Elaine L. Chao, U.S. Secretary of Transportation, awaits in front of an art project during a meeting in Leipzig main station in the context of the International Transport Forum in Leipzig, Germany, May 22, 2019.
Matthias Rietschel/Reuters

Yet another Trump cabinet secretary faces ethics questions


Donald Trump and much of his cabinet have faced all kinds of investigations and controversies, but there’s one area that’s been especially problematic: officials with divestment troubles.

Obviously, the president’s private-sector holdings are a point of ongoing concern (and litigation). There’s also Commerce Secretary Wilbur Ross, who falsely told the federal Office of Government Ethics that he’d divested from a series of investments. Treasury Secretary Steven Mnuchin promised to divest from his film company, though he sold his interests to his wife.

Today, the Wall Street Journal put the spotlight on Transportation Secretary Elaine Chao, who appears to be facing related concerns.

Transportation Secretary Elaine Chao has retained shares in a construction-materials company more than a year after the date she promised to relinquish them, federal disclosure forms show.

Shares of the company, Vulcan Materials Co. , the country’s largest supplier of the crushed stone, sand and gravel used in road-paving and building, have risen nearly 13% since April 2018, the month in which Ms. Chao said she would be cashed out of the stock, netting her a more than $40,000 gain, corporate and government filings show.

The shares, now worth nearly $400,000, were paid out to Ms. Chao in April 2018, as deferred compensation for the roughly two years she served on Vulcan’s board of directors before being confirmed as secretary of transportation, the company said.

Chao, one of the original members of Trump’s cabinet, signed an ethics agreement two years ago recusing herself from matters related to Vulcan Materials, despite maintaining a financial stake in the company.

From the cabinet secretary’s perspective, she effectively had no choice: Chao served on the company’s board and this is how its members are compensated. As the argument goes, the fact that a Transportation secretary benefited financially from her stake in a transportation company – during her tenure – is an unfortunate coincidence, addressed through her recusal.

That said, as the WSJ report added, Chao’s approach “stands in contrast to the way previous transportation secretaries have handled potential conflicts of interest.”

For instance, former Transportation Secretary Ray LaHood, who served under President Barack Obama, sold stakes in Caterpillar Inc. and Ford Motor Co. upon being confirmed to lead the department.

“I basically sold everything,” Mr. LaHood said. “The ethics police told me to do it, so I did it.”

Jeffrey Rosen, who was Ms. Chao’s top deputy before becoming deputy attorney general, sold stakes in 16 companies upon joining the DOT, including Chevron Corp. , United Technologies Corp. and Home Depot Inc., according to ethics filings.

Federal Railroad Administrator Ronald Batory canceled stock awards from Consolidated Rail Corp., his previous employer, and sold his shares in Norfolk Southern Corp. and Union Pacific Corp. upon his confirmation to the job.

Walter Shaub, who headed the Office of Government Ethics until July 2017, told the newspaper that Chao’s approach was apparently legal, though it didn’t “send a message to employees of DOT that she is making ethics a priority.”

It’s part of a larger pattern in which leading Trump administration officials have faced an avalanche of ethics controversies over a fairly brief period of time.

Historian Kevin M. Kruse joked this morning, “If you’d told me in January 2017 that the Trump Cabinet member who’d have the least controversial tenure would be Rick Perry, I’d never have believed you.”