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Senate Approves Chao To Lead Transportation Department

WASHINGTON (Reuters) – The U.S. Senate voted 93 to 6 on Tuesday to confirm Elaine Chao as head of the U.S. Transportation Department, which overseas aviation, vehicle, train, and pipeline safety.

Chao, a former U.S. labor secretary and deputy transportation secretary, will face key decisions on how to regulate the growing use of drones and automakers’ plans to offer self-driving cars.

She will also be a key player in President Donald Trump’s Cabinet if his administration pushes ahead with a major infrastructure spending program, as the businessman-turned-politician promised during last year’s presidential campaign.

The Transportation Department has a $75 billion annual budget and about 60,000 employees. It includes the Federal Aviation Administration, which handles air traffic control.

Chao, the wife of Republican Senate Majority Leader Mitch McConnell and the first Asian-American woman to hold a Cabinet position, also will have to decide whether U.S. fuel efficiency standards should be revised, as some automakers have sought.

There are dozens of other pending regulatory issues facing the next administration, including railroad safety and staffing rules, whether to set rules requiring airlines give more passengers with disabilities seats with extra leg room, and whether to ban or restrict personal phone calls on U.S. flights.

At her confirmation hearing earlier this month, Chao declined to take positions on a number of issues, including whether air traffic control jobs should be privatized, concerns over the safety of shipments of crude oil by rail, foreign airlines’ push to move into the U.S. market, and regulation of developing technologies.

AAA, the largest U.S. auto club with more than 50 million members, praised Chao’s confirmation. AAA CEO Marshall Doney said the group “firmly believes that significant, additional investments are needed to maintain existing infrastructure and to enhance the nation’s (transportation) system.”

The Alliance of Automobile Manufacturers, which represents major U.S. and foreign automakers, said that from “autonomous vehicles to safety to fuel efficiency to infrastructure, Secretary Chao’s leadership will profoundly impact our sector and many others.”

(Reporting by David Shepardson; Editing by Paul Simao)

IMAGE: Elaine Chao testifies before a Senate Commerce Science and Transportation Committee confirmation hearing on her nomination to be transportation secretary on Capitol Hill in Washington, U.S., January 11, 2017. REUTERS/Carlos Barria

U.S. Transportation Nominee Chao Sails Through Confirmation Hearing

WASHINGTON (Reuters) – Donald Trump’s choice to run the U.S. Transportation Department, Elaine Chao, defended the president-elect’s $1 trillion infrastructure plan as a “bold vision” on Wednesday in an overwhelmingly friendly Senate confirmation hearing.

While there is criticism of Chao, in particular on environmental issues, there is no significant opposition to her nomination and she is expected to be confirmed.

She served as labor secretary under President George W. Bush from 2001 to 2009 and was the first Asian-American woman to hold a Cabinet position. She was deputy secretary of transportation under President George H. W. Bush.

She was introduced by her husband, Senate Majority Leader Mitch McConnell. The top-ranking Democrat on the committee, Florida’s Bill Nelson, noted his wife’s friendship with Chao.

Chao will take a leading role in Trump’s plans to rebuild crumbling U.S. roads and bridges with a $1 trillion fund. He would offer private investors who put money into projects an 82 percent tax credit but critics say it is unclear how they could recoup investments in most projects without sharply increasing costs for users of most roads and bridges.

Chao described the plan to the Senate Committee on Commerce, Science and Transportation as a “bold vision” and acknowledged the need to work on the issue of paying investors back.

“For them (partnerships) to be truly effective, there need to be revenue streams that need to be assured,” she added. “We all know that the government doesn’t have the resources to do it all.”

Chao is nominated to head a department with such wide-ranging responsibilities as oversight of the nation’s airports and highways, fuel-economy rules for autos and probes into auto makers for safety recalls of key parts like airbags.

She declined to take positions on issues like whether the job of air traffic control should be privatized, concerns over the safety of shipments of crude oil by rail, foreign airlines like Norwegian Air Shuttle’s push to move into the U.S. market and regulation of developing technology like autonomous vehicles and drones.

Chao faced no questions about her memberships on corporate boards. Chao is on the board of Wells Fargo & Co which has struggled since September after it agreed with regulators to pay $190 million in fines and restitution to settle charges that its employees wrongly created as many as 2 million accounts without customer authorization.

Chao is an immigrant from Taiwan who arrived in the United States at age 8. Her father, James S.C. Chao, is founder of the Foremost Group, an international shipping company.

(Reporting by Diane Bartz; Editing by Lisa Shumaker)

IMAGE: Elaine Chao testifies before a Senate Commerce Science and Transportation Committee confirmation hearing on her nomination to be transportation secretary on Capitol Hill in Washington, U.S., January 11, 2017. REUTERS/Carlos Barria

How Trump And McConnell Are Manipulating The Media

Reprinted with permission from Media Matters for America.

President-elect Donald Trump and Senate Majority Leader Mitch McConnell have scheduled several Senate confirmation hearings for Trump’s cabinet picks — as well as Trump’s first (and likely only) press conference of the transition — on a single day next week. The strategy seems designed to ensure that the media is unable to devote sufficient scrutiny to each story and to reduce the possibility of an educated public responding.

Trump announced yesterday that he will hold a “general news conference” on January 11. It will be the first Trump press conference since July 27, a stretch of 168 days. By contrast, President Barack Obama fielded questions from the White House press corps 18 times as president-elect; President George W. Bush did so on 11 occasions.

Trump previously promised to hold a December 15 press conference to address the conflicts of interest his business empire creates for his presidency, but he canceled it. Those conflicts — including the possibility that Trump will be in violation of both the Constitution and a contract with the federal government immediately upon taking office — should be a top priority for journalists on January 11. But by refusing to give a press conference for so long, while simultaneously scaling back on media appearances, Trump has created such a backlog of potential issues that it will be impossible for reporters to give all of them the time and coverage they deserve.

Meanwhile, McConnell has done his best to fracture journalist attention by ensuring that six different confirmation hearings are scheduled for the same day. Wednesday will see hearings for Sen. Jeff Sessions (R-AL), the nominee for attorney general; ExxonMobil chairman Rex Tillerson, the nominee for secretary of state; billionaire conservative activist Betsy DeVos, for secretary of education; Rep. Mike Pompeo (R-KS), for CIA director; Gen. John Kelly, for secretary of homeland security; and Elaine Chao, for secretary of transportation.

Several of these nominations are extremely controversial. The American people deserve to know more about Tillerson’s ties to Russian president Vladimir Putin, learn why white nationalists are so excited about Sessions’ nomination, hear what Pompeo thinks about Trump’s reported plan to gut the CIA after the agency produced information about Russia’s influence on the 2016 election that he didn’t want to hear, and determine whether DeVos would use her post to destroy public education.

But with all the hearings stacked on the same day, on top of Trump’s press conference, it’s impossible for the media to provide the information people need. And that’s the point — it appears to be a deliberate effort to manipulate both the press and the public.

There are only so many column inches on Page 1. There are only so many segment blocks in a cable news show. The evening broadcast news programs — watched by millions but with extremely little time for hard news — will have to juggle a multitude of stories.

TV newscasts in particular will be put in an impossible situation. They can try to drill down and give in-depth coverage to the stories they consider the most newsworthy and important and let the rest escape scrutiny altogether. Or they can try to cover them all, but provide only glancing attention to each. Either way, Trump and McConnell will have dramatically reduced the agenda-setting power of the press.

Family’s Shipping Company A Big Problem For Transportation Pick

Reprinted with permission from ProPublica.

President-elect Donald Trump has named Elaine L. Chao to head the U.S. Department of Transportation, overseeing the nation’s vast network of highways, railroads and airports. The job also means leading the Maritime Administration, which supervises the shipping industry and has as one of its primary missions to advocate for American-owned ships to fly the U.S. flag.

That could pose a conflict for Chao, whose family owns a shipping business that, while headquartered in New York, operates 17 ships flagged in Liberia and Hong Kong. The ships are owned by subsidiaries of the main business, now called Foremost Group, and most of the subsidiaries are registered in the Marshall Islands, a secretive jurisdiction where companies disclose little about their finances or officers.

Chao, 63, has not worked for Foremost Group except for a two-year stint before going to Harvard Business School. A spokeswoman for Chao said there’s no conflict between her duties as secretary of transportation and her ties to her family’s company, stressing that Chao has no “ownership stake” in Foremost.

Financial disclosure statements filed by Chao when she was George W. Bush’s secretary of labor from 2001 to 2009 declare no interest in the company, nor do disclosure statements filed by her husband, Senate Majority Leader Mitch McConnell, R-Kentucky.

The company declined to respond to a detailed list of questions sent by email and to several telephone calls.

Chao’s nomination has been widely praised by industry and trade groups.

“Throughout her distinguished career in the public, private and nonprofit sectors, she has worked to strengthen our nation’s economy and competitiveness in a global economy,” Matthew Paxton, president of the Shipbuilders Council of America, said in a statement.

When reporters asked council officials if they were aware of her family’s holdings, and how that squared with Paxton’s statement, the council said it had nothing to add.

Washington University in St. Louis law professor Kathleen Clark, who focuses on ethics, said that Chao would have to recuse herself from proceedings dealing directly with Foremost as transportation secretary, but that most of the issues posed by her family ties were more likely to be political than legal.

“This is about whether she is a credible advocate for U.S. flag vessels given this connection she has to a company that uses foreign-flag vessels,” Clark said. According to a 2011 Maritime Administration report, American companies typically flag their ships abroad to avoid taxes and safety, environmental and labor regulations. “It’s a question of political credibility in that office.”

Chao’s father, James S.C. Chao, founded what’s now Foremost Group in 1964, just six years after arriving in the U.S. from Taiwan on a scholarship to train at an American maritime academy.

The company grew, in part by contracting with the U.S. government to ship rice to Vietnam during the Vietnam War and with the United Nations to bring humanitarian cargo to Bangladesh during that country’s civil war. It also experienced a brief moment of notoriety in 2014, when The Nation reported that Colombian authorities had seized about 90 pounds of cocaine from Foremost’s Ping May, finding the drugs inside a shipment of coal bound for Europe. (The company declined to comment to the Nation.)

Throughout its history, Foremost has remained a family concern: James Chao is still the chairman and Elaine Chao’s youngest sister, Angela, is deputy chairwoman and runs the operation. Another sister, Christine, is Foremost’s general counsel. A third sister, May, was a director of a subsidiary dissolved in 2006.

Elaine Chao has often touted her family’s ties to the shipping industry. “Shipping is our family tradition,” she said in a speech in October at National Taiwan Ocean University.

Chao herself worked in banking related to the shipping industry for several years, then became a fellow in the Reagan White House, working on transportation and trade policies. President Reagan appointed her deputy maritime administrator and subsequently chairwoman of the Federal Maritime Commission.

When Chao served as deputy secretary of transportation and then director of the Peace Corps under President George H.W. Bush, any conflict with her family’s shipping company doesn’t appear to have come up publicly.

Though Chao has never played a leadership role in the company, she and her husband have benefitted from its burgeoning success. In 2008, Chao’s father gave the couple between $5 million and $25 million, more than doubling McConnell’s average net worth, according to the Center for Responsive Politics and Politico.

Today, Foremost’s ships transport bulk cargo, such as iron and coal, around the world. The company is growing, with seven more ships in the process of being launched or constructed. The ships are being built in China and Japan.

The company is far from unique in taking advantage of the tax and labor benefits of flagging abroad. Over 70 percent of privately owned American ships with a gross tonnage over 1,000 tons register outside of the U.S., mostly in the Marshall Islands, Liberia and Vanuatu, according to ProPublica’s analysis of commercial shipping data. They save considerably by doing this: A 2011 Transportation Department report said the total average cost of operating a U.S. flag vessel in foreign commerce was 2.7 times higher than foreign-flag equivalents.

Still, critics of so-called open registries, also called “flags of convenience,” say they cost the U.S. tax revenue and jobs. Crews on American-owned ships flagged or registered abroad are often paid considerably less and have fewer worker protections.

“Flag of convenience shipping is a precursor to globalization and outsourcing,” said Jeff Engels, an official with the International Transport Workers’ Federation. “It destroyed my industry, and it destroyed jobs for American seafarers.”

Most of Foremost’s ships are large bulk carriers known as “capesize,” which usually have crews of between 20 and 30 workers. According to commercial shipping records, 12 of the 17 have mostly Chinese crew members. Records are not available for the other five ships.

Its hiring and use of flags of convenience would seem to be at odds with the aggressive campaign to keep jobs in the U.S. espoused by Chao’s new boss, the president-elect.

“We can’t allow this to happen anymore with our country. So many jobs are leaving and going to other countries,” Trump said on Dec. 1, adding that “there will be consequences” for companies that do outsource jobs.

Chao declined to answer questions about the gap between Trump’s goals and her family’s practices.

Josie Albertson-Grove and Masako Melissa Hirsch are with the Stabile Center for Investigative Reporting at Columbia University.

IMAGE: Flickr/James Cullum, Talk Radio News Service