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US DOT head probed for alleged abuse of power to benefit relatives

US Department of Transportation (DOT) Secretary Elaine Chao is to be investigated by the US House of Representatives' Committee on Oversight and Reform in relation to allegations that she used her office to benefit herself and her family's ties to maritime shipping

US DOT head probed for alleged abuse of power to benefit relatives

US Department of Transportation (DOT) Secretary Elaine Chao is to be investigated by the US House of Representatives' Committee on Oversight and Reform in relation to allegations that she used her office to benefit herself and her family's ties to maritime shipping

19 September 2019 - 19:06

US Department of Transportation (DOT) Secretary Elaine Chao is to be investigated by the US House of Representatives' Committee on Oversight and Reform in relation to allegations that she used her office to benefit herself and her family's ties to maritime shipping.

The investigation by US lawmakers cites several news reports published earlier this year by the New York Times and others that Ms Chao has used her position as head of DOT to benefit Foremost Shipping Group, which operates a fleet of foreign-flagged ships used to transport bulk goods and materials such as grain, iron ore and coal, and is headed by her sister Angela.



In a September 16 letter to Ms Chao, committee chairman Elijah Cummings asserts that the reports suggest that Ms Chao was in a position to 'elevate Foremost Group's status with the Chinese government, which extended hundreds of millions of dollars in low-interest loans' to Foremost to make ship purchases, reported New York's FreightWaves.



'In addition, you have appeared alongside your father (James Chao), the founder of Foremost Group, in at least a dozen Chinese media interviews - many of which were behind the official seal of the Department of Transportation,' the letter states. 'During some of these interviews, your father touted your influence within the United States government and boasted about his access to President Trump on Air Force One.'



Mr Cummings' investigation is also looking into the extent to which Ms Chao was involved in decisions to cut funding for DOT programmes that benefit US-flagged vessels that operate in foreign trades that could benefit Foremost Group, which operates foreign-flagged ships exclusively.



The letter outlines DOT's budget requests in 2018 and 2019, which sought an US$80 million cut from the government's Maritime Security Programme, which subsidises 60 US-flagged commercial vessels that are on-call for use by the Department of Defense as needed for sealift capacity. DOT also requested 'millions of dollars' in cuts for federal grants and loans for US shipyards and shipbuilders, according to the letter.



'Given the decline in the number of US-flagged vessels in foreign trade, DOT's approach to these programmes may threaten national security by increasing the likelihood that our military will be dependent on foreign-flagged vessels during times of war or emergency.'



In addition to her maritime connections and interests, Mr Cummings' committee also wants to investigate Ms Chao's failure to divest her ownership in Vulcan Materials, a major US construction company, before starting her position as DOT Secretary. Ms Chao, who was sworn in on January 31, 2017, did not divest her 3,000 shares of common stock, worth $300,000, until June 2019, after news reports of her failure to divest, according to the letter.


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