Potential conflicts of interest
As Secretary of Transportation, Chao appeared in at least a dozen interviews with her father, James, a shipping magnate with extensive business interests in China.[69] Ethics experts said the appearances raised ethical concerns, as public officials are prohibited from using their office to profit others or themselves.[69] Federal disclosures cited by The New York Times revealed a gift to Chao and her husband Mitch McConnell from Chao's businessman father James, valued at between US$5 million and $25 million.[70] The company her father founded (and which her sister, Angela, currently runs), The Foremost Group, has extensive ties to the Chinese state and Chinese elites.[70] It obtained hundreds of millions of dollars worth of loans from a bank owned by the Chinese state, has substantial interests tied to a major shipyard funded by and long-term contracts with a steel producer owned by the Chinese state. In what The Times described as "a rarity for foreigners", Angela and James Chao have served on the boards of a Chinese state-owned shipbuilder, and Angela has been on the board of the Bank of China, as well as the China Council for the Promotion of International Trade (which was created by the government of China).[70]
From January 2018 to April 2019, 72% of the total tonnage shipped by Foremost was shipped to and from China. The Foremost Group has almost no footprint in the United States other than its headquarters in New York.[70] During the period when Chao appeared with her father at promotional events for the family company, the US Department of Transportation repeatedly sought to cut funding and loan guarantees for domestic American shipping companies, shipyards, and shipbuilders. These proposed budget cuts were rejected by Congress in a bipartisan fashion.[70] Chao's Department also sought for three years to prevent funding for a program that supports the viability of small domestic US shipyards, and a separate program that issues loan guarantees for the construction or reconstruction of ships with American registration.[70]
Chao pledged in 2017 to sell the stock she had earned while she was on the board of directors of Vulcan Materials, one of the largest suppliers of road-paving materials in the United States,[71][72] by April 2018.[71][73] After the Wall Street Journal and other major news outlets reported in late May 2019 that she was still holding the stock, worth $250,000 to $500,000, she sold it on June 3, 2019,[73][72] for a gain of $50,000 since April 2018.[73]
In June 2019, Politico reported that in 2017 Chao had designated her aide Todd Inman as a special liaison "to help with grant applications and other priorities" for Transportation Department projects in the state of Kentucky, the only state to have such a liaison. Inman was to act as an intermediary between the Department, local Kentucky officials, and Kentucky Senator Mitch McConnell, who is Chao's husband. This resulted in grants of at least $78 million for projects in Mitch McConnell strongholds Boone County and Owensboro. Inman had worked on the 2008 and 2014 re-election campaigns of McConnell; McConnell and local officials brought up the grants when he announced in Owensboro in December 2018 that he was running for re-election in 2020. Inman later became Chao's chief of staff.[74]
In September 2019, the Democratic-controlled House of Representatives Committee on Oversight and Reform began an investigation into whether she used political office to benefit her family's business interests.[75][76] A September 16 letter from the Oversight committee to Chao documented allegations that the Department of Transportation was forced to cancel a trip to China in 2017 that Chao had planned to take because State Department ethics officials challenged her attempts to include her family members in official meetings with the Chinese government.[77]
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And I hope Democrats start study groups where they watch and rewatch his appearances so they can learn how to frame the message.
