Not
enough has been made of Elaine Cho, her family, Mitch McConnell and the undeniable
ties to Communist China.
This how Moscow Mitch got rich.
In the
heart of the Great Recession, Mitch McConnell suddenly got richer. According to
his 2009 financial disclosure, while other senators’ fortunes were falling,
McConnell’s jumped, thanks to a multimillion-dollar gift from his
father-in-law, James Chao, to him and his wife, Elaine Chao, who now serves as
President Trump’s Secretary of Transportation.
When Ruth
Chao died, she was the matriarch of a family of eight. Four decades earlier she
and her three oldest daughters traveled by ship from Taiwan to the U.S. to join
her husband, James, in New York. By the end of her life, she personally had
nearly $59 million of assets to her name, according to an inventory filed with
her will. She owned a home 25 miles north of Manhattan in Harrison, New York,
worth $1.17 million; checking and money market accounts worth a combined
$50,900; a 2006 Lexus sedan worth $23,000; miscellaneous personal property
worth $25,000; and a “closely held business interest”—worth $57.5
million.
For the Chao Family, Deep Ties to the World’s 2
Largest Economies
As transportation secretary,
Elaine Chao
is the top Trump official overseeing the
maritime industry. Her family owns
Foremost Group, a shipping company.
Credit...Sarah Silbiger/The
New York Times
By Michael
Forsythe and Eric Lipton
https://www.nytimes.com/2019/06/02/us/politics/transportation-secretary-elaine-chao.html
The family of Elaine Chao, the transportation secretary and wife of Mitch McConnell, the Senate majority leader, has high-level political connections not only in the United States but also in China. That gives the family unusual status in the world’s two largest economies.
Through interviews, industry filings and government documents from both countries, The New York Times found that the Chaos, and by extension Mr. McConnell, prospered as the family’s shipping company developed deeper business ties in China. Along the way, one of the company’s boosters was Ms. Chao, who now oversees efforts to promote America’s own maritime industry, which is in steep decline as China’s shipping sector rises in global dominance. Here are five takeaways.
The Chao family’s connections to the Chinese
state go back decades.
James S.C. Chao, 91, Ms. Chao’s father, studied
navigation at a university in Shanghai before fleeing the mainland ahead of the
Communist takeover in 1949. His schoolmate for a time was Jiang
Zemin, who would become China’s president.
As China was emerging from decades of turmoil in 1984, the Chao family took a stake in a state-owned Chinese manufacturer of marine electronic equipment, documents show. The company targeted sales to China’s military, among other sectors, and was closely affiliated with a ministry run by Mr. Jiang. After Mr. Jiang came to lead the Communist Party a few years later, Mr. Chao met with him at least six times, including in August 1989 in Beijing — inside the party’s secretive leadership compound. Chao family members said they could not recall this investment.
The family shipping company is centered on China.
The main gate of the Shanghai
Waigaoqiao shipyard, a building
site for Foremost ships.
Credit...Giulia Marchi for The New York Times
Foremost Group, the New York-based shipping company founded by Mr. Chao in 1964, landed its first big contract with the United States government, shipping rice to Southeast Asia during the Vietnam War.
Now, it builds most of its ships in state-owned shipyards in China, with some financed by Chinese government loans. In at least two instances, those Chinese-backed, Chinese-built ships entered long-term contracts to deliver iron ore for a state-owned steel maker.
More than 70 percent of Foremost’s freight goes to China, and most of that is iron ore, according to recent shipping data. The cargo helps feed China’s industrial machine, which manufactures steel products that are a point of dispute in the deepening trade war between China and the United States. The company describes itself as a small international business and says it does not have a particular focus on China, beyond what most dry bulk carriers have in a world dominated by Chinese manufacturing.
As budget cuts have targeted America’s shipping sector, the Trump administration’s commitment under Ms. Chao has been questioned.
The Trump administration has left little doubt that the federal government is willing to use its clout to boost certain American industrial sectors, including coal and steel. Those efforts have not extended to the maritime industry under Ms. Chao’s leadership.
The Transportation Department budget during her tenure has repeatedly called for cuts for programs intended to support the depressed system of American-flagged ships. The agency budget has also called for scaling back plans to replace up to five academy ships to train a new generation of American mariners.
Agency officials noted that many of the cuts were forced on the department by the White House, and that some of the same programs had been previously targeted, only to see the money restored by Congress, as happened again with the Trump cuts.
With the action by Congress, the plans to build the new training ships are now back on track, and overall maritime spending is up. But the proposed cuts have led to bipartisan questions about the Trump administration’s commitment to shipping.
Transportation Department officials say that Ms. Chao has been a champion for the United States maritime system, and that her actions as the head of the agency have nothing to do with her family’s business in China. In China, the Chao family has for decades offered scholarships to students training to join the fast-growing shipping industry there.
“My family are patriotic Americans who have led purpose-driven lives and contributed much to this country,” Ms. Chao said in a statement.
Ms. Chao’s family ties to the shipping company
and her dealings in China raise ethical issues.
A certificate being presented to Ms. Chao
in her role as an international adviser to
the city of Wuhan.
Credit...Imaginechina, via Associated Press Image
Ms. Chao hasn’t held a formal position at
Foremost since the late 1970s, but she has repeatedly used her connections and
status to boost the company’s reputation and visibility.
As transportation secretary, she attended a Foremost contract-signing ceremony in New York in 2017. The other party to the contract, the Sumitomo Group of Japan, was subject to Transportation Department oversight for transit projects. Two months later, she canceled a China trip after officials at the American embassy in Beijing raised ethical concerns when her office asked to have family members from the shipping company participate in events.
The Transportation Department provided no reason
for the trip’s cancellation, though a spokesman later cited a cabinet meeting
President Trump had called at the time.
At her confirmation hearing, Ms. Chao did not
mention her family’s extensive ties to the Chinese maritime industry. She also
did not disclose several accolades she had received in China — including a role
as an international adviser to the city of Wuhan — though the Senate
questionnaire requires nominees to list all honorary positions. An agency
official described that as an oversight.
Marilyn L. Glynn, a former general counsel at the Office of Government Ethics, said Ms. Chao should recuse herself from decisions that broadly impacted the shipping industry. “She might be tempted to make sure her family company is not adversely affected in any policy choices, or it might even just appear that way,” Ms. Glynn said.
The department spokesman denied the existence of any conflict, saying that “the family business is not in U.S.-flag shipping.” Angela Chao, Foremost’s chief executive, said her sister Elaine attended Foremost events “as a family member.”
Mr. McConnell benefited from his marriage into
the Chao family.
Ms. Chao and Mr. McConnell married in 1993, but her campaign donations, along with those of her parents, sisters and brothers-in-law, began flowing years before the wedding. The first $10,000 came in June 1989. In the 30 years since, 13 members of the extended Chao family have given a total of more than $1 million to Mr. McConnell’s campaigns and to political action committees tied to him. In 2008, James Chao gave the couple a gift of as much as $25 million, vaulting Mr. McConnell into the ranks of the richest senators.
In a statement, Mr. McConnell said he was proud
to have his family’s support.
Also see:
https://en.wikipedia.org/wiki/Elaine_
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