House investigates Chao for conflicts

WASHINGTON -- The House Oversight Committee said Monday it is investigating whether Transportation Secretary Elaine Chao acted improperly to benefit herself or her family's shipping company.

Two Democratic leaders sent Chao a letter asking her to turn over documents and communications related to the New York-based company, Foremost Group. Chao's father and sisters own the company, which transports material to and from China.

"Federal regulations prohibit federal employees from using their public offices for 'the private gain of friends, relatives or persons with whom the employee is affiliated in a non-governmental capacity,'" the lawmakers wrote in a seven-page letter to Chao.

The New York Times and Politico have reported Chao may have used her Cabinet position to benefit the company and increase its influence and status with the Chinese government. China has extended hundreds of millions of dollars in low-interest loans to the company for the purchase of foreign-flagged ships. Chao has denied wrongdoing.

Democratic Reps. Elijah Cummings of Maryland and Raja Krishnamoorthi of Illinois said they are examining Chao's statements and actions and whether she complied with ethics rules. Cummings chairs the Oversight panel, while Krishnamoorthi heads an economic and consumer policy subcommittee.

A Transportation Department spokesman said Monday the department has received a letter seeking information on a variety of topics based on publicly available information and news coverage.

"We look forward to responding to the committee's request," said spokesman Stephen Bradford. "Media attacks targeting the secretary's family are stale and only attempt to undermine her long career of public service."

The committee also asked Chao about her failure to sell off holdings in Vulcan Materials Co., one of the nation's largest construction companies, despite promising to do so before being confirmed as transportation secretary in 2017.

"Vulcan's annual revenue depends heavily on infrastructure funding allocated by DOT," the lawmakers said in their letter to Chao. The transportation chief did not sell her shares in Vulcan until June 2019, after the Wall Street Journal published an article about her failure to divest, the lawmakers said.

The department has said Chao's failure to sell the Vulcan stock was an oversight occurring when the company paid her stock options she earned while serving on the Vulcan board.

The Oversight panel cited reports Chao appeared alongside her father, James Chao, the founder of Foremost Group, in at least a dozen Chinese media interviews, many of which featured the Transportation Department's official seal. Chao's father touted her influence within the U.S. government and boasted about his access to President Donald Trump on Air Force One, the lawmakers said.

Chao and her husband, Senate Majority Leader Mitch McConnell, R-Ky., have received millions of dollars in gifts from James Chao, according to federal disclosures. McConnell also has received more than $1 million in campaign contributions from Chao's extended family, including her father and sister, Angela, now the company's CEO, the Times reported.