Secretary of Transportation Elaine Chao’s family ties to New York-headquartered bulk shipping operator Foremost Maritime Group are central to questions being asked in a letter sent her today by Rep. Elijah E. Cummings, the Chairman of the House Committee on Oversight and Reform, and Rep. Raja Krishnamoorthi, the Chairman of the Subcommittee on Economic and Consumer Policy.
The letter requests information and documents regarding what they call “troubling questions about whether Secretary of Transportation Elaine Chao is using her office to benefit herself and her family.”
“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,” Cummings and Krishnamoorthi wrote.
According to a committee press release “several reports indicate that Chao has used her official position to benefit Foremost Group, a shipping company owned by her father and sisters, and to increase its influence and status with the Chinese government, which has extended hundreds of millions of dollars in low-interest loans to the company for the purchase of foreign-flagged ships.
“Chao reportedly appeared alongside her father, the founder of Foremost Group, in at least a dozen Chinese media interviews—many of which were behind the official seal of the Department of Transportation. Chao’s father touted her influence within the United States government and boasted about his access to President Trump on Air Force One.”
The letter says that questions have also been raised about Chao’s “involvement in the decisions to deprioritize or reduce funding for DOT programs that benefit U.S.-flagged vessels in the foreign trade, decisions that could benefit your family’s company, which owns entirely foreign-flag ships.
“For example, in its budget requests for fiscal years 2018 and 2019, DOT requested that Congress cut more than $80 million from the Maritime Security Program. “ This program is vital to retaining the 60 U.S.-flagged ships enrolled in the program by providing annual stipends in exchange for guaranteed U.S. military access to the ships for sealift capacity.
“DOT also failed to enforce the requirements of the Cargo Preference Program, which requires the use of U.S.flagged ships for a portion of federally-funded cargo
“DOT’s 2018 and 2019 budget requests also sought to cut millions of dollars in funding for federal grants and loan guarantees to domestic shipyards and shipbuilders.
“Given the decline in the number of U.S.-flagged vessels in foreign trade, DOT’s approach to these programs may threaten national security by increasing the likelihood that our military will be dependent on foreign-flagged vessels during times of war or emergency.”
The committee is also asking questions about Secretary Chao’s failure to divest stock in construction company Vulcan Materials Company, where she served on the Board of Directors for nearly two years immediately before becoming Secretary of Transportation.
The Committee requested that Chao provide the requested information and documents by September 30, 2019.
Download the letter HERE