Elaine Chao: Used Her Cabinet Post to Help Her Family Make Millions. Report Transportation Department Support of Shipping Business.
Chao is married to Senate Republican leader Mitch McConnell from Kentucky. Most of the wealth Chao and McConnell have disclosed in their annual government ethics filings comes from her inheritance when her mother died in 2007. She received as much as $25 million from her mother, these forms indicate.
The Chao family business is deeply entangled with Beijing. The family dry-bulk ship company has borrowed 100s of millions of dollars from Chinese banks, all of which are partly or fully owned by the communist regime.
The family business grew substantially over the four years that Elaine Chao was in the Trump cabinet (growth was almost half a million dollars a day). When Chao assumed office in January 2017, it's value more than doubled, the Foremost fleet was valued at half a billion dollars ($1.18 billion was the fleet value by the time Chao left office).
According to VesselsValue, a private vessel valuation service which shared its analysis with DCReport, the Chao family fleet in January 2017 consisted of 22 vessels. After selling off some older ships and ordering new vessels, the family fleet will reach 32 vessels this summer.
Walter Shaub, the former head of the Office of Government Ethics, said Chao’s actions appeared to be a clear abuse of power. “This is the kind of thing you would use in a training class to teach government officials what a misuse of a position looks like,” Shaub said. “This conduct falls into the category of extreme rather than gray.”
The inspector general made extensive findings that have astonished ethics officials in Washington, D.C., some of whom say they’ve never seen anything like it. The report shows clearly that numerous documented Chao actions could be felonies under federal laws designed to avoid official favoritism.
List of Abuses
1. Chao planned a China trip in which she would be accompanied by her father James and sister Angela Chao, CEO of Foremost Group. Draft itineraries included book signings and appearances for her father and her family joining her in official events and high-level meetings. State Department personnel at the American embassy in Beijing were alarmed at this plan, which was a breach of well-developed protocols about mixing official duties and family business. The trip ultimately was canceled because of diplomatic staff concerns. While planning that trip, a transportation department official emailed the secretary about whether her father wanted to meet with a former classmate, thought to be former Chinese President Jiang Zemin. Arranging such a meeting would not be appropriate conduct for a government agency.
2. Various department staffers were told to provide media and public affairs support to the secretary’s father, even maintaining lists of his awards and creating a media strategy and public relations plan for him and Foremost Group. Elaine Chao had her staff, on taxpayer time, edit a chapter from a book on her father, and she directed department public affairs staffers to edit her father’s Wikipedia page. The department’s public affairs director devised and recommended a strategy “amplifying the coverage in regional [Chinese] press, a means to build Chao’s profile and to share the story of his journey.”
3. Repeatedly transportation public affairs staffers arranged media coverage and coordinated photo opportunities for Elaine Chao and her father. They arranged targeted in-depth interviews with the secretary and her father intended solely for the Chinese market. In one event where Elaine Chao was asked to speak, the former secretary first asked if they would be distributing 500 copies of her father’s biography, Fearless Against the Wind. When Elaine Chao was invited to be the keynote speaker at a maritime event, she asked the sponsors to give her father an award, evidently as a condition of participating. Once the secretary got confirmation of an award for her father, she agreed to attend. Arrangements for that event included placing a copy of her father’s book on the chair of each gala attendee.
4. Elaine Chao asked staff to act as personal assistants for her and her family, especially her father. They were instructed to organize repairs of James Chao’s personal belongings, schedule personal appointments, FedEx Christmas ornaments to him – and send the secretary and her husband McConnell a list of those ornaments – and to get autographed photos for Transportation Department files. The inspector general’s investigators interviewed transportation ethics lawyers, who revealed that “they had no record of a request to provide ethics advice” for a number of the specific events listed above. More often than not, Chao’s top staff failed to bring potential conflicts to the attention of the ethics lawyers, as required by longstanding policy.