Report: Elaine Chao still owns shares in stock she promised to divest

Report: Elaine Chao still owns shares in stock she promised to divest
© Greg Nash

Transportation Secretary Elaine ChaoElaine ChaoThe Hill's Morning Report - Biden on COVID-19: Next year Americans will be 'better off' Buttigieg sets goals for electric, automated freight vehicles Ben Carson launches conservative think tank MORE reportedly still owns stock in a construction company that she previously promised to divest from upon taking office.

The Wall Street Journal reported Tuesday that federal disclosure forms show Chao to be the owner of nearly $400,000 worth of stock in Vulcan Materials Co., a major supplier of materials for road pavement and other construction projects, more than a year after she promised to trade the shares for a cash payout.


The cash payout has yet to occur, the Journal reported. A spokesman for the Department of Transportation (DOT) told the newspaper that the language of an ethics agreement signed in 2017 stating that the exchange would occur in April of 2018 “is being clarified to avoid confusion.”

A top ethics official at the agency has determined that the shares do not present a conflict of interest, the spokesman continued, because Chao has recused herself from all issues related to the company.

Vulcan's spokesman added to the Journal that the shares currently held by Chao were paid to her as part of the company's standard policy for former board members. Chao served on Vulcan's board of directors for two years.

“All DSUs [deferred share units] have been paid out in accordance with the provisions of Vulcan’s director compensation plan,” the spokesman told the Journal. “We are not commenting further on this.”

Walter ShaubWalter Michael ShaubEthics experts ask Senate to investigate Graham's probe of mail-in voting Interior 'propaganda' video and tweets may violate ethics laws, experts say Louisiana House candidate fundraises off opponent's tweet about wife's 'premonition' dream MORE, a former director of the Office of Government Ethics, told the newspaper that he believes Chao's failure to divest from her holdings in the company sent a message to other DOT staffers that ethics were not a major priority at the agency.

“If you look at her ethics agreement, it provides for a complete disentanglement of her interest from Vulcan Materials, and that’s what was represented to the Senate,” he reportedly said. “For the head of the DOT to have a financial interest in an asphalt company, that is not sending a message to employees of DOT that she is making ethics a priority.”

A spokesperson for DOT told The Hill in an email that members of the media who attacked Chao's decision to keep the stock were substituting their bias for the opinions of the agency's ethics officials.

“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 spokesperson said.

"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," they added.