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Transportation Secretary Elaine Chao designated one of her staffers to direct $78 million in federal grants specifically to transportation projects in her husband Senate Majority Leader Mitch McConnell's home state of Kentucky, Politico reported Monday.

Politico reported that Chao's chief of staff Todd Inman, who has strong ties to Kentucky, played a critical role in getting an $11.5 million grant and a $67 million grant approved.

Chao's reported diversion of federal grant money to her husband's home states alarmed ethics experts, who said the arrangement could represent a troubling conflict of interest.

Over the past few weeks, Chao has come under scrutiny for other ethics concerns.

According to a June 2 report in The New York Times, Chao attempted to arrange for members of her family to travel and attend official meetings with her on a planned 2017 official visit to China, which was eventually canceled.

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US Transportation Secretary Elaine Chao designated one of her staffers to direct $78 million in federal grants specifically to transportation projects in her husband Senate Majority Leader Mitch McConnell's home state of Kentucky, according to a Monday report in Politico.

Politico reported that Chao assigned an aide by the name of Todd Inman, also a Kentucky native plugged into the state's political world, to work on securing grants for infrastructure and transportation projects in Kentucky that McConnell expected would benefit him politically.

Multiple local Kentucky and Transportation officials told Politico that Inman not only served as an important liaison between them and Chao who "has her ear 24 hours a day, seven days a week," but Kentucky received far more special attention from the Department than any other state.

According to Politico, Inman's influence helped secure $11.5 million in federal grant money for two major projects in Owensboro, Kentucky, and a $67 million grant for rural road improvements in Kentucky's Boone County finalized in June of 2018.

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"Todd probably smoothed the way, I mean, you know, used his influence," the county executive for the area including Owensboro told Politico. "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?"

Later, McConnell held a campaign event in Owensboro where he said the project had "done a lot to transform Owensboro, and I was really happy to have played a role in that."

In a statement to INSIDER, a spokesman for the Transportation Department said linking Chao's office to the awarding of federal contracts was "misrepresenting the grant application process," and that there was no preferential treatment for McConnell's home state.

"DOT's Chief of Staff does not offer technical assistance to grant applications, and no state receives special treatment from the Department," the spokesman said. "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."

A Transportation Department official also pointed out to Politico that Kentucky places 25th among all 50 states in grant money received, earning just five out of 169 grants approved since Chao has served as secretary.

But the Politico report still alarmed ethics experts, who said the reported arrangement could represent a troubling conflict of interest.

John Hudak, a Brookings Institution scholar, told Politico that "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."

"This is the sort of thing that should lead to the impeachment of a corrupt official -- that is, if her corrupt husband weren't in a position to block that impeachment," wrote Walt Shaub, the former director of the Office of Government Ethics. "We are now a full-fledged banana republic. We have nothing to teach the rest of the world except what not to be."

One former transportation official who spoke on the condition of anonymity to Politico said it's par for the course for federal transportation grants to be doled out along political and strategic lines.

"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," the person said.

Read more: Trump's Transportation Secretary Elaine Chao reportedly tried to bring family members to official meetings in China

A spokesperson for the House of Representatives' Committee on Transportation and Infrastructure, which oversees the Department of Transportation, did not immediately respond to INSIDER's request for comment on whether they planned to hold hearings into the matter.

Over the past few weeks, Chao has come under scrutiny for other actions that appeared to be a possible conflict of interest.

According to a June 2 report in The New York Times, Chao attempted to arrange for members of her family — who own a major shipping company in China — to travel with her on a 2017 government trip to China and sit in on official meetings with her, but ended up cancelling the trip altogether when officials from the State and Transportation Department raised ethics concerns.

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