-IL), who chairs the Subcommittee on Economic and Consumer Policy, wrote, according to The Hill, “The Committee is examining your misstatements of fact, your actions that may have benefitted the company in which you continued to hold shares, and your compliance with ethics and financial disclosure requirements.”
Allegations against Chao, as stated in the letter, include that she has used her office to benefit Foremost Group, a shipping company owned by her father and sisters and which has strong ties to the Chinese government, including by receiving hundreds of millions of dollars in low-interest loans from a bank run by the Chinese government, according to The New York Times. The company, headquartered in New York, operates a fleet of ships that transports goods to and from China. The allegations against Chao related to Foremost Group, per the Oversight letter to Chao, include that she used her “official position to elevate Foremost Group’s influence and status with the Chinese government”; that she appeared with her father, the founder of Foremost Group, in dozens of interviews on Chinese TV while operating in an official capacity, with her father making comments boasting of his access to President Trump because of Chao; that she had planned to bring family members involved with Foremost to official meetings with the Chinese government, plans which were thwarted when State Department ethics officials questioned them; and that in her capacity as Transportation Secretary she made decisions to reduce funding for Department of Transportation programs meant to benefit U.S.-flagged trade ships, decisions which could have benefited Foremost Group, since it uses only foreign-flagged ships.
Chao’s extremely wealthy family of origin, according to The New York Times, has also given millions of dollars, earned from Foremost Group’s business, to Chao and her husband Senate Majority Mitch McConnell (R-KY), who also may then be said to benefit from the good fortunes of Foremost Group.
Chao is also accused in the letter of failing to divest in a timely manner from her interests in one of the largest construction companies in the U.S., Vulcan Materials, and repeatedly making untrue statements regarding her plans to divest. Of course interest in a construction company is a conflict of interest for a Secretary of Transportation. Prior to her confirmation, amid concerns of that conflict of interest, Chao had indicated that she would sell off her stock in Vulcan Materials for a cash payout by April of 2018, which did not happen. Instead of cashing out as she had stated, in April of 2018 Chao’s deferred stock was exchanged for common stock in the company worth about $300,000, meaning Chao remained a stockholder, who would therefore benefit from the company doing well. In her May 2018 Financial Disclosure report, which happened after that exchange for common stock, Chao stated inaccurately that she would be getting a cash payout instead. According to the House Oversight letter, Chao did not end up selling that common stock until June of 2019, after the Wall Street Journal reported on her failure to divest from the company.
The Oversight letter to Chao requests responses to questions in the letter, as well as the documents requested, by September 30. Chao is just the latest example of a high level Trump administration official under investigation amid allegations of using their office for the financial benefit of themselves and their family members. That issue starts at the top of course, as President Trump himself refused to divest from his businesses before taking office, and has been widely accused of enriching himself through his office, including from officials, both foreign and domestic, staying at his resorts and hotels, with at least some portion of those officials appearing to be courting Trump’s favor in the process. Several lawsuits and investigations of Trump’s alleged violations of the emoluments clause of the Constitution are the result.