A nonprofit publication of the Kentucky Center for Public Service Journalism

Bill Straub: Questions surrounding Sec. Chao not surprising, considering the company she keeps

WASHINGTON – The family that grifts together sticks together.

Transportation Secretary Elaine Chao, ostensibly a resident of Louisville even though she shows up about as frequently as the visiting team at Slugger Field, has been in the news lately, and not in a particularly flattering way.

Apparently she’s taking lessons on how to soil her vaunted office from her husband of long standing, Senate Republican Leader Mitch “Root-‘n-Branch’’ McConnell, the king high muckety-muck of destroying whatever remains of American-style democracy.

U.S. Secretary of Transportation Elaine L. Chao was in Boone County last year to announce the award of a $67 million grant to fund infrastructure improvements (archive photo)

Chao was the surprise choice of President Extremely Stable Genius to run the Transportation Cabinet back in 2016, carrying with her impeccable political connections, having served as the do-nothing secretary of labor under President George W. Bush and being the wife of the most powerful man in the legislative branch.

For the most part she has remained on the sidelines eschewing headlines, save for an incident when she decided to give a couple of hecklers the business for verbally attacking her old man at a Louisville restaurant. While President ESG has frequently flapped his gums about championing a massive infrastructure measure – one of his few initiatives to carry the mark of sanity – Chao could usually be found standing in the sidelines.

Then came the report that Chao was still holding some stock that she vowed to divest herself of. In fact, instead of dumping the paper as promised she’s holding more shares than when she entered office.

Seems Chao was serving on the board of directors of Vulcan Materials, an Alabama firm with extensive ties to the transportation industry, when she was nominated to head the department. As part of an ethics settlement she signed in April 2016, Chao agreed to take “a cash payout for all of my vested deferred stock units,” a move that would understandably conclude her financial relationship with the company.

Except she didn’t do it. The Wall Street Journal revealed last month that Chao was holding somewhere between $250,000 and $500,000 worth of Vulcan stock. Instead of accepting a cash payout for her options, Chao grabbed company shares.  So the nation’s transportation secretary, after vowing to junk her holdings, still owned stock in one of the nation’s largest suppliers of highway construction materials.

What’s more, according to the Journal, the value of those stocks rose by more than $40,000 in the year she promised to get rid of them.

As you may have guessed, the DOT blamed the media for the contretemps. After all, she promised not to involve herself in any issues involving Vulcan – and, of course, her underlings who are involved would never think of assisting a firm putting money in the boss’s pockets. And the transaction was approved by senior career ethics officials in the Department of Transportation – which, during the administration of ESG, is akin to asking Whitey Bulger for permission to ice somebody.

That was the first con game, the old bait-and-switch, all the bunco guys know it. Then came the news about her doing favors for her old man.

According to Politico, our gal Elaine, beginning in 2017, directed an aide, now her chief of staff, Todd Inman, to serve as a “special liaison’’ for Kentucky to help the commonwealth with grant applications and to address other transportation needs. That resulted in at least $78 million in projects, including road connections to the riverport in Owensboro, an expedited process to change the William H. Natcher Parkway to I-165 and a $67 million discretionary grant to upgrade roads in rural Boone County.


Inman, according to Politico, sent an email to McConnell’s Senate office declaring that Chao had personally asked him to serve as an intermediary. He proceeded to advise ol’ Root-‘n-Branch and local Kentucky officials on grants that carried special significance for the senate majority leader — including a highway-improvement project in a McConnell political stronghold that had been twice rejected for previous grant applications.

It’s worth noting that Chao’s department didn’t have a liaison for any other state. McConnell is seeking re-election in 2020 and the stated projects could help his efforts in the two affected regions. The most recent survey, conducted by The Economist and YouGov this month, showed that McConnell is held favorably by only 29 percent of those questioned, unfavorably by 54 percent.

So he needs all the help he can get. While commonwealth residents may appreciate the favors done in their behalf, the whole thing stinks to high heaven with conflicts of interest, particularly given the White House vow, one presumably shared by the Department of Transportation, to drain the swamp.

As Pogo, himself a swamp denizen, once acidly noted, “We have met the enemy and he is us.”

There have been other incidents. It’s now coming out, according to the New York Times and Politico, that Chao may have sought to use her position to benefit her family’s shipping company, the Foremost Group, once run by her father now by her sister.

Foremost has extensive ties to the Chinese government. The company has engaged in substantial financial transactions with a government-owned bank and maintains an interest in a Chinese shipyard. According to the Times,Chao planned a visit to Beijing in 2017 on government business and arranged for members of her family to attend government meetings – a potential conflict so hot that the State Department was informed. Chao eventually called the whole thing off.

Kentucky, rather obviously, has been embarrassed by cabinet-level appointments during the current administration. Before Chao the public learned of the exploits of one Scott Pruitt, erstwhile Lexingtonian, now Oklahoma’s problem, who was such an outrageous scammer as administrator of the Environmental Protection Agency that even the ESG administration, certainly the most unscrupulous bunch to hit the DC scene since Warren G. Harding, couldn’t stomach him.

Pruitt, one must admit, is out of Chao’s league, although she gets an A for effort. A true Hall of Shamer, this is the guy, remember, who was under at least 14 separate federal investigations by the time he left office in July 2018 regarding his spending habits, conflicts of interests, extreme secrecy and management practices.

Chao hasn’t reached that level yet. But give her time.

NKyTribune’s Washington columnist Bill Straub served 11 years as the Frankfort Bureau chief for The Kentucky Post. He also is the former White House/political correspondent for Scripps Howard News Service. A member of the Kentucky Journalism Hall of Fame, he currently resides in Silver Spring, Maryland, and writes frequently about the federal government and politics. Email him at williamgstraub@gmail.com.

Related Posts

Leave a Comment