House opens probe into DOT boss Chao over alleged ethical violations

Transportation Secretary Elaine Chao announced Thursday she would is resigning her position in President Trump's Cabinet.

The House of Representatives’ Oversight Committee has opened an investigation into allegations that Transportation Secretary Elaine Chao has abused her power as head of the U.S. DOT.

As detailed by Overdrive in June, news reports from earlier this year contend that Chao has used her position to benefit her husband, Senate Majority Leader Mitch McConnell, and her family’s maritime shipping business, the Foremost Group. She also allegedly failed to divest shares from a holding company that receives roads contracts from the DOT. The investigation centers only on the alleged conflicts of interest with the Foremost Group and her shares of Vulcan Company, skipping the allegations regarding steering roads money toward Kentucky — Chao and McConnell’s home state.

Chao, in June and this week, refutes the allegations, arguing that the media coverage of the alleged ethical violations lack context and “implies conflicts of interest where none exist.”

In a statement provided to Overdrive on Tuesday about the House’s investigation, a DOT spokesperson said, “media attacks targeting the secretary’s family are stale and only attempt to undermine her long career of public service.”

The spokesperson said that they will respond to the committee’s request for information.

The House’s Oversight Committee points to reports from The New York Times and Politico, which detail the alleged improprieties. According to the reports, Chao used her position to arrange meetings between Chinese officials and her father and sister, who own Foremost Group, to help secure low-interest loans to purchase Chinese ships. She also appeared alongside her father at media interviews in China, the reports indicate, in which her father “boasted about his access to President Trump,” according to the House’s letter to Chao.

The reports also contend that Chao has tried to alter DOT programs that benefit U.S. maritime vessels. Such “decisions could benefit your family’s company, which owns entirely foreign-flag ships,” writes Rep. Elijah Cummings, chair of the House Oversight Committee, and Rep. Raja Krishnamoorthi, chairman of the subcommittee on economic and consumer policy.

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Relative to her stock in Vulcan, valued at more than $300,000, Chao did not divest from the company as she said she would during her confirmation process in 2017. DOT awards contracts to Vulcan, meaning that Chao could have received financial benefit from decisions as DOT Secretary. She did not divest Vulcan shares until a Wall Street Journal article published in June, the committee said.

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