Ethics questions about President Trump's transportation secretary surface for second week in a row

A State Department official said Elaine Chao's requests for her first trip to China were "alarmingly inappropriate"

By Matthew Rozsa

Staff Writer

Published June 3, 2019 11:41AM (EDT)

Transportation Secretary Elaine Chao (AP/Jose Luis Magana)
Transportation Secretary Elaine Chao (AP/Jose Luis Magana)

For a second week in a row, President Donald Trump's transportation secretary faces scrutiny over her ethics while in office.

In 2017, Secretary of Transportation Elaine Chao made a series of requests involving her first visit to China as an official member of Trump's Cabinet, which raised alarms among federal officials concerned with ethics. Her requests, revealed by the New York Times, included having her relatives in meetings with government officials and having those federal officials coordinate travel arrangements for at least one of her family members.

After ethics questions were referred to officials in the State and Treasury Departments, and media outlets like Times began to look into Chao's unusual travel requests, the trip was cancelled.

"She had these relatives who were fairly wealthy and connected to the shipping industry. Their business interests were potentially affected by meetings," a State Department official, who was involved in deliberations pertaining to the meetings, told the Times. Another State Department official, David Rank, told the Times the requests were "alarmingly inappropriate."

Chao's family runs an American shipping company, the Foremost Group, which is connected to China's political and economic ruling class, since it conducts most of its business there. As a result, allowing family members to participate in sensitive meetings — especially considering that Chao's actions as transportation secretary could directly impact America's shipping industry, and goes to the heart of the U.S.-China trade policies being handled by the Trump administration — poses a major conflict of interest.

As the Times explained:

Ms. Chao has no formal affiliation or stake in her family’s shipping business, Foremost Group. But she and her husband, Senator Mitch McConnell of Kentucky, have received millions of dollars in gifts from her father, James, who ran the company until last year. And Mr. McConnell’s re-election campaigns have received more than $1 million in contributions from Ms. Chao’s extended family, including from her father and her sister Angela, now Foremost’s chief executive, who were both subjects of the State Department’s ethics question.

The Times also noted that Chao's father James and sister Angela "have served on the board of the holding company for China State Shipbuilding, a state-owned enterprise that makes ships for the Chinese military, along with Foremost and other customers. Angela Chao is also on the board at the Bank of China, a top lender to the shipbuilder, and a former vice chairman of the Council of China’s Foreign Trade, a promotional group created by the Chinese government."

This is not the only ethics-related controversy to plague Chao. Last week, it was revealed that she never divested herself from stock in a construction-materials company, despite promising an ethics official she would do so.

"Upon confirmation, I will resign from my position with Vulcan Materials. I hold vested deferred stock units with Vulcan Materials. I do not hold any unvested deferred stock units, stock options, restricted stock or common stock," Chao had written in a letter to the Treasury Department's designated ethics official prior to being confirmed.

By Matthew Rozsa

Matthew Rozsa is a staff writer at Salon. He received a Master's Degree in History from Rutgers-Newark in 2012 and was awarded a science journalism fellowship from the Metcalf Institute in 2022.

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