House committee launches investigation into Transportation Secretary Chao

The House Oversight and Reform Committee on Monday launched an investigation into Transportation Secretary Elaine Chao over whether she is using her office to benefit herself and her family.

The investigation follows a series of reports alleging that Chao used her role in the Trump administration to boost Foremost Group, a shipping company founded by her father, and initially didn’t divest from stock in a major construction company. 

“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,” Oversight and Reform Committee Chairman Elijah Cummings (D-Md.) and Rep. Raja Krishnamoorthi (D-Ill.), chairman of the Oversight and Reform Subcommittee on Economic and Consumer Policy, wrote in a letter to Chao requesting documents.

{mosads}Foremost has received hundreds of millions of dollars in loan commitments from a bank run by the Chinese government. Reports of Chao making joint public appearances and planning to travel to China to meet with government officials with her father since becoming Transportation secretary led lawmakers to investigate whether she has been using her position to further her family’s business.

A Transportation Department spokesman dismissed the “media attacks” on Chao and said the department would respond to the committee’s letter.

“The Department has received a letter seeking information on a variety of topics based on publicly available information and news coverage. We look forward to responding to the Committee’s request. Media attacks targeting the Secretary’s family are stale and only attempt to undermine her long career of public service,” the spokesman said.

The Oversight and Reform Committee requested that Chao provide by Sept. 30 all internal government communications about Foremost Group and Vulcan Materials Company; her canceled October 2017 trip to China and an official trip to China in April 2018; her annual public financial disclosure reports; and whether she has used a personal email address to communicate with her family or Foremost Group employees about official Transportation Department business.

The Transportation Department had canceled a planned October 2017 trip to China after State Department officials raised ethics concerns about including Chao’s family members in meetings with members of the Chinese government.

“Federal regulations prohibit federal employees from using their public offices for ‘the private gain of friends, relatives, or persons with whom the employee is affiliated in a nongovernmental capacity,’ ” Cummings and Krishnamoorthi wrote.

Chao, who is married to Senate Majority Leader Mitch McConnell (R-Ky.), was among the first Trump administration Cabinet secretaries to be confirmed in January 2017.

The Oversight and Reform panel also asked Chao to investigate her failure to immediately divest stock in Vulcan — one of the nation’s largest construction companies — where she served on the board of directors before becoming Transportation secretary.

Chao did not sell her Vulcan shares until June 2019, after The Wall Street Journal reported that she had yet to divest from the company despite pledging to do so.

Chao had signed an ethics agreement in 2017 stating that she would receive a “cash payout” for the stocks in case of a real or perceived conflict of interest. After Chao sold the stock, Transportation Department ethics official Judith Kaleta said in a letter to the Office of Government Ethics that the agreement “contained inadvertent misstatements of fact … based on information provided by the nominee’s accountant.”