DOT watchdog faults Elaine Chao in ethics probe

Former Transportation Secretary Elaine Chao inappropriately used her office to benefit her family, including extensive planning to include relatives on an official trip to China and requiring her public affairs staff help market a book written by her father, the agency’s watchdog has found.

A DOT inspector general report, released Wednesday by House lawmakers, showed that Chao had made extensive plans to include family members in stops she planned to make on a trip to China in 2017, including visits to Shanghai Maritime University and the Shanghai Jiao Tong University, both of which received funding from her family’s charitable foundation. The ethics questions about the trip, which ultimately was canceled, were first raised by The New York Times.

It also found that Chao told DOT public affairs staff to help her father, a New York City-based shipping magnate, with marketing for his book, along with developing — and in some ways helping to implement — a media strategy surrounding his work. Chao also directed her staff to help arrange a book signing as part of the China trip, and they were involved in curating a list of his awards, as well as helping edit his Wikipedia page, the report says.

Chao did agree to refrain from scheduling media events involving her family without consulting with DOT’s ethics office. This occurred after POLITICO reported on her media appearances with her father in which she promoted his personal story, his shipping business and his book.

She also asked her staff to inquire about the status of a work permit application for a foreign student studying at a U.S. university who had received an award from her family’s philanthropic foundation, the inspector general found. And the report shows that Chao additionally used DOT resources and staff for personal tasks, such as checking on repairs at a store for her father and having them send Christmas ornaments to her family.

Investigators from the IG’s office referred their findings to the Justice Department’s U.S. Attorney’s Office and its Public Integrity Section in December, but both offices declined to open criminal investigations.

Chao could not immediately be reached for comment through the Hudson Institute think tank, where she is a fellow.

“While I commend the Department of Transportation’s Office of Inspector General for conducting this review, I am disappointed that it was not completed and released while Secretary Chao was still in office,” said House Transportation Chair Peter DeFazio (D-Ore.), one of two lawmakers who requested the investigation. “I am even more disappointed that the Department of Justice declined to further pursue the matters that the IG’s office substantiated in its investigation.”

The inspector general didn’t find evidence to back up other allegations of misconduct by Chao. Those include several raised by POLITICO’s reporting that involved DOT’s funneling of discretionary grant money inordinately to Kentucky, the state represented by her husband, Senate Minority Leader Mitch McConnell.

The inspector general also looked at the frequency of meetings Chao and her top officials had with Kentucky officials but said there is “no standard by which to judge whether the number of meetings from one’s home state is so excessive as to raise ethical issues.” The IG also found no “irregularities” in the department’s grant awards to Kentucky, though it noted ongoing criticisms of the lack of transparency in DOT’s grantmaking process.

The inspector general’s office had already opened a preliminary review of Chao’s potential misuses of her office before being asked by the committee. The office decided there wasn’t enough evidence to warrant a formal investigation into grant awards or Chao’s financial interest in Vulcan Materials but moved forward with a formal investigation into “potential misuses of position.”


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