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Labor's Chao Fails to Disclose Corporate Link
Published on Monday, April 16, 2001 by Reuters
Labor's Chao Fails to Disclose Corporate Link
by Jeremy Pelofsky
WASHINGTON - U.S. Labor Secretary Elaine Chao failed to reveal on her financial disclosure form that she was a board member of privately held Multa Communications Corp., which operates a high-speed Internet backbone, according to documents examined on Monday.

California-based Multacom said it operates in the United States, China and Taiwan and offers high-speed Internet access, virtual private networks, data centers, Web hosting and Web development services.

Chao, a Taiwanese immigrant, was sworn in as the labor chief on Jan. 31, but a Multacom spokesman said she resigned her board position on March 1, a month after she took the reins of the agency that oversees protecting workers' wages, workplace health and safety as well as job training.

A review of Chao's disclosure form, filed on Jan. 29 with the U.S. Office of Government Ethics, shows 28 positions held outside the government, including director's chairs at Dole Food Co. Inc. and the Nasdaq stock market.

She did not include any reference to Multacom.

Nominees to head government departments must fill out a public financial disclosure report that outlines their assets, liabilities, compensation and positions outside the U.S. government and is available to the public.

The form specifically requires the disclosure of all previous positions, paid or unpaid.

Chao was on the company's board since July 1, 2000, according to a January press release issued by Multacom when President Bush nominated her to be Labor Secretary.

The failure by Chao, who is married to Kentucky Republican Sen. Mitch McConnell, to reveal the position at Multacom was first reported by The New Republic magazine.

Telephone calls seeking comment from Chao's spokesman were not immediately returned, and it was not clear whether she was paid for her service on the board. Two calls to company officials were also not returned.

``An innocent omission or forgetting would not really be the kind of thing that would trigger a penalty,'' said James O'Sullivan, a spokesman for the ethics office, speaking generally about the disclosure forms.

However, a penalty could be imposed if it were determined a person falsified or knowingly omitted information, he said.

Chao was President Bush's second pick for the slot, behind Linda Chavez who withdrew amid staunch opposition from labor groups and the revelation that an illegal immigrant had lived and worked in her home since 1991.

Copyright © 2001 Reuters Limited


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