Foremost, the company Mr. Chao ran until 2018 and which is now run by Ms. Chao’s sister, Angela, has received hundreds of millions of dollars in loan commitments from a bank run by the Chinese government to build new dry-bulk freight ships at Chinese government-owned shipyards. In January 2017, Angela Chao became a director of Bank of China, one of the country’s top four lenders.
The planning for the trip to China included discussions of a meeting with Mr. Chao and a “former high-level Chinese official” who had been one of his school classmates and now lived in Shanghai, the inspector general’s report said. The report does not name the former government official, but Jiang Zemin, the former Chinese president, attended the same university as Mr. Chao in the late 1940s in Shanghai. That school — Shanghai Jiao Tong University — was on the planned itinerary.
Mr. Chao regularly met Mr. Jiang on his trips to China. During Mr. Jiang’s tenure at the head of the ruling Communist Party from 1989 to 2002, the two met at least six times, The Times reported in 2019. Notably, Mr. Jiang received Mr. Chao and his wife at a villa inside the Communist Party’s Beijing leadership compound in late August 1989, near the site of the bloody Tiananmen Square crackdown that had taken place less than three months earlier.
Ms. Chao’s trip was ultimately canceled only a few weeks before it was scheduled to take place — and after airline tickets had been purchased — when State Department officials raised their own ethics concerns.
Four days before Mr. Rosen took part in the discussion on ethical issues, Ms. Chao was present with her father and sister at New York’s Harvard Club for the signing of a contract with a Japanese shipbuilder to deliver two freighters to Foremost, according to a report by a Chinese news media company.
In 2018, staff members from Ms. Chao’s office helped edit chapters from a biography of Mr. Chao, even though one “staffer acknowledged the publication did not have any D.O.T.-specific nexus,” the inspector general’s report said. After helping edit the book, Ms. Chao’s staff then built a marketing strategy targeting journalists to “build Dr. Chao’s profile,” and other organizations such as Columbia University and the shipping industry publication Lloyd’s List to promote her family.
Steven G. Bradbury, who was the Transportation Department’s general counsel at the time, told investigators that he was “aware of the topic,” related the family book that agency staff members had worked on, “but it would not be appropriate for the secretary to direct subordinates to work on these publications.”