IG report raises Chao/McConnell conflict questions, stirs Democrats

FRANKFORT, Ky. (NPR/WTVQ) – A report late Wednesday by National Public Radio and other news outlets raised possible conflicts of interest and other questions involving former Secretary of Transportation Elaine Chao, the wife of long-time Kentucky U.S. Sen. Mitch McConnell.

The issues come from and suggests she may have illegally used her position to benefit herself, her family and her family’s business in her official capacity.

The behavior was so bad, an inspector general investigating Chao forwarded their findings to the Department of Justice for criminal prosecution.

The reports prompted questions from state Democrats, who said it again focuses a spotlight on what the family, especially McConnel knew and when.

Previously, Chao and McConnell have denied any involvement with her family’s business, the Foremost Group, including as recently as July 2020, when pressed about why that business received a PPP loan.

Specifically, a Chao spokesperson told the Courier-Journal she had “no connection to the business.” McConnell said the same thing on July 8, 2020, the state Democratic Party charged, which urged McConnell to answer questions, including whether he spoke to anyone at the Trump White House, Department of Justice or a U.S. Attorney about the investigation.

Democrats also questioned whether McConnell intervened on behalf of the PPE loan to the Foremost Group “when so many Kentucky businesses were not able to secure a loan.”


In her time as former President Donald Trump’s transportation secretary, Elaine Chao repeatedly used her position and agency staff to help family members who run a shipping business with ties to China, in potential violation of federal ethics laws, according to an Office of Inspector General report.

The findings were uncovered in the Transportation Department’s inspector general report 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, citing “there is not predication” to do so.

Chao, who is married to Sen. Mitch McConnell, R-Ky., announced her resignation Jan. 7, saying she was deeply troubled by the previous day’s mob attack on the Capitol “in a way that I simply cannot set aside.” Her term was set to end at President 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.

Chairman of the House Committee on Transportation and Infrastructure Peter DeFazio of Oregon and Chairwoman 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.

In a statement, a spokesperson for Chao said the report “exonerates the Secretary from baseless accusations and closes the book on an election-year effort to impugn her history-making career as the first Asian American woman appointed to a President’s Cabinet and her outstanding record as the longest tenured Cabinet member since World War II.”

Ethics questions

The OIG report doesn’t offer a formal conclusion that Chao violated federal ethics laws, but it 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 the Department of 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.

Chao cites “filial piety”

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 that he write the foreword for the book.

A third staffer was asked to edit the sample foreword 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 such as 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 that 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 nearly two months after Chao 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.”

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