Most of the information in this section comes from Peter Schweizer's book
Secret Empires: How the American Political Class Hides Corruption and Enriches Family and Friends ( I highly recommend reading the whole chapter on Mitch McConnel for more detail )
Key Players
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Mitch McConnell / Elaine Chao
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James Chao ( Elaine's father )
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Angela Chao ( Elaine's sister )
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Christine Chao ( Elaine's sister )
Mitch McConnell and his wife, Elaine Chao , are members of the elite class in Washington. McConnell has oscillated from Senate Majority Leader / Minority Leader over the years, while his wife has been Secretary of Labor under George W. Bush and Secretary of Transportation under Donald Trump. Previously, she was the head of the Federal Maritime Commission.
Chao met McConnell in 1987 – two years after McConnell was first elected senator from the state of Kentucky. Shortly after, the Chao family began donating heavily to McConnell’s campaigns. Mitch and Elaine started dating in 1991 and were married in 1993. Wedding attendees included family and friends – one of whom was the Chinese representative to the United Nations.
As McConnell and Chao were beginning their marriage, McConnell grew in seniority in the Senate, and the Chao family became increasingly intertwined financially with the Chinese government. The China State Shipbuilding Corporation (CSSC) describes James Chao as a “business partner and friend of years ”.
Shortly after the wedding, in December 1993, Senator McConnell traveled to Beijing for a series of private meetings with the most senior officials in the Chinese government. This was not a congressional trip. The meetings were arranged by McConnell’s father-in-law, James Chao, and came at the invitation of the CSSC. McConnell met with Chinese president Jiang Zemin, who was a classmate of James Chao at Jiao Tung University.
In 2004, McConnell and Chao had an average net worth of $3.1 million according to public records . By 2014 they had a net worth of between $9.2 million and $36.5 million. The huge increase came in 2008 after they received a gift from Elaine Chao’s father, James. James’s fortune comes from the family business - the Foremost Maritime Corporation a shipping firm that James founded ( The Chao family are Taiwanese ). James Chao is the chairman, and Elaine’s youngest sister, Angela, is deputy chairwoman, who runs the day-to-day operations. Another sister, Christine, is Foremost’s general counsel.
As McConnell and wife have been in positions of power in Washington,
Foremost Maritime Corporation has grown and gotten extremely wealthy, in large part do to their close relations with the Chinese government. As the Chaos and the Chinese government became business partners, the Chaos and McConnells tied their economic success to that of Beijing. If McConnell supported policies damaging to Chinese interests, Beijing could severely damage the Chao family’s economic future . As McConnell gained more political power on Capitol Hill and his position toward China softened, the Chao family saw its business ties with the Chinese government increase dramatically—benefiting the family immensely.
McConnell went on talk shows and declared that the United States needed to be “ambiguous” as to whether it would come to the defense of Taiwan if attacked by China. “I think we’re purposefully ambiguous. I think that’s the place we ought to be.” - ironically selling out Chao’s home nation all for the benefit of the Chao family shipping company and thus McConnell's fortune. In 1999, the Senate Committee on Foreign Relations chairman Senator Jesse Helms introduced the Taiwan Security Enhancement Act. It was a show of support for a Taiwan independent of Chinese control. The bill had twenty-one cosponsors and heavy Republican support. McConnell was not on the list.
Following the Tiananmen Square massacre, Congress had put in place a requirement that in order to retain it's trade status, annual certification that the country was making progress on human rights was required in order to maintain that status. China’s main goal was to get rid of that requirement.
In 2000, McConnell cosponsored S.2277, which did just that. The Chinese government finally succeeded in getting rid of the requirement that they had had been fighting for years.
Senator McConnell had also been working to derail legislation that would be damaging to Beijing. In September 2011, the Currency Exchange Rate Oversight Reform Act (S.1619) was introduced in the Senate. This bill punished countries with “fundamentally misaligned currencies” by tacking on import duties. While it did not specifically target China, it was a direct response to China’s undervaluing its currency, which threatened U.S. competitiveness in the international marketplace and made U.S. goods more expensive in China. McConnell adamantly opposed the bill. On October 6, 2011, he attempted to kill the bill by suspending rules on the Senate floor and introducing amendments. Reid, the then Senate Majority Leader, used the “nuclear option” to change the Senate rules that passed by the Democratic majority of the Senate and left McConnell seething. On October 11, 2011, the bill passed with a 63–35 vote. McConnell voted against it.
James Chao and Angela Chao were appointed the board of directors of the Chinese government-owned military contractor Chinese State Shipbuilding Corporation Holdings, Ltd. ( CSSC Holdings ) under the names Zhao Xicheng (赵锡成)- James and Zhao Anji (赵安吉) – Angela. At the time they joined, they were the only foreigners to serve on the company’s board. They joined just as the US Senate was taking up legislation concerning China. Angela has also been appointed to the government-controlled Bank of China, only the second foreign national to serve on that board.
The vast majority of business Chaos’ shipping company has done is with CSSC. Even though Foremost is based out of the United States, their ships have been constructed by Chinese government shipyards, and their construction financed by the Chinese government. Their crews are largely Chinese and the contracts for the cargo vessels are with Chinese state-owned companies. In other words, CSSC owns all the ships, the crews, and about 90 percent of the contracts.
Before McConnell and Chao married, the family shipping business was comprised of two large cargo ships built by the Jiangnan shipyards in China. Ten years later, by the summer of 2002, the Chao family was doing increasing volumes of business with the Chinese government and the government’s Shanghai Waigaoqiao Shipbuilding Company. This company produced for them Capesize ships, the largest dry cargo vessels in the world. Over the next four years, Foremost Maritime would have CSSC construct six more of the massive ships. Between 2001 and 2011, the company delivered ten of the mammoth ships to Foremost.
By 2014 the Chaos had ordered six 180,000-dwt (dead-weight ton) bulkers at another government-owned shipyard, Qingdao Beihai Shipbuilding Heavy Industry Company costing $55 million apiece. The Chaos became increasingly dependent on Beijing for their business success. The crews on their vessels are largely Chinese, operating out of Chinese ports carrying large amounts of raw materials in and out of China. Their clients include well-known Western companies like Cargill, but often Foremost is carrying goods for Chinese government-owned entities like Rizhao Steel and Wuhan Iron & Steel.
During the 2016 presidential election, Donald Trump charged the Chinese government with engaging in unfair economic practices such as manipulating its currency, protectionism, and stealing American intellectual property. He also warned that he saw the country as a rising military threat. Ten days after Trump’s win, the government-run Bank of China made an announcement. The senior bank officers are members of the Chinese Communist Party (CCP) and are appointed by the CCP. The bank’s board of directors includes all senior Chinese officials and one lone Dutch banker. They now announced they would be getting a new member: Senator McConnell’s sister-in-law, Angela Chao.
The US Department of Defense (DoD) made public a list of 20 Chinese companies - pursuant to Sec. 1237 of the FY1999 National Defense Authorization Act - that have been identified as “Communist Chinese military companies,” complying with a two-decade-old mandate that Congress issued during the Clinton Administration. The takeaway for companies, universities, and individuals is that they should proceed with caution and carefully conduct their due diligence when dealing entities on DoD’s list. One company identified on that list was CSSC. However, it is noteworthy that despite publication of the list, McConnell is still tied with Foremost which, for all intent and purposes is a, subsidiary of CSSC.
One of Ms. Chao’s sisters, Christine, the general counsel at Foremost, was the second-biggest contributor to McConnells super PAC Kentuckians for Strong Leadership in 2014. She gave $400,000 to the organization, which identified Sen. McConnell’s re-election as its highest priority that year. In all, from 1989 through 2018, 13 members of the extended Chao family gave a combined $1.66 million to Republican candidates and committees, including $1.1 million to Mr. McConnell and political action committees tied to him, according to F.E.C. records.
March 3, 2021
The Transportation Department’s watchdog asked the Justice Department to criminally investigate Elaine Chao late last year after it determined she had misused her office when she was transportation secretary under President Donald Trump but was rebuffed, according to a report released March 3,2021.
The report said the Justice Department’s criminal and public integrity divisions declined in December to take up the case for criminal prosecution following the inspector general’s findings that Chao inappropriately used her staff and office for personal tasks and to promote a shipping business owned by Chao’s father and sisters. That company does extensive business with China.
“A formal investigation into potential misuses of position was warranted,” deputy inspector general Mitch Behm wrote in a letter to lawmakers.
