Inspector General says Elaine Chao used office to help family

Elaine Chao

A report released by the Inspector General (IG) of the U.S. Department of Transportation says that Trump Administration Secretary of Transportation Elaine Chao used her office staff on a number of occasions to handle matters related to her father, James Chao, founder of Foremost Shipping, and her sister, Angela, who now runs the company.

A redacted version of the report is appended to a letter sent March 2 to Peter DeFazio, Chairman of the House Committee on Transportation and Infrastructure, who in late 2019 had requested that the Inspector General investigate potential conflicts of interest and favoritism involving then Secretary Chao.

Chairman DeFazio’s concerns included not only Chao’s actions in relation to her family’s shipping business but also to matters relating to allegations of steering DOT grant funds to the Commonwealth of Kentucky, the state represented by Chao’s husband, Senator Mitch McConnell, who was majority leader at the time.

There were also questions relating to Chao’s financial holdings in Vulcan Materials, a stone and asphalt producer.

“Based on our preliminary review, we concluded that there was not a sufficient basis to initiate a formal investigation into grant awards or the Secretary’s financial interest in Vulcan Materials,” says the letter. “However, we concluded that a formal investigation into potential misuses of position was warranted. We initiated our formal investigation in December 2019, and the results of that investigation have been documented in a report of investigation.”

ETHICS CONCERNS

During the course of its investigation, says that report OIG discovered evidence relating to potential ethics concerns arising from the actions of the Secretary and Office of the Secretary (OST) staff under her direction. The facts underlying potential ethics concerns include:

• tasking OST political appointees to contact the Department of Homeland Security (DHS) about the status of a work permit application submitted by a foreign student studying at a U.S. university who was a recipient of Chao family philanthropy;
• including family members and personal events in the Secretary’s planned, but subsequently cancelled, trip to China in November 2017;
• providing DOT Public Affairs and media support to the Secretary’s father; and
• using DOT resources and OST staff time for tasks for the Secretary that appear to be personal in nature.

The report, which you can download at the link below, goes into some 30 pages of extensive detail on what the investigation found in relation to these concerns.

To cite just one example, Chao directed DOT public affairs staff to provide support to her father, particularly in the marketing of his personal biography, to keep a running list of the awards her father received and edit her father’s Wikipedia page. Secretary Chao also “directed two OST staffers to send a copy of [her father’s book] to a well-known CEO of a major U.S. corporation (which is not regulated by DOT) along with a letter requesting that he write a forward for the book and a sample forward.”

The findings were referred to the U.S. Attorney’s Office for the District of Columbia on December 16, 2020, and the U.S. Department of Justice Public Integrity Section on December 17, 2020, both of which declined prosecution.

• Download the letter to Chairman DeFazio and the attached report