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Congressman Peter DeFazio

Representing the 4th District of OREGON

Chair DeFazio Urges DOT IG to Investigate Reports of Secretary Chao’s Conflicts of Interest

Oct 15, 2019
Press Release

Washington, DCLate last week, Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR) sent a letter to U.S. Department of Transportation (DOT) Inspector General Calvin L. Scovel III requesting an investigation into Secretary Elaine Chao and her reported conflicts of interest. The letter cites newly-obtained information from a recent media report that suggested Secretary Chao used her office to give preferential treatment to organizations and projects in Kentucky, where her husband, Senate Majority Leader Mitch McConnell, is currently seeking re-election.

“Politico reported that 25 percent of Secretary Chao’s meetings with local officials between January 2017 and March 2018 were with individuals from Kentucky, the same state her husband, Senate Majority Leader Mitch McConnell, represents in the U.S. Senate.   The report noted that requests for meetings with Secretary Chao are typically forwarded from Senator McConnell’s office to Secretary Chao’s Chief of Staff, who previously worked on Senator McConnell’s Senate campaign,” DeFazio wrote.

The letter goes on to detail several other instances of alleged conflicts of interest including Secretary Chaos’s actions related to her family’s shipping business. A full copy of the letter can be found below.

 

                                                            October 11, 2019

Calvin L. Scovel III

Inspector General

Office of Inspector General

United States Department of Transportation

1200 New Jersey Avenue SE

Washington, D.C. 20590

Dear Inspector General Scovel:

I am concerned about recent press reports regarding potential conflicts of interest involving Secretary Elaine Chao. 

Earlier this week, Politico reported that 25 percent of Secretary Chao’s meetings with local officials between January 2017 and March 2018 were with individuals from Kentucky, the same state her husband, Senate Majority Leader Mitch McConnell, represents in the U.S. Senate.   The report noted that requests for meetings with Secretary Chao are typically forwarded from Senator McConnell’s office to Secretary Chao’s Chief of Staff, who previously worked on Senator McConnell’s Senate campaign.  

This news followed an earlier report that Secretary Chao had asked her Chief of Staff to serve as an intermediary between her office and Senator McConnell’s office, and that he had helped advise the senator and local Kentucky officials on federal grants of particular significance to Senator McConnell.  Allegations included the steering of discretionary grants to fund these projects.  I would expect Secretary Chao to meet with individuals from her home state more regularly than other states, but the sheer volume of meetings with local officials from Kentucky when compared to meetings with local officials from the rest of the country creates an appearance of favoritism that is troubling.  Even more troubling is the fact that Senator McConnell’s campaign touted the Politico article on social media saying, “Mitch McConnell is a Kentucky Asset.”

News reports have also raised questions regarding Secretary Chao’s actions relating to her family’s shipping business. Earlier this year, it was reported that Secretary Chao attended a 2017 contract-signing ceremony involving the Foremost Group, a shipping company founded by her father and at which her sister serves as chief executive, and Sumitomo Group of Japan, who was subject to Department of Transportation oversight.  The same report noted that Secretary Chao canceled a planned trip to China in 2017 after officials at the American embassy in Beijing raised ethical concerns when the Secretary’s office asked to have family members from the Foremost Group participate in official events. 

Additionally, news reports have also raised questions about Secretary Chao’s adherence to her federal ethics agreement in which she agreed to divest certain assets to prevent her personal finances from creating conflicts of interest.  In particular, it has been reported that the Secretary retained stock in Vulcan Materials, a stone and asphalt producer, as opposed to accepting a cash payment for her stock options in the company, as provided for in her ethics agreement.

I respectfully request that you investigate these matters and report back to this committee on your findings.  Any questions regarding this request should be directed to Douglas Pasternak, Director of Investigations and Oversight for the Majority at (202) 226-3357.

Thank you for your assistance in this matter.                                      

Sincerely,

PETER A. DeFAZIO            

Chair   

cc: SAM GRAVES, Ranking Member

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