Trump’s Transport Department Chief Cited for Questionable Ethics by Watchdog

(Bloomberg) -- The Transportation Department's watchdog concluded last year that then-Secretary Elaine Chao may have violated ethics rules and requested an investigation by the Justice Department, then run by Trump appointees who declined to pursue the case.

Chao attempted to include members of her family, who run a shipping line, on an official government trip in apparent violation of ethics rules, a report by the department's Inspector General found.

“We concluded that a formal investigation into potential misuses of position was warranted,” Mitch Behm, the Transportation Department's deputy inspector general, said Tuesday in a letter to House lawmakers accompanying the 38-page report, which concluded that other allegations had no basis.

The findings were referred in December, during the last days of the Trump administration, to the U.S. attorney's office in Washington as well as the Justice Department's Public Integrity Section, according to the report, which was released Wednesday. Both offices declined to prosecute, the report said.

Jeffrey Rosen, a former deputy DOT secretary under Chao, was Attorney General William Barr's top deputy at the Justice Department when the agency declined to prosecute. Days before the decision on her case, Trump had announced Rosen would be taking over for Barr.

Chao, the wife of the Senate's Republican leader, Mitch McConnell, resigned in January shortly after the U.S. Capitol was stormed by supporters of then-President Donald Trump.

Read More: Chao Quits Trump Cabinet as Resignations Quicken in Wake of Riot

According to the report, she attempted to include family members -- who operate Foremost Group, an international shipping firm -- in a trip to China planned for November 2017. Her participation in the trip was later canceled. Her father, James Chao, is Foremost's founder.

She also assigned political appointees in her office to check with another government agency about the prospects of obtaining a work permit for a student who'd received assistance from her family's philanthropy, the report said.

Chao assigned members of her public affairs office, the report found, to work with her father, who was not a department employee. She also used department resources and staff time for tasks “that appear to be personal in nature,” it said.

A statement from Chao's office called the accusations baseless and said the report exonerates her. Joshua Stueve, spokesman for the Justice Department's criminal division, declined to comment in an email. Rosen didn't immediately respond to an email seeking comment Thursday.

“Public servants, especially those responsible for leading tens of thousands of other public servants, must know that they serve the public and not their family's private commercial interests,” said Representative Peter DeFazio, the Oregon Democrat who is chairman of the Transportation Committee. He and Representative Carolyn Maloney, a New York Democrat and chairwoman of the Oversight and Reform Committee, had sought the inspector general investigation.

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