Josh Rogin - Chaos Under Heaven

These two Chinese influence operations sometimes align in striking ways. In June 2019, the Bush Foundation awarded its inaugural George H. W. Bush Award for Statesmanship in US-China Relations to Jimmy Carter. However, Carter was recovering from surgery at the time and the award was collected by his son. Chinese ambassador Cui Tiankai spoke at the event, warning, “Some are clamoring for a decoupling of the two countries and even a new cold war. These attempts are not only questioning the achievements we have made over the past four decades and challenging the very tangible outcomes of our cooperation, but also putting the future of our relations and the prospects for global stability and prosperity at great risk.” One must wonder how Neil’s brothers, former president George W. Bush and former governor Jeb Bush, feel about their brother allowing the CCP to use their father’s foundation as a platform for its propaganda.

The Chao Family

For those in Washington trying to understand the way power and money flowed between Beijing and Washington, there was no bigger puzzle than the story of the family of Transportation Secretary Elaine Chao, who was married to Senate Majority Leader Mitch McConnell (R-KY). It was too high level and too sensitive even for Bingo Club members—with all their knowledge and access—to really investigate. But the subject came up at every single Bingo Club meeting I attended.

US government officials, when they sign up to serve their country, agree to disclose and then to rid themselves of any personal or financial conflicts of interest—not because they are planning to act corruptly, but because the existence of such conflicts carries the risk and perception of said corruption. But in the Trump administration, conflicts of interest were ubiquitous. Chao had clear conflicts of interest between her US government obligations and her family’s business interests. Her actions throughout her tenure show a pattern of mixing those interests with little regard for these conflicts or even the appearance of impropriety.

In February 2019, Chao and I were seated two seats apart at the Metropolitan Club for a VIP dinner featuring Colombian president Iván Duque Márquez, hosted by Concordia, a nonprofit policy organization. At the end of the dinner, I politely introduced myself and offered her my card. She said she had read my coverage of China and asked whether I could stay to have a chat one-on-one.

After she shook the hands of half a dozen people who stopped by our table to pay their respects, we spoke for about ten minutes. She never said “off the record.” She asked me, “Josh, if you were to give advice to the Chinese leadership on how to handle these trade talks, what would it be?” I thought to myself, what an interesting construction for the question. Chao was asking me how to help Beijing deal with Washington, not how the Trump administration (in which she was transportation secretary) should deal with China. I played along.

“I think I would tell them that this is their last chance to really make the changes Washington is demanding. If they don’t do that now, this town is going to run out of patience and things are going to get worse,” I said.

I was trying to give her advice that, if passed on, would honestly reflect the mood in Washington, but I doubted that Beijing would heed it, even if Chao did pass it along. She seemed to take it in and we talked for a few more minutes. She was perfectly nice.

When the New York Times published its explosive investigation into Chao’s ties to her family’s business and her family’s ties to the very top level of the CCP, her sister Angela suggested the reporting was motivated by their ethnicity. But if you read through the report, it’s clear why the Chao story is important. The Chao family is the only family to be considered American royalty and Chinese royalty at the same time. Their business interests and political activities are so intertwined, to say there’s no conflict of interest is not credible.

Just looking at the facts that are not in dispute is jarring. The US transportation secretary held twenty-one meetings with Chinese state press and zero interviews with the US media in her first year. In over a dozen of them, she sat next to her father, James Chao, the founder of the family shipping company called Foremost Group, with the US government’s and Transportation Department’s flags as their interview background. She booked an official trip to China and asked the State Department to include her family members in official meetings and help them with travel. She canceled the trip when the emails were revealed.

Chao and her husband, McConnell, took somewhere between $5 million and $25 million from her father as a gift. The Chao family has donated over a million dollars to McConnell’s senate campaigns. Elaine’s sister Angela Chao, who now runs Foremost, sits on the board of the Bank of China. Foremost has accepted at least $300 million in loans from the China Export-Import Bank, according to the bank.

The Chao family story is a Chinese, Taiwanese, and American success story. James Chao, who grew up in Shanghai and went to school with former Chinese president Jiang Zemin, left mainland China with the Kuomintang after they lost the civil war to the Communists and settled in Taiwan. That’s where Elaine was born in 1952. The family eventually immigrated to the United States and became American citizens. After the United States and China thawed relations in 1972, James got back in touch with his old friends, built a shipping business, and became a model of success in the Chinese diaspora.

“My family are patriotic Americans who have led purpose-driven lives and contributed much to this country. They embody the American dream, and my parents inspired all their daughters to give back to this country we love,” Chao told the Times.

That’s all well and good. But the long record of Chao helping her family business is too extensive to overlook. It calls into question why the Transportation Department under her watch proposed slashing budgets for American government mariner shipbuilding programs. Does it have anything to do with the fact that Angela and James Chao have served on the board of the holding company for China State Shipbuilding? Does it matter that Foremost ships don’t fly the US flag, to avoid operating and labor costs, but the US transportation secretary is supposed to be promoting the US flagging system? That’s why conflicts of interest are problematic. They present competing interests inside a person’s head and in their wallets.

One of the families the Chaos have been close to for decades is none other than the family of Tung Chee-hwa. James Chao worked for Tung’s father, Tung Chao-yung, who founded the China Maritime Shipping Line. Fifty years later, Tung still ran that company, now called Orient Overseas Container Line. The families and the companies remain close. And until new details come to light about their relationship, it will continue to vex the Bingo Club—and anyone else who believes American officials should unequivocally put the country’s good over their family’s wealth, let alone the interests of another nation.

7

Ploughshares into Swords

While the women and men of the Bingo Club worked behind the scenes to identify and counteract Chinese influence in the United States, their compatriots in government weren’t always benignly neglecting these same issues. Sometimes, they were exacerbating them—spreading Chinese influence, or at least turning a blind eye, all while purporting to serve the American people. Indeed, as the White House wound down its investigation of Chinese economic aggression in late 2017 and early 2018, and national-security-minded officials in the Trump administration steeled themselves for the confrontation with China that they had long expected, they sometimes found that their adversaries weren’t confined to the other side of the Pacific; sometimes, they were on the same side of the Potomac.