Recently, the New York Times published an op-ed article stating, “The Inspector General of the U.S. Department of Transportation says Zhao Xiaolan (former U.S. Transportation Secretary) abused her power and had close ties to China. This is another article in the New York Times, following a similar report last year, that exposes Zhao Xiaolan’s abuse of power to help her Family expand business with China (the Chinese Communist Party).
The article said that as of 2019, the majority of orders for one of China’s largest state-owned shipbuilders were being fulfilled by Zhao’s family business, Foremost Group. The company also has a long-term charter with a Chinese state-owned steelmaker. Foremost Group’s ships carry bulk cargoes such as iron ore and coal, primarily shipping those commodities to China.
The article notes that last December, the U.S. Department of Transportation’s inspector general asked the Justice Department to consider opening a criminal investigation into Zhao’s abuse of power during her tenure as transportation secretary in the Trump administration to help promote the family’s shipping business. But the request was denied by Justice Department officials.
The DOT’s Office of Inspector General launched the investigation into Chao following an article published in New Times last year titled “Navigating the U.S.-China Landscape: Chao and Her Family’s Shipping Business. The article detailed how Zhao Xiaolan, while serving as transportation secretary, directed her staff to spend federal Time and resources on matters related to a shipbuilding company and her father, and used her contacts and visibility in China to raise the profile of her family’s shipping company, Formosa, and its extensive business dealings with the Chinese Communist Party.
The article also notes that Zhao Xiaolan was scheduled to visit China for the first time since taking office in 2017 as U.S. transportation secretary, but the visit was eventually canceled after moral concerns were raised by the presence of her father and sister and other family members.
The Newseum quoted Rep. Peter DeFazio, an Oregon Democrat and chairman of the House Transportation and Infrastructure Committee, as saying, “Public servants must know they are serving the public, not the private business interests of their families, especially those responsible for leading tens of thousands of public servants. “
Previously, New Times reported on the Zhao family’s deep ties to the Chinese Communist Party leadership. Zhao Xiaolan’s father, Zhao Xicheng, was an alumnus of former Communist Party leader Jiang Zemin, and Beijing‘s (CCP) industrial policy has brought lucrative profits to this business, Formosa Group. The report also noted that most of Formosa’s cargo ships are built by CCP state-owned shipyards and have long-term contracts with CCP state-owned steelmakers. More than 70 percent of Formosa’s cargo is shipped to China, most of it iron ore. This iron ore helps keep China’s industry running, and Chinese steel products are a major divide in the U.S.-China trade war.
The report also said that in 1984, the Zhao family had a stake in a state-owned maritime electronics manufacturing company that supplied products to the Communist Party’s military and other government departments and had close ties to the Ministry of Electronics Industry, of which Jiang Zemin was then minister. Zhao met with Jiang Zemin at least six times after he became the Communist Party leader, including a meeting in Zhongnanhai in August 1989. At the time, just two months after the June 4 massacre, the CCP was facing economic sanctions from the international community.
According to the New York Times, the New York-based Formosa Group, which does most of its business in China, was given hundreds of millions of dollars in low-interest loans by the Beijing (Communist) authorities to buy foreign-flagged ships.
The U.S. political news site Politico reported last year that Zhao Xiaolan gave more than a dozen interviews with Chinese-language media alongside her father, sometimes with the U.S. Department of Transportation flag and Zhao Xicheng’s biography visible on the screen. The newspaper also noted that Cho served as a director and held shares in the building materials company Vulcan Materials Company before becoming secretary of transportation.
The Wall Street Journal reported last year that Cho promised in early 2017 to sell her stake in Vulcan for cash by April 2018, but failed to do so. According to documents filed with the U.S. Office of Inspector General, Zhao sold her stake in Vulcan just days after the WaPo report.
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