Elaine Chao's Family May Present A Conflict

by Cate Carrejo

Donald Trump's latest cabinet choice appears at first glance to be one of his less controversial, but she may actually have a serious conflict of interest in her new position. Former Labor Secretary Elaine Chao's family owns a massive international shipping corporation, which will fall directly under her purview as the newly appointed Secretary of Transportation, adding to the president-elect's woes about ties to the business world. Although it once again raises questions about ethical politics, Chao's potential conflict of interest may not actually be worth worrying about.

Trump's official statement on Chao's appointment praised her experience: “Secretary Chao’s extensive record of strong leadership and her expertise are invaluable assets in our mission to rebuild our infrastructure in a fiscally responsible manner. She has an amazing life story and has helped countless Americans in her public service career. I am pleased to nominate Elaine as Secretary of the Department of Transportation.”

The Chao family owns multiple high-profile businesses, but the one calling Chao's cabinet position into question is the Foremost Group, an international shipping company started by her father, James S.C. Chao. As secretary of transportation, Chao would oversee the regulation of the United States' maritime resources, and possibly be able to bend federal regulations to accommodate her family's business. For example, one of the largest DOT contractors is Crowley Maritime Corporation (to the tune of $888,514,329). Awarding that contract to Foremost Group instead would clearly be a problem.

But that's unlikely to happen, mostly because it didn't happen under any of Chao's former positions. She's served as the Deputy Administrator of the Maritime Administration, Chairman of the Federal Maritime Commission, and Deputy Secretary of the Department of Transportation without any big issues. There's no reason to suspect that anything will be different this time, or that Chao will be any less of a dedicated public servant.

Potential conflicts of interest of this nature are particularly difficult to judge, because the concern of too much influence and insider knowledge in this area is exactly what could help Chao do a really great job. Along with her extensive professional experience within the DOT, Chao has personal knowledge of the concerns of business owners within the shipping and manufacturing industries, which could help businesses become efficient and ultimately help consumers. Her understanding of the industry and the bureaucracy that regulates it should make her uniquely qualified, not disqualified, for the position.

Though Trump's questionable business practices have primed people to think that any connection to the business world will automatically result in unethical behavior, that shouldn't necessarily be the first reaction. Theoretically, any high-level public servant could abuse their power to somehow profit in the field which they oversee — the American people trust them not to, and trust Congress to hold them accountable if they do. Chao's family connection shouldn't be a deciding factor, and given her long, steadfast service within the federal government, you probably don't need to worry too much about it.

Clearly, conflicts of interest between business and politics haven't bothered people much this election cycle. Chao served President Bush for his entire presidency as labor secretary without invoking too much criticism about conflicts of interest — just the standard partisan objections. While her purview under this Cabinet position may arguably cause more reason for scrutiny, it seems destined not to make a difference, nor ultimately to cause any real problems.