The House Oversight and Reform Committee wrote Chao two weeks ago, saying it had launched an investigation into her and was seeking records. The committee’s Democratic leaders said they were troubled by media reports that questioned whether Chao was mixing her family’s private business with her official duties.
The House committee cited reports in the New York Times, Politico and the Wall Street Journal in support of a sweeping request for 18 categories of records to do with Chao and her department’s interactions with her family’s business and her own ethics disclosures.
But in a letter to committee chairman Rep. Elijah E. Cummings (D-Md.) Monday, the Transportation Department rejected allegations that Chao had taken actions to benefit her family’s shipping company, Foremost Group; had sought to boost her father’s public image; and had a conflict of interest because of stock holdings in a construction materials company.
Adam Sullivan, the Transportation Department’s assistant secretary for governmental affairs, wrote that he “appreciates the opportunity to correct the record.”
Chao’s father and sisters own Foremost Group, a New York-based shipping company that carries goods between the United States and China and that has received low-interest loans from the Chinese government to buy ships. The committee said the news reports indicate Chao has used her position to bolster the company’s standing in China.
Sullivan wrote there were no grounds for Democrats’ concerns.
“The allegation that the Secretary has used her official position to benefit her family’s business is simply false,” Sullivan wrote. “Of course, the Secretary is not involved with the management or operations of Foremost Group and has no financial stake in the company. Nor does the Department of Transportation regulate, promote, or benefit its business financially.”
The Democrats’ letter also cited reports that Chao had appeared alongside her father and the Transportation Department’s seal in interviews with Chinese media, and that her father had boasted about Chao’s access to President Trump.
Sullivan wrote Monday that reports raising questions about the interviews had “xenophobic undertones.”
“There is nothing new or nefarious about the fact that Secretary Chao is a role model for immigrants from Asia,” Sullivan wrote.
The House committee is also seeking information about Chao’s disclosure of holdings in Vulcan Materials Group, a construction materials firm on whose board she previously sat. Chao sold the shares days after the Wall Street Journal reported in March that she continued to hold them.
Sullivan wrote that government ethics officials considered the questions over the stock holdings “closed.” A Transportation Department ethics official “determined that these stock holdings never presented a conflict of interest,” Sullivan wrote.
Even as he pushed back against the basis for the investigation, Sullivan wrote that the Transportation Department planned to respond to the request on a rolling basis.
Sullivan’s letter did not address questions the committee raised about a trip Chao planned to China in 2017 that the New York Times reported was canceled because State Department officials were leery of her efforts to include family members in meetings.
Aryele Bradford, a spokeswoman for committee Democrats, said the department’s response Monday contained only “generic denials” and “failed to produce the majority of documents the Committee requested relating to these troubling ethics allegations.
“The Committee expects Secretary Chao to produce all of the documents in an expeditious manner and looks forward to her full cooperation in this investigation,” Bradford said.