WASHINGTON — The House Oversight and Reform Committee asked Transportation Secretary Elaine Chao on Monday to turn over documents related to communication with her family’s shipping company as the panel stepped up an investigation into whether any actions taken by Ms. Chao amount to a conflict of interest.
The request by the committee in the Democratic-controlled House relates to actions Ms. Chao has taken that potentially benefited Foremost Group, a New York-based shipping company owned by her family. Foremost has received hundreds of millions of dollars in loan commitments from a bank run by the Chinese government to help build ships that Foremost has purchased from government-owned shipyards there.
The actions by Ms. Chao — including joint public appearances since she became transportation secretary in 2017 with her father, James Chao, who founded the company, and a planned trip to China to meet with government officials there along with her father — have led House investigators to question if she is using her office to try to benefit her family’s financial interests.
“Federal regulations prohibit federal employees from using their public offices for the ‘private gain’” of friends or relatives, said the letter sent on Monday to Ms. Chao by the House investigators, who cited articles that appeared in The New York Times in June and Politico in 2018 that detailed continued ties between Ms. Chao and her family’s company. “Several reports indicate that you have used your official position to benefit Foremost Group, a shipping company owned by your father and sisters that is headquartered in New York and operates a fleet that transports materials to and from China.”
The Times investigation found numerous instances in which Ms. Chao, as transportation secretary, may have boosted Foremost’s image. In addition to inviting her father to the department in 2017, she also appeared at a signing ceremony that August at the Harvard Club in New York involving Foremost and the Sumitomo Group, a Japanese company with mass transit projects in the United States that fell under her oversight.
The letter to Ms. Chao cites moves by the department to cut specific grant programs intended to help support the United States maritime industry. They include cuts proposed, but rejected by Congress, in 2017 and 2018 for the Maritime Security Program, which subsidizes American-flagged cargo ships so they are available, when necessary, to help the Pentagon move supplies to war zones. Cutting those grants could have undermined the American maritime industry at the same time her family’s company was receiving support from the Chinese maritime industry.
The committee also asked Ms. Chao about her failure in 2018 to sell off her holdings in Vulcan Materials Company, a manufacturer of road construction materials, despite a promise to do so in an ethics agreement that Ms. Chao signed in early 2017 before her confirmation as transportation secretary.
The letter is signed by Representative Elijah E. Cummings, Democrat of Maryland, the committee’s chairman, and Representative Raja Krishnamoorthi, Democrat of Illinois, who is the chairman of the panel’s economic and consumer policy subcommittee.
Ms. Chao has said through a spokesman that she has taken no official action to benefit Foremost. Any appearances with her father — including interviews with Chinese-language reporters at times standing in front of the Transportation Department flag or logo — since she became secretary were just routine family events, the spokesman said.
The agency also pointed out that while it did advocate cuts to certain maritime grant programs, overall it has increased maritime spending, particularly on ships used by maritime academies.
The agency has also said that Ms. Chao’s failure to sell the Vulcan stock was an oversight that occurred when the company paid her out on stock options she earned while serving on the Vulcan board by issuing her shares of stock in the company instead of paying her cash. Ms. Chao subsequently sold the Vulcan stock, after it was reported, at first by The Wall Street Journal, that she still had financial ties to the company, even while she helps oversee federal highway building efforts.
The House Oversight Committee sent Ms. Chao 18 different document and information requests related to the two matters, including requests for copies of any communication since January 2017 between Ms. Chao or any employee at the Transportation Department with her father or her sister Angela Chao, who is now the chief executive of Foremost.
The committee also asked for copies by the end of this month of all documents related to a trip that Ms. Chao planned to take to China in October 2017. The trip was canceled after State Department officials raised ethics concerns about her plan to include members of her family in meetings with Chinese government officials, as was reported in June by The Times.
House investigators have sent out many letters like this since Democrats took control in 2019, requests that in many cases the Trump administration has resisted, leading to subpoenas, and growing friction between the House Democrats and the administration.
A spokeswoman for the Oversight Committee said this request to Ms. Chao was the “initial inquiry to Secretary Chao about these specific issues,” suggesting that this is not a matter that the committee has already spent a large amount of time investigating.