Even as Donald Trump has spent the day frantically tweeting angry and defensive rhetoric about Puerto Rico and other controversies, he has yet to address the exploding scandals within his own cabinet. It’s already prompted last night’s resignation of HHS Secretary Tom Price, and at least four other cabinet members have been caught in similar infractions. But the next cabinet member to resign may be due to a different kind of financial scandal: Transportation Secretary Elaine Chao.
Chao is best known for three things. 1) She was embroiled in a drug shipment scandal before Trump appointed her (link), and objectively speaking, should not have been given the job. 2) She’s the wife of Senate Majority Leader Mitch McConnell. 3) It’s widely believed that Trump gave her the job in an attempt at convincing McConnell to protect him in his Russia scandal. On top of all that, it turns out Chao decided to hang onto six figures worth of stock in an infrastructure company called Vulcan Materials (link). Why is that a problem?
As the Secretary of Transportation, Elaine Chao gets to decide whether to steer large amounts of taxpayer dollars to Vulcan Materials or to one of its infrastructure competitors. This kind of conflict of interest is precisely why cabinet members are supposed to part ways with investments in individual companies. She was hoping her ownership in the company would remain under the radar, but now that other Trump cabinet members are caught up in financial scandals, suddenly the spotlight is on Chao’s stock position. It’s something she can’t actually fix.
Elaine Chao used to sit on the Vulcan board of directors, which is how she acquired the stock. It’s structured such that she can’t sell it until April of next year. In the mean time, if she’s forced to choose between forfeiting the stock to keep her job, or resigning her job to keep the stock, it seems likely she’ll choose the latter.
Bill Palmer is the publisher of the political news outlet Palmer Report