Opinion

As Ethics Probes Build, Will Elaine Chao Answer for Wells Fargo Fraud Scandal?

Is it news anymore when a Trump administration cabinet secretary is mired in scandal? It certainly should be — otherwise we risk allowing full-scale corruption to go unabated and those responsible unpunished.

Case in point: Transportation Secretary Elaine Chao has lately been under intense scrutiny for using her high-profile status as a Washington insider for personal gain. As the stories continue to mount about Chao’s misallocation of public resources and conflict-of-interest violations, Americans are right to wonder whether she is fit for public service. 

Chao has over seven weeks’ worth of unaccounted-for private time on her official schedule, a special liaison in her office dedicated to serving her husband, Senate Majority Leader Mitch McConnell’s special interest projects, and is accused of promoting her family’s business overseas. She has funneled money to the small town of Paducah, Ky., to help her husband’s political career, and otherwise used her government position to aid his campaign, which may be a violation of the Hatch Act. She has also failed to follow through on her commitment to divest stock from companies that directly lobby her department. 

Despite the extensive reporting into Chao’s ethically and legally questionable doings, one story has not been fully told: the fraud that took place on her watch as a board member of Wells Fargo bank. 

Chao served on the Wells Fargo Board of Directors from 2011 until 2017, a period marked by non-stop scandals, before she resigned to become President Donald Trump’s Transportation Secretary. As a Wells Fargo board member, Chao was responsible for overseeing the ethics and fair corporate practices of the mega bank. She sat on the bank’s Corporate Responsibility and Credit and Finance committees, all while Wells Fargo committed massive fraud against its customers, including improperly repossessing veterans’ cars and wreaking havoc on their credit. She oversaw Wells Fargo’s residential lending practices that led to hundreds of customers being improperly foreclosed on and losing their homes. Additionally, Wells Fargo charged more than half a million borrowers for insurance they did not want nor need while Chao served on its board.

Just as concerning as these abuses is the fact that Chao is among the board members who ignored employee whistleblowers for years and delayed changing sales goals that the bank only met by opening illegal accounts without the consent of customers. Earlier this year, a federal judge approved insurers to pay out a staggering $240 million to shareholders who sued Wells Fargo representatives, including Chao, for shirking their responsibilities.

Perhaps most alarming is the fact that Chao is still getting paid by Wells Fargo, even though she now serves the American people as a member of Trump’s cabinet. Her compensation from sitting on the Wells Fargo board includes stock payouts of up to $5 million over the course of five years — 30 percent of which she received in March of this year. Chao is raking in cash, while Wells Fargo customers still struggle to recover from the bank’s fraudulent schemes against them.

Wells Fargo’s victims and all Americans deserve to know the extent to which Secretary Chao and her fellow board members knew or approved of these consumer abuses. Chao should also disclose exactly how much she is still being paid out from the bank.

Today, Chao oversees a multibillion-dollar budget at the Transportation Department. How can Americans trust government officials like Chao when she has a history littered with not only consumer fraud and shady business dealings but also potential ethics violations to boost her husband’s political career and grow her family’s wealth? Our government officials should be held to the highest ethical standards, which is why the truth about Secretary Chao’s past should be brought to light.

It’s this kind of corruption that leads 86 percent of voters to believe that it is Congress’ job to investigate senior officials in the Trump administration. More specifically, polling shows 76 percent support Congressional efforts to investigate whether Chao knew about the large-scale fraud committed by Wells Fargo while she made millions of dollars serving on its board of directors. The American people want — and deserve — accountability at the highest levels of government because public officials work for us.

The explosive stories that put Secretary Chao’s corruption under the microscope demonstrate why it is important for the House Financial Services Committee to call Chao as a witness to answer questions about how this fraud happened on her watch and whether she is still getting paid by the bank while also serving American taxpayers. Scandal after scandal unfolded during her tenure on the board. The American people deserve to hear from Chao directly about how she let this corporate fraud and abuse happen while she was charged with oversight of the bank.

Hundreds of thousands of Americans were defrauded during Secretary Chao’s tenure on the Wells Fargo board, a massive corporate interest that she still profits from today, even as she serves as cabinet secretary. It is long past time that she answer for her scandal-plagued tenure.

Lizzy Price is the Director of Restore Public Trust, a public interest group focused on exposing corruption and malfeasance at the highest levels of government.

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