The Corruption Blog  digs into the details of the all-encompassing corruption of the Trump administration. 

Post # 19 The Corruption of Elaine Chao 

By Sean Gray

August 4, , 2020

United States Transportation Secretary, Elaine Chao is responsible for much of the commerce and movement that takes place over federal jurisdiction. Her department oversees 55,000 employees spread out between 11 agencies focused on the nation’s comings and goings by land, air and sea. She is also a long entrenched bureaucrat, having served in each Republican Administration dating back to Ronald Regan. Chao has been married to Kentucky Senator, Mitch McConnell since 1993.

Addressing the nation’s crumbling infrastructure was a persistent talking point of Donald Trump’s 2016 campaign. A 2018 study using the Federal Highway Administration’s own data showed near 10% of the nation’s bridges in need of repair. So far, Trump has failed on his promise of creating a ‘’$550 billion fund for infrastructure and development.’’ Americans cross said faulty bridges an average of 174 million times a day. The closures, and subsequent delays they cause cost the trucking industry alone, $60 billion in lost fuel in productivity. Chao cannot be held responsible for her boss’ failure to deliver on a promise. But with the nation’s infrastructure still badly in need of repair, Chao has spent much of her time in office acting primarily on behalf of  the interest of herself, her husband and family in mind.

The Department of Transportation has ordinarily provided access to its Secretary’s work schedule. Chao was not so forthcoming upon taking office. A Freedom of Information Act request secured in 2018 revealed that in her first year on the job, Chao had almost seven full weeks of  her schedule redacted as ‘’private’’. The hours in question were limited to weekdays between 9AM and 6PM. Several former department officials quoted in a Politico article described the circumstances as atypical. Administration officials described the redactions as security-related, but they warrant further scrutiny. For example, Donald Trump revealed his $1.5 trillion infrastructure plan in March of 2018. It was largely illusory, expecting to shift cost burdens to individual states and represent a windfall for private investors. In the work-week preceding the announcement, which had major implications for the DOT, Chao had 11 hours on her calendar set aside for private meetings. Chao’s scheduling opacity begs the question whether the American taxpayer is regularly getting a full day’s work from her. And worse than that, what she is doing in work hours hidden from the public. And for what reason has she attempted to obscure such a significant portion of her professional activity.

As mentioned above, Chao is married to Senate Majority Leader McConnell. Her father is James Chao, founder of Foremost Group. Foremost is a nominally American shipping company, which does most of its business in China and sails under the flags of Liberia and Hong Kong. Its presence in the US is minimal, with only a small, unlisted headquarters in Manhattan. As a result, it falls under the regulatory purview of the US Maritime Administration, regulated by the DOT. This triad has long been involved in reciprocal self-dealing on the taxpayer’s dime.

Federal officials are not permitted to use their office to promote one business over another,  particularly a family business. While Elaine Chao holds no formal stake in Foremost Group, she and her husband were the recipients of a gift valued between $5-$25 million from James Chao, according to their federal disclosures. The ethics ban on endorsing products or businesses did not deter Elaine from appearing in Chinese language interviews with her father promoting him and his shipping company. In one such interview, the DOT flag appeared behind the two as they spoke.

By all accounts, the American shipping industry is in serious trouble. China has largely usurped the US in this realm. Chao’s family business has benefited greatly from this trend and is bolstered by deep ties to political and economic elites in China. As the head Secretary of Transportation, closing the gap between the two nations should be a priority of Chao’s. Instead, and at the same time she was appearing at events promoting Foremost, Chao attempted to further imperil US maritime shipping. Her department’s budget has repeatedly tried to cut grants for small domestic shipyards and loan guarantees for US shipbuilders. The DOT has also attempted to slash a program which would keep 60 American-flagged ships in service. In contrast, her family has paid for scholarships and a ship simulator in China to train seamen.

Mitch McConnell has increased his net-worth ten-fold in his 36 years in the Senate. The Chao family played no small part in enriching him, and keeping him in power. McConnell has seen over $1 million dollars in campaign contributions from the Chao family. He faces reelection in the upcoming 2020 election. His dutiful wife proved willing to assist in his bid. Chao’s aide, Todd Inman, was asked to help Kentucky secure grants for federal projects. No other state enjoys such an ease of access. Beginning in 2017 Chao and Inman began meeting with a delegation from Owensboro, KY to discuss two highway improvement projects McConnell saw as key to his reelection effort. The projects had twice been rejected for grant applications. Through the efforts of Chao and Inman, Kentucky was approved for $78 million in federal money to upgrade critical infrastructure. In the interest of full disclosure, Kentucky ranks 26th in population and 25th in DOT money. Nevertheless, the timing hardly seems coincidental, particularly considering McConnell’s effusive pride in allocating federal resources to his home state.

Like all Federal Departments, the Department of Transportation has an Inspector General to conduct oversight and investigate malfeasance. The DOT’s previous IG had been Mitch Belm, who was not a political appointee. In an all too common occurrence in the last four years, he was removed by the Trump administration when he began investigating whether Chao was showing preferential treatment towards Kentucky-based projects. He was replaced in the role by Howard ‘’Skip’’ Elliot. Elliot had previously been an interim IG while simultaneously heading the department’s agency responsible for pipelines and hazardous wastes. In the latter role he was a subordinate of Elaine Chao’s. It also means that he’s now responsible for investigating the potential fraud and waste of himself and his former boss.

US infrastructure needs improvement. It is perhaps the subject least likely to raise ire in political debate in Washington. The Department of Transportation appears seriously dysfunctional. Not all the blame can be laid at the feet of Elaine Chao. But her ethical lapses and lack of transparency have compounded the dysfunction, and invite

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