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In her time as former President Donald Trump's Transportation Secretary, Elaine Chao repeatedly used her position and agency staff to help family members that run a shipping business with ties to China, in potential violation of federal ethics laws, according to an inspector general report.

The findings were uncovered in a Transportation Department's inspector general 

 released Wednesday that detailed the office's investigation into Chao's dealings as secretary.

The inspector general referred the findings to the Justice Department in December 2020. But with the Trump administration coming to a close, the DOJ declined to open its own investigation into the matter citing "there is not predication" to do so.

Chao, who is married to Sen. Mitch McConnell, announced her 

Jan 7, saying she was deeply troubled by the previous day's mob that attacked the Capitol "in a way that I simply cannot set aside." Her term was set to end at President Joe Biden's swearing-in.

The Transportation Department watchdog launched the probe into Chao's actions as secretary following news reports that detailed her interactions with family in her post as the agency's head. That included an official trip to China in 2017 in which her father and sister were set to join her and participate in high-level meetings.

But as the OIG details in its report, Chao also tasked her staff with far more than travel planning. The internal watchdog cited Chao for four kinds of ethics violations, including requiring DOT's staff to help with personal errands and with marketing her father's biography.

Chair of the House Committee on Transportation and Infrastructure Peter DeFazio of Oregon and Chair of the Committee on Oversight and Reform Carolyn B. Maloney of New York also requested an investigation into Chao following initial media reports.

Maloney on Wednesday called Chao's use of her official position and resources to help her family a "flagrant abuse of her office." The congresswoman added that lawmakers should use this report as evidence for further ethics and transparency reforms.

The OIG report doesn't offer a formal conclusion that Chao violated federal ethics laws, but did highlight several instances that deserved further scrutiny, especially in situations tied to the secretary's family, the report said.

Federal ethics laws bar employees from using their public office for private gain, which could mean publicity or favors from others. Employees must also act impartially and ensure they don't offer any preferential treatment to any private organization or person. Federal employees cannot use their public office to endorse a product, service, or company or for the private gain of friends, family, or others.

Chao is no novice when it comes to the ethics rules of being a federal agency official. She was previously the labor secretary under former President George W. Bush.

Yet during her time at Transportation, Chao's office handled matters related to her father, James Chao, who founded the shipping company Foremost Group, and her sister, Angela Chao, who runs the company.

Secretary Chao made extensive plans to include family members in events during her official trip to China in November 2017. The itinerary included stops at Shanghai Maritime University and the Shanghai Jiao Tong University, and other locations that had received support from her family's business.

Chao also requested, through the State Department, for China's Transport Ministry to arrange for two vehicles for her delegation, which included her sister and father. Officials at the State and Transportation Departments raised ethics concerns with the trip and it was ultimately canceled.

The former secretary also directed her staffers to send copies of her father's memoir, “Fearless Against the Wind,” to a well-known, unnamed CEO of a major U.S. company not regulated by her agency. She asked her staff to request he write the forward for the book.

A third staffer was also asked to edit the sample forward sent to the CEO, emails reviewed by the OIG showed. Similar requests were made to several other prominent individuals, including unnamed heads of "elite" U.S. schools, according to the report.

Transportation's public affairs office also lent support to her father to help market his biography, to keep a running list of of his awards, and to edit his Wikipedia page, the OIG report said.

Chao also tasked political appointees on her staff to contact the Department of Homeland Security regarding the status of a work permit application for a student studying at a U.S. university who was a recipient of her family's philanthropic foundation.

Chao also used agency resources and staff for small, personal tasks like checking on the repairs of an item at a store for her father or sending Christmas ornaments to her family.

In defense of her actions, Chao's office sent a memo dated Sept. 24, 2020, citing "filial piety." The memo states, "Anyone familiar with Asian culture knows it is a core value in Asian communities to express honor and filial respect toward one's parents, and this ingrained value of love, respect, and filial piety always takes precedence over self-promotion and self-aggrandizement."

It went on to say, "As the eldest daughter, she is expected to assume a leadership role in family occasions that honor her father and her late mother."

The OIG said over the years no Transportation Department employees questioned by investigators felt "ordered or coerced" to do any of the tasks asked of them by Chao.

DeFazio criticized the timing of the OIG report as it was released months after Chao already resigned.

He said Wednesday, "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. Public servants, especially those responsible for leading tens of thousands of other public servants, must know that they serve the public and not their family's private commercial interests." 

Politics and Government News

Jaclyn Diaz

Author

The Transportation Department's inspector general referred the findings to the Justice Department in December of 2020. The DOJ declined to open its own investigation into the matter.

Elaine Chao used DOT resources for personal errands, family business, IG report says

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