Peter Schweizer: McConnell and Chao Must Address Their Financial Ties with ‘Rival Power’ China

Sen. Mitch McConnell, R-Ky., and his wife, Labor Secretary Elaine Chao, wave to supporters as they celebrate his re-election win over Democratic challenger Bruce Lunsford in Louisville, Ky., Tuesday, Nov. 4, 2008. (AP Photo/Ed Reinke)
AP Photo/Ed Reinke

Government Accountability Institute President Peter Schweizer, bestselling author of Secret Empires: How the American Political Class Hides Corruption and Enriches Family and Friends, joined SiriusXM host Rebecca Mansour on Monday’s edition of Breitbart News Tonight to discuss the latest development in the scandal involving Senate Majority Leader Mitch McConnell and his wife Transportation Secretary Elaine Chao’s deep financial ties to the U.S. strategic rival China.

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On Monday, Politico reported that Elaine Chao appeared in joint interviews with her shipping mogul father in numerous “Chinese and Chinese-American media outlets since her nomination,” including at least one that appears to have been conducted at the Department of Energy (DOT) and prominently features the DOT flag in the background. Ethics experts raised concerns that Chao may have violated federal law prohibiting government officials from using their office for their own gain or that of their friends and family.

As Mansour reported on Breitbart News:

Schweizer revealed how Senate Majority Leader Mitch McConnell and his wife, Transportation Secretary Chao, received a “gift” from Chao’s shipping mogul father—whose company Foremost Group does massive deals with the Chinese government—for between $5 to $25 million. Elaine Chao’s sister, Angela Chao, also works for the Foremost Group and sits on the board of the Communist Chinese government’s Bank of China.

Schweizer’s book further revealed that Angela Chao was appointed to the Chinese state bank 10 days after President Trump was elected. Since Elaine Chao’s appointment as Trump’s Transportation secretary, China’s government-owned China State Shipbuilding Corporation (CSSC) made a deal with the Chao family’s Foremost Group to purchase 10 ships, which effectively increased the Chao family’s fleet by nearly 50 percent.

In her interview with Schweizer, Mansour pointed out that military and intelligence officials have identified “long-term strategic competition” with China as the primary focus of U.S. national security, and China is doing its best to live up to that classification with provocative actions everywhere from Africa to the Straits of Taiwan.

“Don’t you think this is a little bit unnerving, that we’ve got the Senate Majority Leader and our Transportation Secretary this closely aligned to a strategic adversary that wants to overtake us militarily and is attacking our pilots?” she asked, referring to the two American pilots injured by Chinese military lasers in Djibouti.

“I think unnerving is a great word for it,” Schweizer agreed. “The problem is that these ties the Chao family, that Mitch McConnell and Elaine Chao have to the Chinese government, it’s not through some obscure company. It’s through, as I mentioned before, the China State Shipbuilding Corporation. They are one of the largest military contractors in Beijing, so when you talk about the rising Chinese challenge to America strategically, a lot of that is based on the navy.”

“The U.S. Navy has projected that if current trends continue, by 2030 the Chinese navy will surpass the U.S. Navy in naval capability,” he observed. “So you have this bizarre situation where the Senate Majority Leader and his wife Elaine Chao directly financially benefit from the financial largesse of a key component of that Chinese navy military buildup. There’s no way around it.”

“This is really unprecedented,” Schweizer said. “I’ve never seen something like this in American political history. There’s no way around this. You can’t say that the Chinese aren’t a rival. You’ve got the Trump administration saying that. You have the Obama administration saying that before, that the rising military strategic challenge is real.”

“The Chinese have a strategy called ‘One Belt, One Road’ which is the sort of global infrastructure plan that they have,” he continued. “This is part of the reason that they’re in Djibouti, among other places in Africa and Asia. Their goal here is to create the infrastructure through Asia and through Africa that will allow Chinese goods to travel. Both the Obama administration and the Trump administration have spoken in detail about how One Belt, One Road is a direct strategic challenge to the United States.”

Schweizer quoted Elaine Chao’s sister Angela expressing strong approval of the One Belt, One Road project. Specifically, she called it “very important not only to China’s development, but for the many surrounding and neighboring countries, and thus the world.”

“She actually wants to help it succeed, because she thinks it’s good for China, but it’s also good for Africa. Out of that equation, of course, is the United States, because this represents a massive strategic challenge to the United States,” he said.

“You cannot have these conflicts of interest. If you have political leaders who are financially tied to our political rivals, they are unfortunately going to pick their financial interests every time. That’s why this is a big issue and a big problem that needs to be looked into and needs to be dealt with,” he urged.

“To me, it is one of the most disturbing stories I have heard in a long time – and I was horrified by what you uncovered in Clinton Cash, by the way. I’m still horrified by it,” said Mansour. “This is just as horrifying. The thing that really troubles me the most is, nobody’s touching it. This is the first time I’ve seen anybody, with this article in Politico and this article that was in New York Magazine, it’s the first time I’ve seen anybody pick it up.”

“I’m thinking, what is wrong with this country that we’re okay with this?” she continued. “We’re not paying attention. That’s how horrifying this is to me because it is unprecedented to see this sort of thing happening.”

Mansour noted that the McConnell-Chao-China story certainly seems to have captured the attention of “this crazy lunatic West Virginia Senate candidate,” Don Blankenship.

“I’ve never seen a more stupid and crazy campaign ad than I’ve seen with this dude,” she said of the infamous ad in which Blankenship referred to McConnell’s “China family.”

Nevertheless, she added that Blankenship appears to have surged ahead in the West Virginia Senate primary because he has the conflict-of-interest issue to himself, and “the grassroots despises Mitch McConnell so much that any candidate will rise in the polls if they just attack Mitch.”

“This story about Mitch McConnell and his family really, honestly, has nothing to do with the ethnicity of the Chao family,” Schweizer pointed out. “The reason I say that is, we have a chapter in Secret Empires that talks about the lucrative commercial ties to the Chinese government involving the Biden family. The last time I checked, the Bidens were Irish.”

“The point here is not the ethnicity of the Chao family, the fact that they are ethnically Chinese. The point here is, the Chinese have a very direct strategy of seeking out commercial ties with the family members of the American political elites – whether that’s Joe Biden, whether that’s Elaine Chao, they are trying, attempting to do this to the Trump family.”

“The point here is, we in this country have to be smart about this,” he advised. “We have to be smart in recognizing the Chinese believe that they can basically buy off our political leadership by doing these sweetheart deals with family members. We’ve got to monitor it. We’ve got to call it out. We’ve got to draw attention to it, and we’ve got to have a zero-tolerance policy. Mitch McConnell and Joe Biden are trying to avoid this issue by essentially ignoring it.”

“The Chinese have chosen to do this in a bipartisan way – in other words, they’re looking for deals with Republican families, with Democrat families, they don’t care,” Schweizer noted. “In our polarized country, it makes it very difficult to get people to come together and say in principle, whether Republican or Democrat, this is wrong. You’ve got Republicans who do not want to call out McConnell and Chao on this issue, and you’ve got Democrats who don’t want to call out Biden. The other side does not want to draw attention to it because it’s going to draw attention to their guy.”

“I think we as the American people have to say this is not a question of Republican or Democrat. This is about the sovereignty of our country. We’ve got to have leaders that are not compromised by their commercial ties to a foreign government, which is precisely what’s going on, whether you’re talking about Mitch McConnell and Elaine Chao, or whether you’re talking about Joe Biden and his son Hunter Biden,” he said.

“It didn’t take much for Politico to find this,” Mansour observed. “Elaine Chao, by the way, doesn’t even give interviews. She never does any press conferences. It literally was a Google search. Most interviews that she gave over the last two years were with her father, these joint interviews with him. It’s not like you have to dig very deep. These are major companies that they’re pairing with. It’s the communist government in China!”

“If you look at it based on these interviews the appearance seems to be that she has done more media in China, where the media is government-owned, than she has done media in the United States,” Schweizer concurred. “That’s a pretty shocking thing when you think about it. I give Politico great credit for this, for uncovering these videos, for reporting on it. I encourage people to go look at it. It’s a very good job of reporting.”

“It is shocking to me that you see this much work in the Chinese media and very little in the United States, certainly not wanting to answer any questions as it relates to the commercial ties that her family enjoys with the Chinese government. That has got to change. Our elected officials need to be accountable to us, and they need to be accountable to the media in a very legitimate way,” he said.

Mansour quoted a statement from the Department of Transportation dismissing Chao’s interviews in China as merely “a Cabinet member appearing with her father and other family members” to “share an inspirational story about immigrants from a minority community who have become successful in our country.”

“It wasn’t as if she was appearing in a Hallmark ad with her father,” Mansour objected.

With due caution against making unwarranted comparisons to the horrors of Nazi Germany, Mansour noted that China’s current strategic, militaristic, and ideological position is often compared to that of Germany in the 1930s, when the Nazi regime was building up its military, but the United States and Great Britain did not fully comprehend the mortal threat it posed. Drawing on that comparison, Mansour wondered how a Senate majority leader and a Cabinet secretary with financial ties to the German military machine would have been received at the time, or judged subsequently by history.

“That’s a very good way to look at this,” Schweizer responded. “Because look, does anybody dispute that the Chinese government is a rival power? The Obama administration said so. The Trump administration has certainly said so. Curiously, Elaine Chao doesn’t seem to have an opinion on this issue. She’s never made any statements as it regards to this issue.”

“The bottom line is this: the Foremost Group, which is the family business, has been very lucrative,” he said. “We know that James Chao, the father-in-law to Mitch McConnell, gave Mitch and Elaine Chao, his daughter, a gift of between $5 million and $25 million — they only have to report ranges, they don’t have to report exact amounts. So they have benefited from this.”

“James Chao has lived a long life. He’s older in age. He will pass along here at some point, maybe in the next five to ten years. I think it is a very safe assumption that Elaine Chao and Mitch McConnell will inherit a sizable amount of money from him, courtesy of the Foremost Group and this business he’s built,” he added.

“The bottom line is, the Foremost Group is entirely dependent on the good graces of the Chinese government,” Schweizer said.

“If the Chinese government decided tomorrow that they didn’t like something Mitch McConnell said or something that Elaine Chao did, they could shut down the family business tomorrow, because they build all the ships, they finance the construction of the ships, they provide crews for the ships, and they provide contracts for them to ship goods around that are goods from other Chinese-owned state enterprises. The shipping industry is extremely competitive. Without the benefit of the Chinese government, they would be in deep trouble,” he elaborated.

“Is that really a situation that we want our national leadership in?” Schweizer asked. “Would we want our national leadership in the 1930s dependent upon a rival power in that way? I don’t think so, and I don’t think we want that today.”

“To me, the most frustrating part about this is what you talked about earlier: it’s the fact that Mitch McConnell and Elaine Chao do not want to talk about this,” he told Mansour. “They want this issue to go away. They want to continue to collect the benefits of these commercial ties, but they do not want to talk about that. I think it’s unacceptable. The stakes are too high.”

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