It's called CORRUPTION....

Chao created special path for McConnell’s favored projects

A top Transportation official helped coordinate grant applications by McConnell’s political allies.

By TUCKER DOHERTY and TANYA SNYDER

The Transportation Department under Secretary Elaine Chao designated a special liaison to help with grant applications and other priorities from her husband Mitch McConnell’s state of Kentucky, paving the way for grants totaling at least $78 million for favored projects as McConnell prepared to campaign for reelection.

Mitch McConnell

Chao’s aide Todd Inman, who stated in an email to McConnell’s Senate office that Chao had personally asked him to serve as an intermediary, helped advise the senator and local Kentucky officials on grants with special significance for McConnell — including a highway-improvement project in a McConnell political stronghold that had been twice rejected for previous grant applications.

Beginning in April 2017, Inman and Chao met annually with a delegation from Owensboro, Ky., a river port with long connections to McConnell, including a plaza named in his honor. At the meetings, according to participants, the secretary and the local officials discussed two projects of special importance to the river city of 59,809 people — a plan to upgrade road connections to a commercial riverport and a proposal to expedite reclassifying a local parkway as an Interstate spur, a move that could persuade private businesses to locate in Owensboro.

Inman, himself a longtime Owensboro resident and onetime mayoral candidate who is now Chao’s chief of staff, followed up the 2017 meeting by emailing the riverport authority on how to improve its application. He also discussed the project by phone with Al Mattingly, the chief executive of Daviess County, which includes Owensboro, who suggested Inman was instrumental in the process.

“Todd probably smoothed the way, I mean, you know, used his influence,” Mattingly said in a POLITICO interview. “Everybody says that projects stand on their own merit, right? So if I’ve got 10 projects, and they’re all equal, where do you go to break the tie?”

“Well, let’s put it this way: I only have her ear an hour when I go to visit her once a year,” he added of Chao and Inman, a longtime Bluegrass State operative who had worked as McConnell’s advance man. “With a local guy, he has her ear 24 hours a day, seven days a week. You tell me.”

The circumstances surrounding the Owensboro grant and another, more lucrative grant to Boone County, highlight the ethical conflicts in having a powerful Cabinet secretary married to the Senate’s leader and in a position to help him politically. McConnell has long touted his ability to bring federal resources to his state, which his wife is now in a position to assist.

Chao’s designation of Inman as a special intermediary for Kentucky — a privilege other states did not enjoy — gave a special advantage to projects favored by her husband, which could in turn benefit his political interests. In such situations, ethicists say, each member of a couple benefits personally from the success of the other.

“Where a Cabinet secretary is doing things that are going to help her husband get reelected, that starts to rise to the level of feeling more like corruption to the average American. … I do think there are people who will see that as sort of ‘swamp behavior,’” said John Hudak, a Brookings Institution scholar who has studied political influence in federal grant-making.

In fact, days after launching his 2020 reelection campaign McConnell asked Owensboro’s mayor to set up a luncheon with business and political leaders at which the senator claimed credit for delivering the grant.

“How about that $11 million BUILD grant?” McConnell asked the crowd rhetorically, according to the Owensboro Times. He then recalled his role in securing earlier grants to the city, adding, “It’s done a lot to transform Owensboro, and I was really happy to have played a role in that.”

McConnell’s role — along with Chao’s and Inman’s — was also celebrated by local officials when the $11.5 million grant was approved — to much local fanfare in December 2018.

“Firstly, we are thankful that we had such good associations built with Sen. McConnell and the U.S. Department of Transportation because without them it wouldn’t have happened,” declared Owensboro Mayor Tom Watson, standing alongside three other local officials at a news conference celebrating the grant award.

“We’re just really grateful and thankful to Sen. McConnell and Secretary Chao and our own Todd Inman,” added Mattingly.

Owensboro wasn’t the only beneficiary of Inman’s assistance. He also communicated with McConnell’s office about multiple requests from county executives to meet with Chao to speak about potential projects in Kentucky, according to emails which, like the others, were obtained under the Freedom of Information Act by the watchdog group American Oversight.

One of those executives, Boone County Judge/Executive Gary Moore, met with Chao in December 2017. Moore’s request, a $67 million discretionary grant to upgrade roads in rural Boone County, another McConnell stronghold northeast of Louisville, was ultimately approved in June 2018.

Chao declined to comment for this story, and neither she nor Inman addressed questions about his role as intermediary between the department and Kentucky.

Inman said in a statement, “I’m proud to work for the Secretary and it’s an honor to work at the Department of Transportation, especially as this Administration is prioritizing infrastructure investments and meeting with people from all 50 states to discuss their needs. Our team of dedicated career staff does an outstanding job evaluating hundreds of applications for these highly competitive grant programs, a thorough process developed well before this Administration.”

The Transportation Department, through a spokesperson, said that “No state receives special treatment from DOT,” noting that Kentucky is 26th in population and 25th in DOT money in the Trump years. Of 169 grants awarded during Chao’s tenure, the spokesperson said, Kentucky received five.

“The evaluation process, which is well known, originates with dedicated career staff thoroughly reviewing applications before senior review teams are involved,” the spokesperson said. “This evaluation takes thousands of hours across our discretionary grant programs. Similarly, a team of career staff handles cost-benefit and project readiness review. Discretionary grant programs are competitive and based on merit and how well the projects align with selection criteria.”

Nonetheless, one former career official who was involved in the grant review process under multiple administrations, said that once the findings of the professional staff are presented to the secretary’s office, politics often plays a role in who gets the money.

Putting a thumb on the scale for a favored project, the official said, “is really, very common, I would say across parties.”

“It’s always going to be political,” the former official, who spoke without attribution for fear of reprisals, added. “We have a merit-based process that we essentially ignore, [and] it’s really detrimental to meeting national transportation needs and having people feel like the process is worth engaging in.”

Virginia Canter, a former White House associate counsel under Presidents Barack Obama and Bill Clinton and current ethics counsel for the Citizens for Responsibility and Ethics in Washington, said showing political favoritism in awarding grants violates ethical standards. And when a potential beneficiary is a spouse, there’s an extra level of concern.

“There’s a standard for government employees; they’re expected to be impartial,” said Canter. “When you have a spouse who’s the head of an agency and the other spouse is a leading member of Congress — and their office is referring matters to the department, and they’re flagging things from donors, from people with particular political affiliations, who are quote-unquote ‘friends’ — it raises the question of whether the office, instead of being used purely for official purposes, is being used for political purposes.

“The fact that they’re both in these very important positions gives them the opportunity to be watching out for each other’s political and professional interests,” Canter said. “Anytime a member of Congress can bring home funding to his or her community it could make a difference. It shows the member is being responsive.”

McConnell, for his part, did not address questions about potential conflicts of interest in dealing with his wife’s department, instead touting his own clout.

“Every single day, Kentuckians from across the Commonwealth contact me with their concerns,” he told POLITICO in an emailed statement. “As Senate Majority Leader and a senior member of the Appropriations Committee, I am able to ensure that these issues — both large and small — are part of the national discussion. Kentucky continues to punch above its weight in Washington, and I am proud to be a strong voice for my constituents in the Senate.”

* * *

In his political career, McConnell has often touted specific grants as proof of his understanding of community needs.

McConnell has long had a special relationship with Owensboro, whose location on a bend of the Ohio River had once made it an ideal hub for manufacturing and agriculture. At the beginning of McConnell’s Senate career in the late 1980s, the decline of the tobacco industry and the rise of shopping malls far from the city center left Owensboro’s downtown dotted with boarded-up storefronts and empty streets that had once bustled decades earlier.

As McConnell rose to power in the national Republican Party in the 1990s and 2000s, he secured funds for Owensboro, earning him goodwill that helped him survive a close election in the 2008 Democratic wave. But after congressional Republicans banned earmarks in 2011, McConnell was forced to find other ways to bring federal resources back home.

Today, Owensboro’s growing downtown stands as a symbol of his success. City landmarks, street signs and plaques tout the senator’s role in helping revitalize downtown, especially along the city’s impressive new riverfront esplanade.

McConnell’s involvement with Owensboro began in earnest after 2003, when then-Owensboro Mayor Waymond Morris and future mayor, Ron Payne, visited McConnell at his Washington office and showed him a photograph of the eroding riverbank. The next year, the city rededicated a portion of the riverfront as “McConnell Plaza” and used more than $1 million in city funds to build a riverside park with ample green space, winding brick paths and outdoor seating for events like the town’s annual barbecue festival.

The city’s courting paid off in July 2005, when McConnell phoned new mayor, Tom Watson, and explained that he had secured $40 million in federal funds to overhaul the riverbank.

“Finally, at the end I said, ‘Can I ask you one question? Did you say $40 million?’” Watson told POLITICO. “And he laughed and hung up. I was stunned.”

Owensboro used the federal windfall as seed money for an ambitious overhaul of the entire riverfront, borrowing tens of millions of additional dollars to bring it to fruition over the next several years.

A riverwalk with pavilions and cascading fountains was installed, anchored on one end by a massive and elaborately designed playground named the best in the world by Landscape Architects Network — complete with oversized artificial tree sculptures, climbing walls, a concession stand, free Wi-Fi and rubber turf. A nearby plaque marking the playground’s rededication gives “special thanks to Senator Mitch McConnell.”

At the other end, a sparkling 184,000-square-foot convention center was erected at a cost of more than $50 million dollars — roughly twice the town’s initial budget for the project — in a bid to bring large conventions and other business to the downtown area. In stark contrast, a rusting one-story auto repair shop sits across the street, a reminder of the earlier decay.

McConnell’s support for Owensboro did not end at the riverfront. Mayor Watson recalled taking McConnell on a tour of the town’s aging H.L. Neblett Community Center, when suddenly water leaked through the roof, hitting McConnell’s ear and trickling down his shirt. Watson turned to the senator and suggested that the center needed a new roof. McConnell replied that it needed a new building — and then secured $3 million for renovations when he returned to Washington.

City officials also credit McConnell for serving Owensboro’s interests on national issues, including federal subsidies that kept airlines flying to Owensboro’s regional airport, as well as more recent efforts to legalize hemp as an agricultural commodity — a potential replacement for the city’s dying tobacco trade.

After stepping down for several years to focus on his prosthetics business, Watson was reelected as mayor in 2016. By then, the city’s riverfront investments were beginning to pay off. The downtown revitalization project mitigated the effects of the Great Recession in Owensboro and helped the city outpace Kentucky and United States overall in employment growth.

The city was still eyeing more projects to build on the earlier investments, but Owensboro’s remaining debt and scarce state resources limited the available funding options. Once again, the town turned to the federal government for support.

“The only money that’s still being circulated comes from Washington,” Watson explained.

In particular, the city wanted to widen and improve a section of Kentucky Highway 331 that connected the port’s river and rail shipping facilities to the federal highway system. Local homeowners and drivers complained that the highway’s two narrow lanes and limited sightlines throttled capacity and put local residents at risk.

In the post-earmark era, officials saw the federal Department of Transportation’s grant programs as their best bet to secure more funds, and believed their project had the merit to win in a competitive evaluation process. But success eluded them.

The city submitted its first grant application during the final months of the Obama administration, under a freight and highway improvement program called FASTLANE. But after a technical review by career DOT staff, the city’s application was passed over in favor of other projects.

According to Mattingly, local officials were undeterred and saw Chao’s appointment as Transportation secretary — and Owensboro local Todd Inman’s new role as director of operations in her office — as a valuable connection moving forward.

Back in Washington, Inman encouraged that perception. In a February 2017 email to McConnell’s chief of staff, he wrote, “The Secretary has indicated if you have a Ky-specific issue that we should flag for her attention to please continue to go through your normal channels but feel free to contact me directly as well so we can monitor or follow up as necessary.”

Owensboro submitted a second grant application in the first year of the Trump administration under the department’s INFRA grant program — the new administration’s successor to FASTLANE — which was likewise unsuccessful. Weeks before that application was due, McConnell’s office emailed members of Chao’s staff with the Owensboro Riverport Authority CEO’s contact information, requesting technical assistance for the riverport’s grant application. Derek Kan, Chao’s undersecretary for policy, forwarded the request to his deputy, who confirmed that they were following up.

Finally, in 2018, the riverport resubmitted a third time under the department’s BUILD program, a competitive infrastructure grant program that began under the Obama administration’s economic stimulus law. This time, the application was successful. City officials held a December news conference in front of a Christmas tree in City Hall announcing the $11.5 million federal award.

Four months later, as McConnell prepared to launch his reelection campaign, he called Mayor Watson and asked him to pull together a group of political and business leaders at the riverport to tout his role in getting Owensboro the grant award, Watson said. On April 22, within days of officially launching his 2020 campaign, the Senate majority leader stood inside a riverport building and celebrated his achievements.

“I can’t tell you how exciting it is for me to see what the riverfront has spawned,” McConnell told the assembled crowd. “Not only the project itself, but all around it.”

* * *

Inman, who is 48, grew up in Marshall County, Ky., about a two-hour drive from Owensboro. Soon after graduating from the University of Mississippi in 1993, he moved to Owensboro, where he ran a small insurance business from 1994 to 2017, according to his LinkedIn page.

He also became involved in Republican politics, running unsuccessfully for mayor of Owensboro in 2004 and doing advance work and event planning for statewide GOP candidates. He worked on McConnell’s campaigns in 2008 and 2014 and then became the deputy state director for Donald Trump’s 2016 campaign in Kentucky.

Two days after Trump’s inauguration, Inman excitedly announced his new job in the administration in a Facebook post picked up by local media.

“It's with great honor but also sadness that on Friday I accepted a Presidential appointment to work for the Honorable Elaine L. Chao as a Director in the cabinet of the United States Department of Transportation,” Inman wrote, according to the local radio station WBKR. “While this means I must leave my family friends and business in Owensboro it is humbling to know I can be of service to our country ... I look forward to the coming years of helping to support the secretary in her leadership of the Department of Transportation … ”

His first posting was as director of operations, from which he helped steer requests for grant assistance from McConnell’s office — at Chao’s direction, according to the emails.

“Cabinet members are known to be preferential to their own home state,” said Hudak, the Brookings scholar who has studied political influence in federal grant-making, adding that they tend to prioritize the home states of congressional leaders as well, “so you can have a sort of doubling effect.”

“There’s nothing illegal about her steering those funds to her husband’s home state, and her home state, as long as things are aboveboard,” Hudak said. “The question though is, how do you deal with conflicts of interests? And this is a clear conflict. ... Even if it’s not legally so, these are political offices, so the optics of this are important. In a business setting, you would put firewalls up to prevent those types of bad optics.”

McConnell, however, is making no effort to hide his influence as he ramps up his reelection effort. Though the Bluegrass State is heavily Republican, he, like senators of both parties who take on national leadership positions, knows he is both a prime target for out-of-state donors and vulnerable to charges that he has lost touch with his constituents.

New York Sen. Chuck Schumer, the Democratic leader in the Senate, has personally urged Marine veteran and former fighter pilot Amy McGrath to run against McConnell, saying the GOP leader “is more vulnerable now than ever before.”

At the grassroots level, Kentucky radio host Matt Jones has indicated he might be prepared to run as a populist Democrat against McConnell, a target of frequent barbs on his hugely popular sports show.

“What has Mitch McConnell done to help Kentucky?” Jones asked in a POLITICO interview. “Mitch McConnell has been a master — a master at helping wealthy business interests get wealthier. If there is a rich guy Hall of Fame, he should be in it.”

McConnell’s answer to these criticisms is clear: He’s used his influence to deliver on Kentucky’s priorities.

"All 100 senators may have one vote," McConnell told the Lexington Herald-Leader last year, "but they’re not all equal. Kentucky benefits from having one of its own setting the agenda for the country."