In at least a dozen interviews with Chinese and Chinese-American media outlets since her nomination, Transportation Secretary Elaine Chao has appeared beside her shipping magnate father, whose company carries goods between the United States and Asia, and who has given Chao and her husband at least $5 million in the past 10 years.
In many of the videos, James Chao is introduced as founder and chairman of the Foremost Group shipping company, and, in discussing a 2016 biography about his life, speaks proudly of his daughter’s role as secretary of transportation, as she sits beaming by his side.
One interview with New China Press published on April 12, 2017, features the pair sitting in what appears to be the Department of Transportation, with DOT flags in view behind the interviewer. Long portions of the interview are in Chinese, with James Chao talking about his life story, with a copy of his biography on the screen, and Elaine Chao extolling her father’s success story as “lifting the status of Asian-Americans in America.” She also touts his $40 million gift to Harvard University.
The appearances raise ethical concerns, experts say, because public officials are legally banned from using their office for any form of private gain for themselves or others. In the videos, James Chao, who has four other living daughters, sits beside the transportation secretary while discussing the family business — which has expanded in recent years and relies in part on Asian and Asian-American customers — and his 2016 biography, which touts him as a business success and philanthropic leader.
Foremost Group is a family enterprise, with Elaine Chao’s sister Angela serving as CEO and her sister Christine as general counsel. James Chao, in the videos, cites Elaine’s work as a college student helping to build up the business. In one video, which appears to have been made as a Lunar New Year greeting, a seated James appears with Elaine and Angela to wish viewers a “happy, healthy, safe and successful new year in the upcoming Year of the Dog.”
Experts in government ethics said Elaine Chao’s media appearances with her father might violate a regulation that prohibits federal employees from using their public office for their “own private gain, for the endorsement of any product, service or enterprise, or for the private gain of friends, relatives, or persons with whom the employee is affiliated in a nongovernmental capacity.”
“She needs to be careful when she appears that, say, the seal of the Department of Transportation doesn’t appear on the screen,” said Kathleen Clark, a government and legal ethics expert at the Washington University School of Law.
Not only do the DOT flags appear prominently in the New China Press interview and several other interviews, the state flag of Kentucky appears in at least one, which points up her connection to her powerful husband, Senate Majority Leader Mitch McConnell (R-Ky.).
Hana Callaghan, director of government ethics at Santa Clara University’s Markkula Center for Applied Ethics, said since public officials “have a duty to maintain and preserve trust in government,” they are obligated “to avoid even the appearance of impropriety.”
That means they shouldn’t “promote one business over another,” she said.
“What troubles me about [Secretary Chao’s actions] is perhaps it may appear that a person in her situation is using her office and her position in order to publicize her father’s book, or this book about her family,” Callaghan said. “That’s not a public purpose.”
Through her spokesperson, Elaine Chao declined a request for an interview.
A senior DOT spokesperson declined to provide any details on Chao’s appearances on Chinese-language media, including about her apparent use of her government office to make the videos.
The spokesperson suggested Chao is simply meeting the high demand from Asian media outlets for interviews with her, because she is the first Chinese-American, and the first Asian-American woman, to hold a U.S. Cabinet position, having earned that distinction when she became labor secretary in the George W. Bush administration.
“She and her family are the focus of [Asian-American] human interest pieces in print and broadcast media,” the spokesperson wrote in an emailed statement. “These articles touch upon their immigrant journey and their success assimilating in the United States, their philanthropic activities and their success in business and government. The articles are motivational and not promotional in any form.”
“There is nothing inappropriate with a Cabinet member appearing with her father or other family members,” the spokesperson added. “The secretary’s appearances are intended to share an inspirational story about immigrants from a minority community who have become successful in our country.”
DOT spokespeople added that James Chao does not receive any royalties from the sales of his biography.
Nonetheless, specialists in Chinese and Asian business practices say that having the owner of a family shipping business seated next to a daughter who is U.S. secretary of transportation sends a message that Foremost Group has high-level government connections — an important credential in China.
“Doing business in China requires a lot of connections,” said Diane Wei Liang, an author and a commentator on Chinese business, politics and culture. “Political connections are normally considered as real advantages for business people. Any business that can demonstrate these kinds of connections sends a very positive message as to how successful the business is and how effective it would be to work with them.”
Stanley Kwong, a professor of international management and marketing at the University of San Francisco, added that the appearance of government ties “will open up doors” in Chinese business circles.
The Chao family’s connections to the Chinese-American community were also on display in February, when Secretary Chao used the multi-level atrium of the relatively new DOT headquarters building — a large entertainment space — to hosta Lunar New Year party for more than 400 guests, according to a list of scheduled attendees. That list showed less than 10 percent were DOT employees; the vast majority were from the Asian-American business community, including leaders from Chinese and Taiwanese chambers of commerce from cities around the United States.
DOT spokespeople declined to comment on how much government funding was spent on the party, a business-attire affair that included Chinese food and for which many guests traveled from New York City and beyond. The spokespeople also rejected any suggestions of impropriety, insisting that the party was in the same vein as other ethnic celebrations the agency typically hosts, such as Asian-Pacific Heritage Month and Hispanic Heritage Month. They said the guest list was developed with input from the DOT Management Office, the DOT Asian-Pacific American Employees Council, and the White House Presidential Advisory Commission on Asian Americans and Pacific Islanders.
However, a DOT employee who has worked at the agency through multiple administrations said the celebrations DOT is referencing typically are for DOT employees and not primarily for outside guests.
According to DOT spokespeople, Secretary Chao’s father and sister were not present at the gathering. But, to Liang, it still conveyed a message of what she calls the Chaos’ “connectability.”
“In China, business, politics, everything is connected,” she said.
In many of the video interviews at his daughter’s side, James Chao talks with pride about her government work and contacts. In the interview with New China Press, the Chaos talk about traveling with President Donald Trump on Air Force One.
“The president spent several minutes with me,” James Chao said. “We were talking about business.”
The Foremost Group was founded by James Chao, an immigrant from Taiwan, in 1964. It celebrated its 50th anniversary in 2014, but is now appears to be engaging in a brisk period of expansion. Before Trump’s inauguration in January 2017, it had 23 registered ships but since then has added 10 — more than a 40 percent increase in capacity — according to IHS Global ship registry information.
Through Foremost Group’s public relations firm, Angela Chao declined multiple requests for comment. The public relations firm also declined to provide data about the company, referring only to the portion of its website which states that the company’s fleet “is approximately 5 million metric tons deadweight, transporting more than 15 million tons of goods per year” and that it “serves blue-chip clients around the world.” The site also says, “Foremost charters its ships out to some of the leading companies in the world, and it is the charterers who determine what cargo the ships carry and where they load and discharge.”
Elaine Chao’s financial disclosure form makes no mention of any previous employment with or ownership of the Foremost Group.
But in a joint father-daughter interview with the Shanghai Media Group that was recorded between Elaine Chao’s confirmation hearing and the president’s inauguration, James Chao talked about her work to build up the company.
“While my other daughters started working at my company after they graduated from college, Elaine did so while she was still at school, during summer breaks,” Chao said. “My company was rather small then. In order to reduce costs, she helped me with my business. But what’s special about it was that she came to the office consistently and handled a very big project during the summer. She was a big asset to our company. She put everything in order and did an excellent job.”
James Chao has shared his financial success with his daughter. In April 2008, Elaine Chao and her husband received a large gift from her father in honor of her mother after her death. According to McConnell’s financial disclosure forms, the size of the gift was between $5 million and $25 million, contributing to a seven-fold increase in his wealth over a 10-year period.
In an interview without Elaine Chao present, posted on Angela Chao’s YouTube channel, James Chao spoke to a Sinovision reporter in the Foremost Group corporate office in New York about how proud he was of Elaine’s nomination to be secretary of transportation. “Many people in the transportation industry wanted her to become the secretary of transportation,” James Chao said in the interview, which occurred during the presidential transition period.
Elaine Chao’s new position also coincided with Angela Chao’s ascension to the board of directors of the Bank of China, which she joined in January 2017. She was elected to the board before Elaine Chao was nominated to head DOT.
As secretary, Elaine Chao maintains a tight control on inside-the-Beltway media appearances. She has never held a news conference for beat reporters and routinely demurs when reporters attempt to speak with her after public events in Washington, D.C.
But she has been generous with Chinese outlets in appearances in which she extensively praises her father’s life, work and philanthropy.
In the interview with Shanghai Media Group, James Chao spoke about his “amazing life journey” and “the secrets of raising outstanding children,” in the words of the interviewer, and Elaine Chao depicted her own success as “a milestone for Asian-Americans.” The interviewer noted that during her confirmation hearing, senators sent regards to her father when questioning her. “I talk about my father a lot and my family a lot, and they admire my family tremendously,” Elaine Chao said. Copies of James Chao’s biography were stacked on the table beside the host.
In other appearances filmed since her confirmation as secretary, Chao appears beside her father, calling her parents “trailblazers” and praising their philanthropy, the way they taught their children to set and achieve goals, and the courage they displayed during their harrowing migration to the United States.
James Chao’s biography, Fearless Against the Wind, was released in October 2016, less than a month before his daughter was nominated to be transportation secretary. It is available only in Chinese. Her promotion of the book via Chinese media appearances seems to have begun before her nomination.
In December 2016, Chao spoke at a news conference for her father’s book, saying it was the first time she’d spoken in public since the announcement of her nomination, and that it would be the last until her confirmation hearing. “The purpose of today’s talk is to talk about my father’s journey,” she said, referring explicitly to the book and recognizing its publisher and author.
In one brief video clip from May 2017 that appears to have been filmed at DOT, James Chao is the only one who speaks, entirely in Chinese. He introduces himself as the chairman of Foremost Group and says, “I bring my daughter, Elaine Chao, along with the rest of my family” to congratulate Jiangsu Province on its first development conference.
Clark, the ethics professor, said Chao’s behavior appears “consistent with other things we’ve seen in the Trump administration, with the blurring of the public/private line, the exploitation of a government authority to promote the enterprise of a family member.”
“There’s a through line from the White House,” said Clark. “A kind of nepotism. I’m not talking just about the hiring of relatives, but bringing relatives in or acting in a way that could enrich relatives — we’ve seen this in the White House; we’ve seen this at Housing and Urban Development and now … at the Department of Transportation.”