Elaine Chao inspector general report: Ethics concerns led to criminal referral

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Investigators noted a range of potential issues. The report said Transportation Department staff were told to help promote the elder Chao’s biography and to maintain a list of his awards. It also noted evidence that the department’s former director of public affairs drafted and launched a media and public relations strategy to build his profile.

Chao also tapped public employees for personal tasks such as arranging Christmas ornaments, investigators said.

The U.S. attorney’s office “stated that there may be ethical and/or administrative issues to address but there is not predication to open a criminal investigation,” investigators from the Inspector General’s office said.

The IG’s office also said it had looked into allegations that Chao had improperly steered resources to Kentucky, which her husband, Senate Minority Leader Mitch McConnell (R) represents in the Senate, but did not find evidence of that.

Chao and her supporters pointed to areas where the inspector general did not find wrongdoing as an endorsement of her approach to governance.

“This report exonerates the Secretary from baseless accusations and closes the book on an election-year effort to impugn her history-making career as the first Asian American woman appointed to a President’s Cabinet and her outstanding record,” a Chao spokesman said in a statement.

The spokesman declined to respond to the potential ethical problem areas identified by the inspector general, instead pointing to supportive comments from Republicans in Congress, including Rep. James Comer (R-Ky.), who said in a statement that the report “makes clear the Democrats’ partisan attacks launched against former Secretary Chao are baseless.”

Investigators described a series of potential ethical issues.

As secretary, for example, Chao instructed political appointees to contact the Department of Homeland Security about “the status of a work permit application submitted by a foreign student studying at a U.S. university who was a recipient of Chao family philanthropy,” according to investigators.

Investigators said Chao used the staff time of department employees for personal matters.

Among them, according to a description from investigators, was Chao emailing a staff member in her office with the subject line: “Xmas ornaments.” The email directed the staff member to “sort out and fedex on Monday to Dr. Chao, and my sisters. Please draft a cover note — let me see it-telling them what we are sending.”

Investigators also raised concerns about Chao appearing jointly on videos with her father.

One such video raised particular concerns “because it featured the Secretary talking about official matters such as the Administration’s priorities for transportation as well as commentary about the written biography of her father,” according to a letter from Deputy Inspector General Mitch Behm to Rep. Peter A. DeFazio (D-Ore.), chairman of the House Transportation Committee. DeFazio was among those in Congress who asked for the investigation.

He commended the Office of Inspector General for its review but said that he was disappointed it was not released while Chao was in office and that the Justice Department did not pursue the matters.

“Public servants, especially those responsible for leading tens of thousands of other public servants, must know that they serve the public and not their family’s private commercial interests,” DeFazio said in a statement.

Rep. Carolyn B. Maloney (D-N.Y.), chairwoman of the House Oversight Committee, had also requested the investigation.

The inspector general’s report and other documents obtained by congressional investigators “demonstrate that Secretary Chao used her official position and taxpayer resources for the benefit of herself and her family,” Maloney said in a statement. “Secretary Chao’s flagrant abuse of her office provides further evidence that additional ethics and transparency reforms are needed.”

The Office of Inspector General said Chao, given the chance to respond to the ethical concerns, pointed to a memorandum drafted by the Transportation Department’s general counsel, Steven Bradbury, and provided to investigators.

The September 2020 memo was titled “The Importance of Asian Cultural Values to the Success and Effectiveness of Secretary Elaine L. Chao.” Investigators said it was written by Bradbury and reviewed by Chao and two other department staff members.

“As the eldest daughter, she is expected to assume a leadership role in family occasions that honor her father and her late mother,” the memo reads. If she neglected to mention her one living parent “her reputation and stature as a government official would be diminished considerably in the eyes of many Asians and Asian Americans.”

Bradbury, according to investigators, said that “Secretary Chao cannot be divorced from her father’s story and that this concept is important to keep in mind, but does not excuse all of the issues…



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