Oversight Launches Investigation of Ethics Allegations Against Chao

Sep 16, 2019
Press Release

Washington, D.C. (Sept. 16, 2019)—Today, Rep. Elijah E. Cummings, the Chairman of the Committee on Oversight and Reform, and Rep. Raja Krishnamoorthi, the Chairman of the Subcommittee on Economic and Consumer Policy, sent a letter requesting information and documents regarding 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.

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 Committee is also investigating your failure to divest of stock in one of the nation’s largest construction companies, Vulcan Materials Company, where you served on the Board of Directors for nearly two years immediately before becoming Secretary of Transportation,” Cummings and Krishnamoorthi wrote. 

On January 5, 2017, prior to her confirmation hearing, Chao promised to address this clear conflict of interest by entering into an ethics agreement under which she would cash out her stock holdings in Vulcan by April 2018. 

However, Chao did not sell her shares in Vulcan until June 3, 2019—after the Wall Street Journal published an article about Chao’s failure to divest from the company.  

Ten days later, on June 13, 2019, the Department sent a letter to the Office of Government Ethics admitting that Chao’s nominee Public Financial Disclosure Report, May 2018 Public Financial Disclosure Report, and ethics agreement contained what it characterized as “inadvertent misstatements of fact.” 

The Committee requested that Chao provide the requested information and documents by September 30, 2019.

Click here to read today’s letter.

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116th Congress