Transportation Secretary Elaine Chao speaks during a major infrastructure investment announcement in Washington in December.

Transportation Secretary Elaine Chao speaks during a major infrastructure investment announcement in Washington in December. Jose Luis Magana/AP

Transportation Dept. Rebuts Report that Secretary Failed to Divest Stock

Chao’s retention of shares in Vulcan Materials was approved by ethics officer.

The Transportation Department has come down hard on news reports accusing Secretary Elaine Chao of unethically retaining shares in a building materials company on whose board she once served.

The Wall Street Journal on Tuesday reported that Chao’s just-released 2018 financial disclosure form—along with that of her husband, Senate Majority Leader Mitch McConnell, R-Ky.—indicated that Chao received stock shares in April 2018 as deferred compensation from Vulcan, the country’s largest supplier of crushed rock, sand and gravel.

The reporter’s interpretation of the ethics agreement she signed in 2017 was that she had promised to cash out shares and sever ties to the company upon her confirmation by the Senate to join President Trump’s Cabinet. By retaining stock, the Journal wrote, she has seen its value rise by $40,000 over the past year, to more than $400,000.

Chao has recused herself from any decisions affecting the Birmingham, Ala.-based Vulcan, which, if Trump and Congress were to agree on a much-discussed infrastructure spending program, could benefit as a supplier to highway builders.

But in a 2017 letter to the Transportation Department ethics officer that referenced her resignation from the company’s board, Chao said, “Pursuant to the terms of the company’s Directors’ Deferred Stock Unit Plan, I will receive a cash payout for all of my vested deferred stock units in April of the year following the year of my separation from service. The cash payout will be determined based on the closing price of the company’s common stock at the time payment is made that April. Until the deferred stock units are redeemed, I will continue to receive deferred stock unit equivalents, which track dividends on the company’s common stock.”

On Wednesday, a Transportation Department spokesperson told Government Executive in an email that the Journal story “is inaccurate, and we’ve reached out to the editor to have it corrected. Specifically, WSJ wrote ‘she promised to relinquish them’ regarding her Vulcan shares; and, in the headline, that Sec. Chao ‘pledged to divest’. That is not accurate. At no point did Sec. Chao’s ethics letter say she would divest from Vulcan.” 

The Transportation Department stressed that Chao had no control over the form of the payout she announced in advance, and that the language is now being clarified by ethics officials who approved her approach.

 “It is unfortunate that members of the news media have attempted to substitute their opinions for the decisions of senior career ethics officials of the department, who have determined there is no conflict of interest as the secretary remains disqualified from matters directly involving the company mentioned,” the department’s statement continued. “In her ethics agreement, the secretary agreed to resign from her board position and not participate in matters with a direct and predictable impact on Vulcan Materials, which she has followed.”

Chao’s retention of the stock shares drew criticism from Walter Shaub, the former director of the Office of Government Ethics, now an advocate with the nonprofit Citizens for Ethics and Responsibility in Washington. On Tuesday he tweeted:

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.