U.S. DOT’s Chao refutes ethics violations

Cummings’ investigation is also looking into the extent to which Chao was involved in decisions to cut $80 million in supplemental government funding for U.S.-flagged vessels that operate in foreign trades through DOT’s Maritime Administration (MarAd) – cuts he asserted could serve to benefit Foremost Group, which operates foreign-flagged ships exclusively.

However, “the allegation that the Secretary has advocated to deprioritize or reduce funding for DOT programs that benefit U.S.-flagged vessels in foreign trade is not only baseless, but in fact the opposite is true,” Sullivan stated. “Today MarAd has the largest operating budget in its history, in large part due to Secretary Chao’s advocacy and leadership.”

In addition to alleged maritime connections and interests, Cummings’ committee is investigating Chao’s failure to divest $300,000 worth of stock in Vulcan Materials, a major U.S. construction company, before starting her position as DOT Secretary. Sullivan responded that federal ethics officials determined that owning the stock never presented a conflict of interest.

“Moreover, the Secretary was recused from all matters involving the company while she held these stock interests. Although not required by law, the Secretary sold her shares in Vulcan when questions were raised and no longer has any financial interest in the company.”