Chao Failed to Divest Stock, Profiting from Industry She Oversees

Reporting from WSJ Illustrates Transportation Secretary’s Blatant Disregard for Conflicts of Interests

WASHINGTON — For more than a year, Transportation Secretary Elaine Chao has skirted her own ethics pledge, failing to divest her stake in a construction company that lobbies her department regularly. Now, following the promises Chao and others made for passage of an infrastructure deal, the company’s stocks have risen by almost 13%, bringing Chao’s total value in stocks to almost $400,000.

New reporting by the Wall Street Journal shows that Chao violated ethics documents she signed in April 2017 by retaining shares in Vulcan Materials, a company involved in major construction projects and that receives government funding for projects.  

“Trump may have created a new swamp in Washington, but Secretary Chao’s ethics violation is unusual and unacceptable,” said Lizzy Price, spokesperson for Restore Public Trust. “Secretary Chao’s continued stake in Vulcan Materials represents another clear conflict of interest due to its heavy involvement in government-funded projects and the fact they are directly lobbying her department.”

“Chao’s blatant disregard for the established ethics rules is alarming, but not surprising,” continued Price. “Just this year, she’s also continued to collect thousands in compensation from Wells Fargo for her service on their board while the company defrauded millions of consumers.”

Vulcan Materials sells products that are critical to transport infrastructure development, such as road-building and paving, with 45-55% of their shipments used in government-funded ventures. The company shares were paid out to Chao as deferred compensation for the time she served on the company’s Board of Directors. Chao’s ethics agreement said that she would receive a cash payout in April 2018 in exchange for her shares, so that she would no longer be tied financially to the company. However, over a year later, these shares have yet to be relinquished.  

This is the latest in a pattern of Trump administration officials being deceitful and failing to make ethically sound decisions.

For Chao, news of her conflicts with Vulcan follow a long line of problematic behavior while at the helm of USDOT:

  • The culture of the Federal Aviation Administration (FAA) under her leadership has led to failures at aviation giant Boeing.
  • Chao quietly appointed the CEO of a commercial drone developer to lead the Federal Aviation Administration (FAA) Drone Advisory Committee, ignoring clear conflicts of interest.
  • A report from RPT shows USDOT increased spending in Kentucky by more than $11 million under Chao — more than 400-percent increase from the final year of the Obama Administration.
  • Chao claimed nearly 300 hours of private time on her official schedule, the equivalent of seven weeks’ vacation, during her first 14 months as Transportation Secretary.

Just this month, a federal judge approved a $240 million settlement against Wells Fargo representatives including Chao, for shirking their responsibilities while Wells Fargo committed serious consumer abuses.

Earlier this year, Commerce Secretary Wilbur Ross was caught both lying on his personal financial disclosure and lying to Congress about his involvement in the 2020 Census.

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