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DOT official denies allegations that Chao helped her family’s company

Oversight committee questioned whether Transportation secretary's TV appearances with family in China were improper

Transportation Secretary Elaine L. Chao shakes hands with Labor Secretary Eugene Scalia during his confirmation hearing before the Senate Health, Education Labor and Pensions Committee on Sept. 19. (Caroline Brehman/CQ Roll Call)
Transportation Secretary Elaine L. Chao shakes hands with Labor Secretary Eugene Scalia during his confirmation hearing before the Senate Health, Education Labor and Pensions Committee on Sept. 19. (Caroline Brehman/CQ Roll Call)

Allegations that Transportation Secretary Elaine L. Chao used her office to help the shipping company owned by her father and sister are “simply false,” a Transportation Department official told the chairman of the House Oversight and Reform Committee on Monday.

Adam Sullivan, the departments’s assistant secretary of governmental affairs, said in a letter to Chairman Elijah E. Cummings that Chao is not involved with the management or operations of her family’s shipping company, Foremost Group, and does not have a financial stake in the company.

[Committee launches probe of Chao’s ties to family’s business]

Cummings, a Maryland Democrat, questioned in a Sept. 16 letter to Chao whether she had used her Cabinet position to benefit Foremost Group. Cummings said he was launching an investigation after reports that Chao had appeared alongside her father in at least a dozen Chinese media interviews, sometimes behind the official seal of the Department of Transportation.

But in his response to Cummings’ letter, Sullivan defended her Chinese TV appearances, writing that “there is nothing new or nefarious about the fact that Secretary Chao is a role model for immigrants from Asia.”

He wrote that the department does not do anything that would “regulate, promote, or benefit” the business financially.

Sullivan also dismissed allegations that the department helped Chao’s family’s business by reducing funding for programs that help U.S.-flagged vessels in foreign trade. He called those allegations baseless and said Chao “has been one of our Nation’s strongest advocates for the U.S.-flagged maritime industry.”

“Most disappointing among the allegations raised in these media reports are the unfair insinuations about the Secretary’s family,” Sullivan wrote, saying Chao’s family members “are not public figures, and they did not sign up for the disparagement that apparently comes with public service.”

Cummings’ letter had also sought information on why Chao did not divest her stock in Vulcan Materials, a Birmingham, Alabama-based construction company, immediately after becoming secretary.

[House Ethics Committee announces reviews of Tlaib, Huizenga, Spano]

Cummings said that although Chao promised in April 2018 to cash out her stock holdings in the company, where she served on the board of directors for two years, she did not sell her shares until June 3, 2019, after the Wall Street Journal published an article about her failure to divest.

In his letter, Sullivan said multiple ethics officials within the federal government “consider the matter closed,” and said Chao was not required by law to divest her shares but did so anyway.

“Secretary Chao’s decision to divest demonstrates her commitment to going above and beyond ethical requirements,” he wrote.

Sullivan’s response comes one week after the House Oversight and Reform Committee’s ranking Republican Jim Jordan of Ohio and Subcommittee on Government Operations ranking Republican Mark Meadows of North Carolina sent a letter to Cummings complaining about the investigation. Jordan and Meadows wrote that the investigation “largely rehashes old allegations and ignores information unhelpful to your political objectives.”

The Transportation Department letter sent Monday included Chao’s 2019 and 2018 financial disclosures and letters exchanged with ethics officials on her shares in Vulcan Materials.

It was characterized by Department of Transportation officials as “the beginning of a rolling production” of responses to the committee.

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