USDOT Secretary Elaine Chao sells stock in Vulcan Materials after conflict of interest questioned

UPDATE: June 18, 2019: Transportation Secretary Elaine Chao has sold her stock in highway construction materials company Vulcan, according to a letter released by the USDOT.

According to documents related to the transaction, which were provided by The New York Times, the divestment should have brought the secretary between $250,00 and $500,000.

In a letter to the Emory Rounds, the director of the Office of Government Ethics, Judith S, Kaleta, deputy general counsel and designated USDOT ethics official wrote that Secretary Chao's previous financial disclosures had contained inadvertent misstatements regarding her holdings in Vulcan but they did not present a conflict of interest.

Dive Brief:

Since taking office in January 2017, Transportation Secretary Elaine Chao has made $40,000 from the Vulcan Materials Co. stock she received as a payout for the two years she served on the asphalt material supplier's board of directors, The Wall Street Journal reported. This is despite Chao reportedly indicating on previous government forms that she planned to divest.
First, in 2017, prior to her confirmation as Secretary of Transportation, Chao signed an ethics agreement stating that she would receive a cash payout in April 2018 for all vested deferred stock she earned as compensation for her tenure on the Vulcan board. Chao was instead given company shares as payment, which Vulcan officials told The Journal was standard policy. Chao then allegedly stated on a subsequent disclosure in May 2018 that she still anticipated a cash payout that never came to pass.
USDOT ethics officials said that Chao's holding of shares is not an ethics violation since she does not participate in issues affecting Vulcan. A Vulcan spokesman also told The Journal that the company has not lobbied the USDOT since Chao took office. However, the former head of the Office of Government Ethics, Walter Shaub, told The Journal that "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."

Dive Insight:

The Center for Responsive Politics tracks the amounts that companies spend on federal lobbying efforts and, according to the center's database, Vulcan spent $390,000 in 2017; $510,000 in 2018; and $120,000 in the first quarter of 2019. In 2017, there were at least four reports that indicated firms hired by Vulcan lobbied the USDOT while Chao headed the agency, as well as another four in 2018 and one in 2019. Vulcan told Construction Dive, however, that these documents do not represent lobbying efforts aimed at the USDOT. “The disclosures relate to communications with the Congressional committees that oversee transportation, not the DOT," said company spokesman Jamie Tully.

But certainly, Vulcan isn't the only construction-related company or group lobbying the USDOT. Fluor Corp., HNTB, AECOM Global and Cemex, as well as employer groups like the Associated General Contractors of America and the Associated Builders and Contractors have already lobbied the agency this year.

So far in 2019, the construction industry has spent $12.5 million dollars in its federal lobbying efforts. Building suppliers, like Vulcan, have spent the most so far ($4.1 million), followed by construction services companies ($3.4 million), general contractors ($2.4 million), home builders ($1.7 million) and special trade contractors ($973,945).