Chao’s interviews with father raise ethical flags
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.
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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 host a 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.”