DawgTalkers.net Forums DawgTalk Palus Politicus Chao created special path for McConnell’s favored projects (They're married and appear to be personally profiting from this)

Chao created special path for McConnell’s favored projects

A top Transportation official helped coordinate grant applications by McConnell’s political allies.

By TUCKER DOHERTY and TANYA SNYDER 06/10/2019 05:02 AM EDT

The Transportation Department under Secretary Elaine Chao designated a special liaison to help with grant applications and other priorities from her husband Mitch McConnell’s state of Kentucky, paving the way for grants totaling at least $78 million for favored projects as McConnell prepared to campaign for reelection.

Chao’s aide Todd Inman, who stated in an email to McConnell’s Senate office that Chao had personally asked him to serve as an intermediary, helped advise the senator and local Kentucky officials on grants with special significance for McConnell — including a highway-improvement project in a McConnell political stronghold that had been twice rejected for previous grant applications.

Beginning in April 2017, Inman and Chao met annually with a delegation from Owensboro, Ky., a river port with long connections to McConnell, including a plaza named in his honor. At the meetings, according to participants, the secretary and the local officials discussed two projects of special importance to the river city of 59,809 people — a plan to upgrade road connections to a commercial riverport and a proposal to expedite reclassifying a local parkway as an Interstate spur, a move that could persuade private businesses to locate in Owensboro.

Inman, himself a longtime Owensboro resident and onetime mayoral candidate who is now Chao’s chief of staff, followed up the 2017 meeting by emailing the riverport authority on how to improve its application. He also discussed the project by phone with Al Mattingly, the chief executive of Daviess County, which includes Owensboro, who suggested Inman was instrumental in the process.

“Todd probably smoothed the way, I mean, you know, used his influence,” Mattingly said in a POLITICO interview. “Everybody says that projects stand on their own merit, right? So if I’ve got 10 projects, and they’re all equal, where do you go to break the tie?”

“Well, let’s put it this way: I only have her ear an hour when I go to visit her once a year,” he added of Chao and Inman, a longtime Bluegrass State operative who had worked as McConnell’s advance man. “With a local guy, he has her ear 24 hours a day, seven days a week. You tell me.”

The circumstances surrounding the Owensboro grant and another, more lucrative grant to Boone County, highlight the ethical conflicts in having a powerful Cabinet secretary married to the Senate’s leader and in a position to help him politically. McConnell has long touted his ability to bring federal resources to his state, which his wife is now in a position to assist.

Chao’s designation of Inman as a special intermediary for Kentucky — a privilege other states did not enjoy — gave a special advantage to projects favored by her husband, which could in turn benefit his political interests. In such situations, ethicists say, each member of a couple benefits personally from the success of the other.

“Where a Cabinet secretary is doing things that are going to help her husband get reelected, that starts to rise to the level of feeling more like corruption to the average American. … I do think there are people who will see that as sort of ‘swamp behavior,’” said John Hudak, a Brookings Institution scholar who has studied political influence in federal grant-making.

In fact, days after launching his 2020 reelection campaign McConnell asked Owensboro’s mayor to set up a luncheon with business and political leaders at which the senator claimed credit for delivering the grant.

“How about that $11 million BUILD grant?” McConnell asked the crowd rhetorically, according to the Owensboro Times. He then recalled his role in securing earlier grants to the city, adding, “It’s done a lot to transform Owensboro, and I was really happy to have played a role in that.”

McConnell’s role — along with Chao’s and Inman’s — was also celebrated by local officials when the $11.5 million grant was approved — to much local fanfare in December 2018.

“Firstly, we are thankful that we had such good associations built with Sen. McConnell and the U.S. Department of Transportation because without them it wouldn’t have happened,” declared Owensboro Mayor Tom Watson, standing alongside three other local officials at a news conference celebrating the grant award.

“We’re just really grateful and thankful to Sen. McConnell and Secretary Chao and our own Todd Inman,” added Mattingly.

Owensboro wasn’t the only beneficiary of Inman’s assistance. He also communicated with McConnell’s office about multiple requests from county executives to meet with Chao to speak about potential projects in Kentucky, according to emails which, like the others, were obtained under the Freedom of Information Act by the watchdog group American Oversight.

One of those executives, Boone County Judge/Executive Gary Moore, met with Chao in December 2017. Moore’s request, a $67 million discretionary grant to upgrade roads in rural Boone County, another McConnell stronghold northeast of Louisville, was ultimately approved in June 2018.

Chao declined to comment for this story, and neither she nor Inman addressed questions about his role as intermediary between the department and Kentucky.

Inman said in a statement, “I’m proud to work for the Secretary and it’s an honor to work at the Department of Transportation, especially as this Administration is prioritizing infrastructure investments and meeting with people from all 50 states to discuss their needs. Our team of dedicated career staff does an outstanding job evaluating hundreds of applications for these highly competitive grant programs, a thorough process developed well before this Administration.”

The Transportation Department, through a spokesperson, said that “No state receives special treatment from DOT,” noting that Kentucky is 26th in population and 25th in DOT money in the Trump years. Of 169 grants awarded during Chao’s tenure, the spokesperson said, Kentucky received five.

“The evaluation process, which is well known, originates with dedicated career staff thoroughly reviewing applications before senior review teams are involved,” the spokesperson said. “This evaluation takes thousands of hours across our discretionary grant programs. Similarly, a team of career staff handles cost-benefit and project readiness review. Discretionary grant programs are competitive and based on merit and how well the projects align with selection criteria.”

Nonetheless, one former career official who was involved in the grant review process under multiple administrations, said that once the findings of the professional staff are presented to the secretary’s office, politics often plays a role in who gets the money.

Putting a thumb on the scale for a favored project, the official said, “is really, very common, I would say across parties.”

“It’s always going to be political,” the former official, who spoke without attribution for fear of reprisals, added. “We have a merit-based process that we essentially ignore, [and] it’s really detrimental to meeting national transportation needs and having people feel like the process is worth engaging in.”

Virginia Canter, a former White House associate counsel under Presidents Barack Obama and Bill Clinton and current ethics counsel for the Citizens for Responsibility and Ethics in Washington, said showing political favoritism in awarding grants violates ethical standards. And when a potential beneficiary is a spouse, there’s an extra level of concern.

“There’s a standard for government employees; they’re expected to be impartial,” said Canter. “When you have a spouse who’s the head of an agency and the other spouse is a leading member of Congress — and their office is referring matters to the department, and they’re flagging things from donors, from people with particular political affiliations, who are quote-unquote ‘friends’ — it raises the question of whether the office, instead of being used purely for official purposes, is being used for political purposes.

“The fact that they’re both in these very important positions gives them the opportunity to be watching out for each other’s political and professional interests,” Canter said. “Anytime a member of Congress can bring home funding to his or her community it could make a difference. It shows the member is being responsive.”

McConnell, for his part, did not address questions about potential conflicts of interest in dealing with his wife’s department, instead touting his own clout.

“Every single day, Kentuckians from across the Commonwealth contact me with their concerns,” he told POLITICO in an emailed statement. “As Senate Majority Leader and a senior member of the Appropriations Committee, I am able to ensure that these issues — both large and small — are part of the national discussion. Kentucky continues to punch above its weight in Washington, and I am proud to be a strong voice for my constituents in the Senate.”

In his political career, McConnell has often touted specific grants as proof of his understanding of community needs.

McConnell has long had a special relationship with Owensboro, whose location on a bend of the Ohio River had once made it an ideal hub for manufacturing and agriculture. At the beginning of McConnell’s Senate career in the late 1980s, the decline of the tobacco industry and the rise of shopping malls far from the city center left Owensboro’s downtown dotted with boarded-up storefronts and empty streets that had once bustled decades earlier.

As McConnell rose to power in the national Republican Party in the 1990s and 2000s, he secured funds for Owensboro, earning him goodwill that helped him survive a close election in the 2008 Democratic wave. But after congressional Republicans banned earmarks in 2011, McConnell was forced to find other ways to bring federal resources back home.

Today, Owensboro’s growing downtown stands as a symbol of his success. City landmarks, street signs and plaques tout the senator’s role in helping revitalize downtown, especially along the city’s impressive new riverfront esplanade.

McConnell’s involvement with Owensboro began in earnest after 2003, when then-Owensboro Mayor Waymond Morris and future mayor, Ron Payne, visited McConnell at his Washington office and showed him a photograph of the eroding riverbank. The next year, the city rededicated a portion of the riverfront as “McConnell Plaza” and used more than $1 million in city funds to build a riverside park with ample green space, winding brick paths and outdoor seating for events like the town’s annual barbecue festival.

“Finally, at the end I said, ‘Can I ask you one question? Did you say $40 million?’” Watson told POLITICO. “And he laughed and hung up. I was stunned.”

Owensboro used the federal windfall as seed money for an ambitious overhaul of the entire riverfront, borrowing tens of millions of additional dollars to bring it to fruition over the next several years.

A riverwalk with pavilions and cascading fountains was installed, anchored on one end by a massive and elaborately designed playground named the best in the world by Landscape Architects Network — complete with oversized artificial tree sculptures, climbing walls, a concession stand, free Wi-Fi and rubber turf. A nearby plaque marking the playground’s rededication gives “special thanks to Senator Mitch McConnell.”

At the other end, a sparkling 184,000-square-foot convention center was erected at a cost of more than $50 million dollars — roughly twice the town’s initial budget for the project — in a bid to bring large conventions and other business to the downtown area. In stark contrast, a rusting one-story auto repair shop sits across the street, a reminder of the earlier decay.

McConnell’s support for Owensboro did not end at the riverfront. Mayor Watson recalled taking McConnell on a tour of the town’s aging H.L. Neblett Community Center, when suddenly water leaked through the roof, hitting McConnell’s ear and trickling down his shirt. Watson turned to the senator and suggested that the center needed a new roof. McConnell replied that it needed a new building — and then secured $3 million for renovations when he returned to Washington.

City officials also credit McConnell for serving Owensboro’s interests on national issues, including federal subsidies that kept airlines flying to Owensboro’s regional airport, as well as more recent efforts to legalize hemp as an agricultural commodity — a potential replacement for the city’s dying tobacco trade.

After stepping down for several years to focus on his prosthetics business, Watson was reelected as mayor in 2016. By then, the city’s riverfront investments were beginning to pay off. The downtown revitalization project mitigated the effects of the Great Recession in Owensboro and helped the city outpace Kentucky and United States overall in employment growth.

The city was still eyeing more projects to build on the earlier investments, but Owensboro’s remaining debt and scarce state resources limited the available funding options. Once again, the town turned to the federal government for support.

“The only money that’s still being circulated comes from Washington,” Watson explained.

In particular, the city wanted to widen and improve a section of Kentucky Highway 331 that connected the port’s river and rail shipping facilities to the federal highway system. Local homeowners and drivers complained that the highway’s two narrow lanes and limited sightlines throttled capacity and put local residents at risk.

In the post-earmark era, officials saw the federal Department of Transportation’s grant programs as their best bet to secure more funds, and believed their project had the merit to win in a competitive evaluation process. But success eluded them.

The city submitted its first grant application during the final months of the Obama administration, under a freight and highway improvement program called FASTLANE. But after a technical review by career DOT staff, the city’s application was passed over in favor of other projects.

According to Mattingly, local officials were undeterred and saw Chao’s appointment as Transportation secretary — and Owensboro local Todd Inman’s new role as director of operations in her office — as a valuable connection moving forward.

Back in Washington, Inman encouraged that perception. In a February 2017 email to McConnell’s chief of staff, he wrote, “The Secretary has indicated if you have a Ky-specific issue that we should flag for her attention to please continue to go through your normal channels but feel free to contact me directly as well so we can monitor or follow up as necessary.”

Owensboro submitted a second grant application in the first year of the Trump administration under the department’s INFRA grant program — the new administration’s successor to FASTLANE — which was likewise unsuccessful. Weeks before that application was due, McConnell’s office emailed members of Chao’s staff with the Owensboro Riverport Authority CEO’s contact information, requesting technical assistance for the riverport’s grant application. Derek Kan, Chao’s undersecretary for policy, forwarded the request to his deputy, who confirmed that they were following up.

Finally, in 2018, the riverport resubmitted a third time under the department’s BUILD program, a competitive infrastructure grant program that began under the Obama administration’s economic stimulus law. This time, the application was successful. City officials held a December news conference in front of a Christmas tree in City Hall announcing the $11.5 million federal award.

Four months later, as McConnell prepared to launch his reelection campaign, he called Mayor Watson and asked him to pull together a group of political and business leaders at the riverport to tout his role in getting Owensboro the grant award, Watson said. On April 22, within days of officially launching his 2020 campaign, the Senate majority leader stood inside a riverport building and celebrated his achievements.

“I can’t tell you how exciting it is for me to see what the riverfront has spawned,” McConnell told the assembled crowd. “Not only the project itself, but all around it.”

Inman, who is 48, grew up in Marshall County, Ky., about a two-hour drive from Owensboro. Soon after graduating from the University of Mississippi in 1993, he moved to Owensboro, where he ran a small insurance business from 1994 to 2017, according to his LinkedIn page.

He also became involved in Republican politics, running unsuccessfully for mayor of Owensboro in 2004 and doing advance work and event planning for statewide GOP candidates. He worked on McConnell’s campaigns in 2008 and 2014 and then became the deputy state director for Donald Trump’s 2016 campaign in Kentucky.

Two days after Trump’s inauguration, Inman excitedly announced his new job in the administration in a Facebook post picked up by local media.

“It's with great honor but also sadness that on Friday I accepted a Presidential appointment to work for the Honorable Elaine L. Chao as a Director in the cabinet of the United States Department of Transportation,” Inman wrote, according to the local radio station WBKR. “While this means I must leave my family friends and business in Owensboro it is humbling to know I can be of service to our country ... I look forward to the coming years of helping to support the secretary in her leadership of the Department of Transportation … ”

His first posting was as director of operations, from which he helped steer requests for grant assistance from McConnell’s office — at Chao’s direction, according to the emails.

“Cabinet members are known to be preferential to their own home state,” said Hudak, the Brookings scholar who has studied political influence in federal grant-making, adding that they tend to prioritize the home states of congressional leaders as well, “so you can have a sort of doubling effect.”

“There’s nothing illegal about her steering those funds to her husband’s home state, and her home state, as long as things are aboveboard,” Hudak said. “The question though is, how do you deal with conflicts of interests? And this is a clear conflict. ... Even if it’s not legally so, these are political offices, so the optics of this are important. In a business setting, you would put firewalls up to prevent those types of bad optics.”

McConnell, however, is making no effort to hide his influence as he ramps up his reelection effort. Though the Bluegrass State is heavily Republican, he, like senators of both parties who take on national leadership positions, knows he is both a prime target for out-of-state donors and vulnerable to charges that he has lost touch with his constituents.

New York Sen. Chuck Schumer, the Democratic leader in the Senate, has personally urged Marine veteran and former fighter pilot Amy McGrath to run against McConnell, saying the GOP leader “is more vulnerable now than ever before.”

At the grassroots level, Kentucky radio host Matt Jones has indicated he might be prepared to run as a populist Democrat against McConnell, a target of frequent barbs on his hugely popular sports show.

“What has Mitch McConnell done to help Kentucky?” Jones asked in a POLITICO interview. “Mitch McConnell has been a master — a master at helping wealthy business interests get wealthier. If there is a rich guy Hall of Fame, he should be in it.”

McConnell’s answer to these criticisms is clear: He’s used his influence to deliver on Kentucky’s priorities.

"All 100 senators may have one vote," McConnell told the Lexington Herald-Leader last year, "but they’re not all equal. Kentucky benefits from having one of its own setting the agenda for the country."

Kathryn A. Wolfe contributed to this report.

https://www.politico.com/story/2019/06/10/mcconnell-elaine-chao-1358068

You just can't make this stuff up.

Honestly, we know all politicians are corrupt. From both sides of the isle.

This sort of thing bores me.

I'd much rather hear news about how big pharma is lining the pockets of congressmen. I feel it is much more relevant to the American people.

But I guess, that will never come up. Because hush money.

Transportation Secretary Still Owns Stock She Pledged to Divest


https://www.wsj.com/articles/transportat...est-11559035921

Maddow pointed out the McConnell's wife, Elaine Chao, owns major stock in the biggest asphalt aggregate supplier in the country... She makes money when roads get built and she is a Transportation Secretary.

You just can't make this stuff up.

A ‘Bridge’ to China, and Her Family’s Business, in the Trump Cabinet

Elaine Chao has boosted the profile of her family’s shipping company, which benefits from industrial policies in China that are roiling the Trump administration.

Elaine Chao, the transportation secretary, oversees the American maritime industry. Her family’s shipping company, Foremost Group, has deep ties to the Chinese elite. Credit ~ Tom Brenner for The New York Times

By Michael Forsythe, Eric Lipton, Keith Bradsher and Sui-Lee Wee June 2, 2019

The email arrived in Washington before dawn. An official at the American Embassy in Beijing was urgently seeking advice from the State Department about an “ethics question.”

“I am writing you because Mission China is in the midst of preparing for a visit from Department of Transportation Secretary Elaine Chao,” the official wrote in October 2017.

Ms. Chao’s office had made a series of unorthodox requests related to her first scheduled visit to China as a Trump cabinet member, according to people with knowledge of the email. Among them: asking federal officials to help coordinate travel arrangements for at least one family member and include relatives in meetings with government officials.

In China, the Chaos are no ordinary family. They run an American shipping company with deep ties to the economic and political elite in China, where most of the company’s business is centered. The trip was abruptly canceled by Ms. Chao after the ethics question was referred to officials in the State and Transportation Departments and, separately, after The New York Times and others made inquiries about her itinerary and companions.

“She had these relatives who were fairly wealthy and connected to the shipping industry,” said a State Department official who was involved in deliberations over the visit. “Their business interests were potentially affected by meetings.”

The move to notify Washington was unusual and a sign of how concerned members of the State Department were, said the official, who was not authorized to speak on behalf of the agency.

David H. Rank, another State Department official, learned of the matter after he stepped down as deputy chief of mission in Beijing earlier in 2017. “This was alarmingly inappropriate,” he said of the requests.

The Transportation Department did not provide a reason for the trip’s cancellation, though a spokesman later cited a cabinet meeting President Trump had called at the time. The spokesman said that there was no link between Ms. Chao’s actions as secretary and her family’s business interests in China.

Ms. Chao has no formal affiliation or stake in her family’s shipping business, Foremost Group. But she and her husband, Senator Mitch McConnell of Kentucky, have received millions of dollars in gifts from her father, James, who ran the company until last year. And Mr. McConnell’s re-election campaigns have received more than $1 million in contributions from Ms. Chao’s extended family, including from her father and her sister Angela, now Foremost’s chief executive, who were both subjects of the State Department’s ethics question.

Over the years, Ms. Chao has repeatedly used her connections and celebrity status in China to boost the profile of the company, which benefits handsomely from the expansive industrial policies in Beijing that are at the heart of diplomatic tensions with the United States, according to interviews, industry filings and government documents from both countries.

Now, Ms. Chao is the top Trump official overseeing the American shipping industry, which is in steep decline and overshadowed by its Chinese competitors.

Her efforts on behalf of the family business — appearing at promotional events, joining her father in interviews with Chinese-language media — have come as Foremost has interacted with the Chinese state to a remarkable degree for an American company.

Foremost has received hundreds of millions of dollars in loan commitments from a bank run by the Chinese government, whose policies have been labeled by the Trump administration as threats to American security. The company’s primary business — delivering China’s iron ore and coal — is intertwined with industries caught up in a trade war with the United States. That dispute stems in part from the White House’s complaints that China is flooding the world with subsidized steel, undermining American producers.

Foremost, though a relatively small company in its sector, is responsible for a large portion of orders at one of China’s biggest state-funded shipyards, and has secured long-term charters with a Chinese state-owned steel maker as well as global commodity companies that guarantee it steady revenues.

In a rarity for foreigners, Angela and James Chao have served on the board of the holding company for China State Shipbuilding, a state-owned enterprise that makes ships for the Chinese military, along with Foremost and other customers. Angela Chao is also on the board at the Bank of China, a top lender to the shipbuilder, and a former vice chairman of the Council of China’s Foreign Trade, a promotional group created by the Chinese government.

Angela Chao, speaking in an interview in New York on Friday, said that her board positions were unremarkable, emphasizing that Foremost did business around the world. She denied that the company had a “China focus” beyond what most dry bulk carriers have in a world dominated by Chinese manufacturing. “We are an international shipping company, and I’m an American,” she said, adding, “I don’t think that, if I didn’t have a Chinese face, there would be any of this focus on China.”

James Chao was not made available for an interview; a representative of the company received written questions from The Times two weeks ago, and the company responded with a fact sheet on Friday.

Though Foremost worked in the late 1960s on American government contracts to ship rice to Vietnam, according to James Chao’s biography, it has almost no footprint left in the United States, save for a modest corporate headquarters in Midtown Manhattan. It registers its ships in Liberia and Hong Kong and owns them through companies in the Marshall Islands.

Since Elaine Chao became transportation secretary, records show, the agency budget has repeatedly called to cut programs intended to stabilize the financially troubled maritime industry in the United States, moving to cut new funding for federal grants to small commercial shipyards and federal loan guarantees to domestic shipbuilders.

Her agency’s budget has also tried to slash spending for a grant program that helps keep 60 American-flagged ships in service, and has tried to scale back plans to buy new ships that would train Americans as crew members. (In China, Ms. Chao’s family has paid for scholarships and a ship simulator to train Chinese seamen.)

Congress, in bipartisan votes, has rejected the budget cuts, some of which have been offered up again for next year. One opponent of the cuts has been Representative Alan Lowenthal, a California Democrat whose district includes one of the nation’s largest cargo ports.

“The Chinese government is massively engaged in maritime expansion as we have walked away from it,” he said in an interview. “There is going to come a crisis, and we are going to call upon the U.S. maritime industry, and it is not going to be around.”

Elaine Chao declined to be interviewed, but the Transportation agency provided a written statement from her.

“My parents and I came to America armed only with deep faith in the basic kindness and goodness of this country and the opportunities it offers,” Ms. Chao said. “My family are patriotic Americans who have led purpose-driven lives and contributed much to this country. They embody the American dream, and my parents inspired all their daughters to give back to this country we love.”

The department spokesman said The Times’s reporting wove “together a web of innuendos and baseless inferences” in linking Ms. Chao’s work at Transportation to her family’s business operations.

Agency officials said the department under Ms. Chao had been a champion of the American maritime industry, adding that several proposed cuts had been made by previous administrations and that the Trump administration had since moved to bolster funding.

Ms. Chao, 66, was born in Taiwan to parents who had fled mainland China in the late 1940s and later settled in the United States when she was a schoolgirl. She worked at Foremost in the 1970s but has had no formal role there in decades.

As her political stature has grown — she has served in the cabinet twice and has been married to Mr. McConnell for 26 years — Beijing has sought to flatter her family. A government-owned publisher recently printed authorized biographies of her parents, releasing them at ceremonies attended by high-ranking members of the Communist Party. On a visit last year to Beijing, Ms. Chao was presented with hand-drawn portraits of her parents from her counterpart in the transportation ministry.

The Chao family’s ties to China have drawn some attention over the years. In 2001, The New Republic examined them in the context of the Republican Party’s softening tone toward the country. When Ms. Chao was nominated as transportation secretary, ProPublica and others highlighted the intersection of her new responsibilities with her family’s business. And in a book published last year, the conservative author Peter Schweizer suggested the Chaos gave Beijing undue influence.

The Times found that the Chaos had an extraordinary proximity to power in China for an American family, marked not only by board memberships in state companies, but also by multiple meetings with the country’s former top leader, including one at his villa. That makes the Chaos stand out on both sides of the Pacific, with sterling political connections going to the pinnacle of power in the world’s two biggest economies.

Ms. Chao’s father, a founder of Foremost in 1964, has for decades cultivated a close relationship with Jiang Zemin, a schoolmate from Shanghai who rose to become China’s president. As the schoolmates crossed paths again in the 1980s, the Chaos reaped dividends from a radar company linked to Mr. Jiang that targeted sales to the Chinese military, documents filed with the Chinese government show.

Though Ms. Chao’s financial disclosure statements indicate she receives no income from Foremost, she made at least four trips to China with the company in the eight years between her job as labor secretary during the George W. Bush administration and her confirmation as transportation secretary in January 2017. And her father accompanied her on at least one trip that she took as labor secretary, in 2008, sitting in on meetings, including with China’s premier, one of the country’s top officials.

Public records show that she has benefited from the company’s success. A gift to Ms. Chao and Mr. McConnell from her father in 2008 helped make Mr. McConnell, the Republican majority leader, one of the richest members of the Senate. And three decades worth of political donations have made the extended family a top contributor to the Republican Party of Kentucky, a wellspring of Mr. McConnell’s power.

“This is a family with financial ties to a government that is a strategic rival,” said Kathleen Clark, an anti-corruption expert at Washington University in St. Louis. “It raises a question about whether those familial and financial ties affect Chao when she exercises judgment or gives advice on foreign and national security policy matters that involve China.”

A Family Business on the Rise

Elaine Chao, the transportation secretary, has been a steadfast booster of her family’s shipping business, which transports raw materials to fuel China’s heavy industries. In January 2017, as the Senate voted to confirm Ms. Chao, a bulk carrier ship sailed from Canada with a shipment of iron ore.

The ship, the Bao May, is owned by her family’s business, Foremost Group. Its destination: an iron ore transfer terminal on Liangtan Island, south of Shanghai.

Two weeks later, after unloading its cargo in China, the Bao May set sail for Brazil to collect another shipment of iron ore, weaving through the Strait of Malacca and crossing the Indian Ocean.

The size of three football fields, the Bao May is too big to pass through the Suez or Panama Canals, so it must sail around the southern tip of Africa on its voyages to Atlantic Ocean destinations. For the last two years, the Bao May has repeatedly made the round-tip journey between China and ports in Brazil and Canada.

On this trip, it arrived in Brazil in May 2017, docking at the Ponta da Madeira Maritime Terminal in São Luís, where ships load up with iron ore from Brazil's interior.

The Bao May was built in a Chinese shipyard and financed with loans from the Export-Import Bank of China, owned by the Chinese government. At the launch ceremony in Shanghai in 2010, the guest of honor was Ms. Chao. For years, the ship has been chartered by a state-owned Chinese steelmaker, giving Foremost a steady supply of revenue.

It is one of 19 ships owned by Foremost, which was founded by Ms. Chao’s father, James S.C. Chao, and is now run by her sister Angela.

While Foremost has its headquarters in Midtown Manhattan, its fleet is overwhelmingly focused on China. About 72 percent of the raw materials it has shipped since the beginning of 2018 has gone to China, according to figures from VesselsValue, a London-based firm that analyzes global shipping data.

Each year, Foremost ships transport hundreds of millions of tons of iron ore, coal and bauxite to China from ports around the globe. The shipments feed China’s industrial engine, especially its steel mills, whose products are part of an escalating trade dispute between China and the United States.

Four enormous gantry cranes rise on the banks of the Yangtze River near the East China Sea. In their shadow thousands of workers assemble cargo ships, each about as long as three football fields.

It is here, at the Shanghai Waigaoqiao shipyard, that Foremost Group’s newest ship, the Xin May, was built. Six similar ships are set to be built in the next several years, all part of an order by Foremost announced in December 2017 at the Harvard Club in New York.

Foremost first placed an order with the state-owned company in 1988 and over the decades has been its biggest North American customer, according to the shipbuilder. The relationship is so tight that Foremost’s offices in Shanghai are in the shipbuilder’s 25-story tower.

“We are committed to continuing to build ships in China,” Angela Chao said at the Harvard Club announcement, which was attended by the top official in China’s New York consulate. “My father was a pioneer in internationalizing the Chinese shipbuilding market, and it has been over 30 years that he has continuously ordered ships in China.”

Foremost has relied on the Export-Import Bank of China, or China EximBank, to finance at least four ships in the past decade. Its loans often come with lower interest rates and more generous repayment schedules than those made through some commercial lenders. As of 2015, the bank had made at least $300 million available to Foremost, it said at the time.

Angela Chao, in the interview with The Times, said that 2015 was the last year the company borrowed from the lender, describing its terms as less attractive than those of non-Chinese banks. She said the company never borrowed — “not even close” — $300 million, a figure she had not previously heard. “They are not a big part of our financing,” she said.

The Chao family’s connections run deep with the Chinese leadership, documents in China show.

As civil war raged across the country in the 1940s, Mr. Chao attended Jiao Tong University in Shanghai. A schoolmate was Mr. Jiang, who stayed in China after the Communist victory and ultimately became president. Mr. Chao went with the defeated Nationalists to Taiwan, where he became the youngest person to qualify as a ship’s captain, according to his biography.

Mr. Chao left for the United States in 1958, but a thaw in relations sparked by President Richard M. Nixon drew him back to his homeland in 1972, the first of a flurry of trips that established him as a successful member of the Chinese diaspora.

Mr. Chao got exceptional access. In 1984 he was invited to Beijing to celebrate the 35th anniversary of the People’s Republic and meet with the country’s top leader, Deng Xiaoping, according to materials at a museum in Shanghai dedicated to Mr. Chao’s wife, Ruth Mulan Chu Chao, who died in 2007.

Also in 1984, as China emerged from decades of political and economic turmoil, Ruth Chao bought a stake in a Chinese company that manufactured marine equipment, including radars, in partnership with Raytheon, the American defense contractor, according to Chinese corporate documents.

The investment, not previously reported, was held by a Panamanian company. The Chinese company, documents show, praised the “support for the construction of the nation” shown by Ruth Chao, identifying her as James’s wife and both of them as American citizens.

The now-defunct company targeted the Chinese military for sales of some of its gear, and a principal partner was a state-owned factory under the Ministry of Electronics Industry, which was led at the time by Mr. Jiang, according to corporate documents and a former employee. The employee, Zheng Chaoman, recalled the involvement of “the father of Elaine Chao.”

Within months, it generated enough revenue for Mr. Chao to donate profits to a foundation he had established in Shanghai, according to an announcement by the local government. The foundation sponsors training scholarships for merchant seamen, his wife’s biography said.

In the aftermath of the deadly suppression of pro-democracy demonstrations on Tiananmen Square in June 1989, the Chaos asked to divest their 25 percent stake in the company. Two months earlier, Elaine Chao had been confirmed by the Senate to a senior political appointment, as deputy transportation secretary under President George H. W. Bush.

The Transportation Department spokesman said Ms. Chao did not know anything about the venture. Angela Chao, in the interview, said her father did not “remember any ownership, and we can’t find anything on it.”

The family’s other business ties in China remained, including work that year by China State Shipbuilding on two new cargo ships for Foremost.

That August, Mr. Chao met with Mr. Jiang, who had been named general secretary of the Chinese Communist Party, the country’s most powerful position. Their hourlong meeting inside the leadership compound adjacent to the Forbidden City, together with the head of the state shipbuilding company, was described as “friendly” in the official People’s Daily newspaper.

The two former schoolmates would meet at least five more times during Mr. Jiang’s tenure as general secretary, according to a review of publicly available documents.

A Celebrity Face for the Company

As the first Chinese-American to serve as a cabinet secretary — eight years as labor secretary — Elaine Chao became an instant celebrity in China during the George W. Bush administration. Her family was a beneficiary of her newfound fame.

During a trip to China in August 2008 to represent the United States at the closing of the Olympic Games, Ms. Chao took her father to several official meetings with Chinese leaders, including one with the country’s premier, Wen Jiabao, according to diplomatic cables released by WikiLeaks. At the time, Mr. Chao was chairman of Foremost and a board member of China State Shipbuilding.

When she left government during the Obama years, she continued to put her celebrity status to use on behalf of the family business.

In 2010, she traveled to Shanghai with her father for the delivery ceremony of a cargo ship, the Bao May. The ship soon became a workhorse for Foremost, hauling raw materials to China from around the world under a seven-year charter with a subsidiary of a state-owned steel maker. Foremost paid for the Bao May and another ship with up to $89.6 million in loans from China EximBank, corporate records in Hong Kong show.

The next year, Ms. Chao was back in Shanghai for the launch of another ship, and in 2013, she traveled to Beijing with her father and her sister Angela for a meeting with the chairman of China State Shipbuilding, according to a company announcement.

Ms. Chao joined her family two years later at the signing of a loan for Foremost at China EximBank’s grand hall in Beijing. The loan, for $75 million, was made jointly with a Taiwanese lender to build two cargo ships.

The Transportation Department spokesman said it was “entirely appropriate” for Ms. Chao to take her father to meetings in 2008 as her “plus-one,” and said her visits between her government posts were done as a private citizen.

Angela Chao said her sister attended Foremost events “as a family member.”

“Foremost was founded in 1964; the company is 55 years old,” she added. “We were around and we were well respected well before Elaine was in anything. We predate her; she doesn’t predate us.”

The flurry of visits coincided with Foremost’s growing contributions to China’s globalized steel and shipping industries.

Today, Foremost’s fleet, like many, primarily serves the Chinese market, hauling bulk cargo such as iron ore, coal and bauxite. Of the 152 voyages made by its ships between Jan. 1, 2018, and April 12, 2019, 91 have been to or from China, accounting for 72 percent of Foremost’s total tonnage during that period, according to figures compiled by VesselsValue, a company that tracks shipping data.

Angela Chao said that its ships were chartered to commodity companies such as Cargill, and that Foremost did not “control where the ships go, so we’re like a taxicab.”

During her eight years out of government, Elaine Chao extended her connections in China, according to a review of Chinese websites and other public materials.

For example, she was appointed in 2009 to an advisory group in Wuhan, where the steel maker with the Foremost charter is based. Such appointments are largely ceremonial, but they can be sought after for the access they sometimes provide to local leaders.

That same year, she was granted an honorary professorship at Fudan University, and in 2010, she was awarded an honorary doctorate from Jiao Tong University.

With Mr. Trump’s election, Ms. Chao was asked to join the administration. During her confirmation hearing she did not discuss her family’s extensive ties to the Chinese maritime industry, and she did not disclose the various Chinese accolades she had received. The Senate’s written questionnaire requires nominees to list all honorary positions.

“It was an oversight,” the Transportation Department spokesman said.

A Budget at Odds With Congress

Ms. Chao has spoken repeatedly about her commitment to the American maritime industry, including during her confirmation hearing in 2017.

“I’m of an age where I have seen two wars in pivotal areas of the world,” she told the Senate Commerce Committee, with her father seated behind her. “If we did not have the merchant marine assets to assist the gray hulls on these campaigns, the military naval campaigns, our country would not have been able to supply our troops, bring the necessary equipment.”

But without Congress putting up roadblocks, some of the Trump administration’s budgetary actions proposed during her tenure would have reduced federal funding for programs that support the shipbuilding industry and ships that operate under American flags.

Plans drafted during the Obama administration had called for building up to five new, state-of-the-art ships big enough to train 600 cadets each to help the American military move equipment and supplies worldwide, especially during wartime.

But after Ms. Chao became secretary, the agency’s budget proposed buying old cargo ships instead and renovating them. Congress balked at the cost-cutting measure — one Democratic lawmaker mocked the agency’s plan to “buy a bunch of rusty old hulks” — and restored the funding.

More recently, the agency budget pushed to shrink the size of one of the new ships, again provoking bipartisan protests from Congress.

“Given the administration’s strong commitment to American manufacturing and to being sure that we can adequately control the seas, the targeting of programs that help the maritime industry remain strong doesn’t make sense to me,” said Senator Susan Collins of Maine, the Republican who leads the panel overseeing the Transportation Department budget. “It seems inconsistent with the administration’s overall goals.”

Ms. Collins added that the driving force behind these cuts had been the White House, not Ms. Chao, whom the senator called a “strong advocate” for the maritime program.

The agency budget in 2017 and 2018 also proposed reducing annual grants for the Maritime Security Program, which help American ships pay crews and cover the cost of meeting safety and training requirements.

It also moved in the last three years to eliminate new funding for a grant program that helps small shipyards stay in business, as well as a program that provides loan guarantees for the construction or reconstruction of American-flagged vessels.

Agency officials noted that many of the cuts were forced on the department by the White House, and that some of the same programs had been previously targeted, only to see the money restored by Congress, as happened with the Trump cuts.

Ms. Chao has supporters in the industry, citing her work to defend a federal program that allows only American-flagged ships to make deliveries between American ports, as well as the effort to replace training vessels, which has boosted the maritime unit’s overall budget.

“We have a secretary who comes from the maritime industry — and that has translated into an understanding of the importance of the maritime academies,” said Jerry Achenbach, superintendent of the Great Lakes Maritime Academy in Michigan.

But objections continue, including questions about why, despite repeated promises, Ms. Chao has not issued a detailed strategic plan for stabilizing the United States’ shrinking fleet.

Fair Kim, a retired Coast Guard deputy commander who works at an association that promotes the American shipping industry, said Ms. Chao and the Trump administration had a disappointing maritime record.

“If you preach America first, why not promote the U.S.-flagged fleet at the expense of foreign-flagged ships?” he asked. “This administration should be very friendly to us.”

A China-Friendly Approach

The Trump administration has made the rivalry with China a core tenet of American foreign policy, concluding that decades of accommodation has reinforced the country’s authoritarian rule and undermined the interests of the United States.

“Beijing is employing a whole-of-government approach, using political, economic and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States,” Vice President Mike Pence said during a speech in October.

None of that, however, has kept Ms. Chao from maintaining China-friendly relations, including engaging with the Chinese media about her family’s shipping business and multiple other subjects. During a televised interview, one prominent Chinese reporter, Tian Wei, described Ms. Chao as “a bridge” between Beijing and the Trump administration.

Ms. Chao’s official calendar, obtained by The Times through a public records request, shows at least 21 interviews or meetings with Chinese-language news organizations in her first year as transportation secretary.

In November 2017, she met for lunch at her office with Ma Jing, then the top official in the United States for CGTN, the China state television network.

The network has been under growing pressure from the Justice Department to detail its ties to the Chinese state as part of a stepped-up enforcement of foreign influence laws, and in March, Ms. Ma and a dozen other CGTN employees in Washington were reported to have been recalled to China.

In an interview in April 2017, Ms. Chao was photographed with her father next to a Transportation Department flag. Her father told the reporter how he had traveled on Air Force One and discussed “business” with the president.

He also took the opportunity to talk up his daughter’s new role in the administration. “It’s not just an honor for us Chinese,” Mr. Chao said to The China Press, a publication in the United States. “It’s an honor for Americans.”

The interview was first highlighted by Politico, which noted that Ms. Chao had made multiple media appearances with her father.

Ms. Chao’s schedule also shows that she attended an August 2017 event in New York celebrating the signing of a Foremost deal with Sumitomo Group, a Japanese company with mass transit projects in the United States, including California and Illinois, that fall under her oversight. The spokesman said she attended in a personal capacity and did not discuss agency business.

Marilyn L. Glynn, a former general counsel at the Office of Government Ethics, questioned Ms. Chao’s proximity to Foremost, saying she should recuse herself from decisions that broadly impacted the shipping industry.

“She might be tempted to make sure her family company is not adversely affected in any policy choices, or it might even just appear that way,” Ms. Glynn said.

The agency spokesman said that was not necessary because there was no conflict. “The family business is not in U.S.-flag shipping,” he said. “The trade routes are completely different; the ships are completely different.”

Ms. Chao’s first trip to China as transportation secretary was made last April amid an escalating trade war, six months later than originally planned.

The original trip had been described by the department as a “bilateral meeting” with Ms. Chao’s Chinese counterpart to discuss disaster response, infrastructure and related subjects.

Eight days before the planned start of the October 2017 trip, when contacted by The Times, Ms. Chao’s office said it could not provide a list of who would accompany her.

But the embassy in Beijing had received requests to accommodate Ms. Chao’s family members, according to interviews with State Department officials involved in the planning, as well as a redacted email obtained by The Times through a public records lawsuit.

Angela Chao said in the interview that she was already planning to be in Beijing to attend a Bank of China board meeting, and that her husband, the investor Jim Breyer, also had business in the Chinese capital. But she said she was unaware of her sister’s travel plans. Angela Chao was among the family members mentioned in the State Department discussions about the visit, according to a United States official.

The email, with the subject “ethics question,” had come from Evan T. Felsing, a senior economic officer for the State Department in Shanghai. Mr. Felsing, now based in India, declined to comment.

Other correspondence also signaled unease among American diplomats over whom Elaine Chao intended to take on the trip and the topics they would discuss with Chinese officials. Emails indicate that ethics lawyers in both the State and Transportation Departments weighed in.

“They would not have raised a question like this about a cabinet secretary unless it was something really serious,” said Mr. Rank, the former deputy chief of mission in Beijing, who resigned in protest over the Trump administration’s environmental policy.

https://www.nytimes.com/2019/06/02/us/politics/elaine-chao-china.html

You just can't make this stuff up.

How is any of this even possible in such high positions. Her family company has contracts with the Chinese state and she's a cabinet secretary and married to the head of the Senate... wth?

This story starts at 13:40 :

Except one side of the isle gets a pass while calling for others to be locked up.

Mitch’s name will be one carved into the gravestone of this country.

This one shows direct pay for play with the Russians......

Surely It's a Coincidence That a Firm Tied to a Russian Oligarch Is Pouring Millions Into Kentucky

The Louisville Courier-Journal is chasing a story that further illustrates what a wonderful environment for coincidence the current political moment happens to be.

Kentucky might be going into business with the Russian mafia. Not the rough-and-tumble “Godfather” crowd with the bent noses and such names like Tessio, Barzini and Luca Brasi. If all goes according to plan, by the middle of the year, we’ll be in business with Oleg Deripaska, a buddy of Vladimir Putin.

He could be sending $200 million — if you believe media reports — in what could very well be mobbed-up money to northeastern Kentucky to build a $1.7 billion aluminum plant on an old strip mine there. The 51-year-old billionaire emerged as a powerful businessman following the 1991 fall of the Soviet Union after a bloody fight for control of Russia's aluminum industry. Last November, the New York Times quoted Mikhail Khodorkovsky, another Russian billionaire, saying he stayed out of that battle and urged those he worked with to do the same because of the ruthlessness of the fight. “There were so many murders, I refused to go into this business,” Khodorkovsky said. According to the Times, many have claimed that Deripaska “engaged in theft, intimidation, bribery and even murder, notably of a Russian banker in 1995,” but that none of those claims has been substantiated.

It seems that Kentucky Governor Matt Bevin was hot to build a new aluminum milling plant, but that the proposed location was not suitable for such a large operation. The cost of finding a new location drained the project's funds. And along came the Volga Bagmen to the rescue.

Enter Rusal, a Russian aluminum company that until just three months ago was barred from doing business in the United States in part because of its ties to Deripaska. The Trump administration lifted the sanctions in January after Deripaska agreed to reduce his ownership stake in the Moscow-based company, the world’s second-largest aluminum manufacturer, from 70% to less than 45%.

But there was Kentucky-specific help needed, too.

And that came only after Senate Majority Leader Mitch McConnell backed that decision despite large numbers of Republicans and Democrats who objected to allowing Rusal and its parent company En+ Group into the United States. The House voted to keep the sanctions 362-53, but the Senate fell three votes short of the 60 votes needed to end a filibuster. McConnell, along with Sen. Rand Paul, voted against the resolution.

Two of the three votes needed to maintain the sanctions against goons like Deripaska came from senators representing a state into which his company was pumping money he'd obtained god knows where or how, and one of whom is the Majority Leader of the U.S. Senate into whose PAC Deripaska's partner dumped $3.5 million between 2015 and 2017. Oddly, one of the stories that has sunk like a stone over the past few years is the story of how much Russian ratfcking money went into Republican campaigns generally over the past few cycles.

Again, nobody knows what the ultimate sources of this money may be, but since Russia is a thoroughgoing thieves' paradise, anybody's guess is as good as anybody else's. But only a fool believes in accidents any more.

https://www.esquire.com/news-politics/po...nell-rand-paul/

So you guys are telling me that politicians in Ky.are corrupt.
As Drennan would say "That's in lighting."

See, AOC is right. If congress just made $4,500/year more, they wouldn't need to be unethical.

Maybe at this juncture in our history being too stupid to be a crook might actually be a good thing.

The real problem here is that it's becoming so common place that people no longer care if anything gets done about it.

People don't care because it is so infrequent that anything is actually done about it.

And as both parties will play it out, I don't actually have to prove that "my people" aren't crooks, I just have to show that they aren't any worse than YOUR crooks.

And there is the bottom line. We should want all crooks to be punished. But the lines are so partisan that nobody does.

There are a few of us in the middle who would like to see about half of both sides tossed out and facing charges...

I still think the biggest way to stop a lot of this is with term limits, it usually seems like the ones who have been around a LONG time that seem to get caught up in this... because they have the seniority, they think they have figured out the system, they have built the relationships, they have the power over junior people, etc...

Congress, especially the house of representatives, was never supposed to be a lifetime employment gig... it was supposed to be ordinary people who wanted to make a difference who went there for a couple terms and then returned to their lives...

I certainly agree with term limits in both the House and Senate.

Crooked politicians created this country,and there has been a long line of bad imitators since.

So your suggestion would be to keep the status quo by ignoring it and avoiding those involved from punishment? I'm just trying to understand what solution you are suggesting to help solve the problem if any.

I haven't seen anything that compares to this level in my lifetime. And at some point as a nation we need to address the problem.

I didn't suggest anything,please don't try to minimize me.
let me tell you about politics.
A friend of mine is a retired FBI field agent here in the valley.
This was his 3rd station way back in the 80's to investigate political corruption.
There was enough corruption here for him to remain assigned,raise his family and finally retire.
After a few beers he'll tell you "the democrats have been good to me and my family".
If I were you,I wouldn't get too comfortable up on that GOP bashing soapbox,because if look closely,that soapbox is rotten to it's core.

McConnell will face the music someday. Mark it down.

Thanks for your suggestion as to what we should do to address the problem.

It probably isn't a good idea for you to wait on me to come up with a solution.
It's Fri.afternoon and I've got problems to solve down at the local tavern.
Doobs or dabs is the first decision.

Yesterday wasn't Friday afternoon.

See, I don't have a problem saying that both sides of the political aisle has their fair share of scoundrels. But what I won't do is use that as an excuse for permitting it to continue. I also won't pretend that we're not seeing a president publicly say he would accept information from foreign governments on his political opponents which is clearly illegal.

I won't ignore that Mueller found 11 cases that clearly indicate obstruction.

We've reached an entire new level of scoundrel here and going to the local tavern or dismissing it as, "Well everybody does it" just isn't cutting it anymore.

If that was directed at me,you're wasting your time.
Oh I'm going to the bar,and I'm going to have some beer and good conversation with a bunch of other no account retired farmers.We'll talk about our ailments,about the weather,about the big boobs behind the bar,but we won't discuss politics.
You see we kinda all feel the same,demacrat and republican.Every damned one of them should be taken out and shot,and then the same fate should befall their replacements.The next group that gets in would have a better understanding of right and wrong.
That would fix the problem.
So instead of wasting time yaking to me,maybe you can take that solution to somebody that could actually get something accomplished.

I'm not the one who is in the political forum posting about having a problem everyone can see that it seems you advocate we sit idly by and do nothing about.

Enjoy your afternoon. I grew up in farm country and have alot of respect for those who do so much and are paying such a high price for it right now.

Yeah, the weather has been terrible around here. Rain, rain, Rain.

I've been reading a lot about that. Combine the weather with the tariffs and their situation is dire.

According to the people I've spoken with, and what I've read (contrary to what the msm reports), the tariff's aren't a huge issue for farmers right now.

Not being able to get in the fields to plant IS.

It's too detailed to get into on a message board - but farmers around here are concerned with the weather, beans or corn, prevent crop, insurance?

Regardless, food prices WILL go up - mainly due to the weather. I know the media will blame Trump, as that's what they do.

As the county ag rep said recently: Crop yields will be lower, but in large part, the lower yields will be offset by the higher prices DUE to the lower yields.

I also enjoy watching a guy by the name of MN millenial farmer on youtube. He's from Minnesota. Huge farmer. He's saying basically the same thing.

I'm not a watcher of the whole country, so I don't know what's going on elsewhere.

The reports I've seen and the farmers I've spoken to all say the same thing. They'll be lucky if they can break even on soy beans due to tariffs alone. The ones I talked to refuse to plant soy beans and have changed the crops they're growing this year because of it.

There's no doubt the weather had added insult to injury and both factors will play a big part of farmers struggles. Heck, soy bean prices have bottomed out so you can't blame a price increase on that.