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WASHINGTON – The House Oversight and Reform Committee asked Transport Secretary Elaine Chao on Monday to hand over documents related to communications with her family's transportation company while the committee was conducting an investigation to determine if the measures taken by Ms. Chao constituted a conflict of interest.
The request of the Democrats-controlled House committee concerns actions that Ms. Chao has undertaken that could benefit Foremost Group, a New York-based shipping company owned by her family. Foremost has received hundreds of millions of dollars in loans from a bank run by the Chinese government to help build ships that Foremost has purchased from government-owned shipyards.
Ms. Chao's actions – including her joint public appearances since she became Transportation Secretary in 2017 with her father, James Chao, who founded the company, and a planned trip to China to meet with government officials there with her father – led House investigators wonder if she uses her office to defend the financial interests of her family.
"Federal regulations prohibit federal employees from using their public offices for the" private benefit "of" friends or relatives, "said the letter sent Monday to Ms. Chao by House investigators, who quoted articles in the New York Times in June and Politico in 2018, detailing the links between Ms. Chao and her family's business. "There are several reports that you used your official position to benefit Foremost Group, a transportation company owned by your father and sisters, headquartered in New York and operating a fleet carrying materials from and to from China."
The Times investigation revealed many cases in which Ms. Chao, as Secretary of Transportation, could have improved the image of Foremost. In addition to inviting her father to the department in 2017, she also participated in a August signature ceremony at the Harvard Club in New York, attended by Foremost and the Sumitomo Group, a Japanese company whose public transit projects in the United States were under its supervision.
The letter to Ms. Chao reports on measures taken by the department to remove specific subsidy programs to assist the US marine sector. They include the cuts proposed, but rejected by Congress, in 2017 and 2018 for the maritime security program, which subsidizes US-flagged cargo ships so that they are available, as appropriate, to assist the Pentagon in shipping cargo. supplies to war zones. Cutting these subsidies could have undermined the US shipping industry even though his family's business was supported by the Chinese shipping industry.
The committee also questioned Ms. Chao about her failure in 2018 to divest her stake in Vulcan Materials Company, a manufacturer of road building materials, despite the promise made in an agreement on ethics that Ms. Chao had signed early 2017 before his confirmation. as secretary of transport.
The letter is signed by Elijah E. Cummings, Democrat of Maryland, Chair of the Committee, and Representative Raja Krishnamoorthi, Democrat of Illinois, Chair of the Subcommittee of the Committee on the Economy and Consumer Policy.
Ms. Chao said through the intermediary of a spokesperson that she had not taken any official action in favor of Foremost. All appearances with her father – including interviews with Chinese-language journalists, sometimes standing in front of the Department of Transport's flag or logo – since she became a secretary, were only events families, the spokesman said.
The agency also pointed out that, while advocating reductions in some marine subsidy programs, it had generally increased maritime spending, particularly for ships used by maritime academies.
The agency also said that Ms. Chao 's failure to sell the shares of Vulcan was an oversight that occurred when the company paid her for purchase options. shares she has gained by sitting on the Vulcan board of directors by issuing her shares in the company instead of paying her. cash. Subsequently, Ms. Chao sold the Vulcan stock after being reported, first at the Wall Street Journal, she still had financial ties with the company, although she helped oversee the construction efforts of a federal highway.
The House Oversight Committee sent Ms. Chao 18 various requests for documents and information concerning both cases, including requests for copies of communications since January 2017 between Ms. Chao or a Transport Service employee. his father or sister Angela Chao. who is now the managing director of Foremost.
The committee also requested copies by the end of this month of all documents related to a trip that Ms. Chao planned to conduct in China in October 2017. The trip was canceled after State Department officials had expressed their views. ethical concerns regarding his plan to include members of his family in meetings with Chinese government officials, as reported by the Times in June.
House investigators have sent many letters like this since the Democrats took control in 2019, asking the Trump administration to resist in many cases, giving rise to subpoenas and summonses. growing friction between House Democrats and the administration.
A spokesperson for the Oversight Committee said that this request to Ms. Chao constituted "an initial investigation by Secretary Chao on these specific issues", suggesting that it was not a matter of any kind. an issue on which the committee had already spent a lot of time investigating.
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