Donald Trump's transport secretary designated a special liaison to help with grant applications from her senator husband’s state, paving the way to fund projects worth $78m (£62m), it has been reported.

Elaine Chao personally asked a Department of Transportation aide to serve as an intermediary and advisor to Republican Senate majority leader Mitch McConnell and his Kentucky state officials, according to emails seen by Politico.

The projects funded – as Mr McConnell prepared to campaign for re-election – reportedly included road improvements in Republican political strongholds for which grant applications had previously been rejected.

Walter Shaub, a former director of the US Office of Government Ethics, described the arrangement as “the sort of thing that should lead to the impeachment" of an official.

“We are now a full-fledged banana republic,” the vocal Trump critic added.

Ms Chao and her aide, Todd Inman, have reportedly met annually with a delegation from Owensboro, a river port city in Kentucky that has long connections with Mr McConnell, over the last three years.

In their April 2017 meeting, according to people present, they discussed two projects of local economic importance – a plan to upgrade road connections to a commercial port and a proposal to reclassify a major road a branch of motorway.

Following the meeting, Mr Inman is said to have emailed the port authority with advice on how to improve its application. He also allegedly discussed the project by phone with Al Mattingly, the chief executive of Daviess County, which includes Owensboro.

Mr Mattingly said Mr Inman had been instrumental in helping to secure the DOT grant.

“Todd probably smoothed the way, I mean, you know, used his influence,” he 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?

“Let’s put it this way: I only have her ear an hour when I go to visit her once a year. With a local guy, he has her ear 24 hours a day, seven days a week.”

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John Hudak, a senior fellow in governance at Washington DC’s Brookings Institution, said the case raised ethical questions.

“Where a cabinet secretary is doing things that are going to help her husband get re-elected, that starts to rise to the level of feeling more like corruption to the average American,” he said. ”I do think there are people who will see that as sort of ‘swamp behaviour’’.”

A DOT spokesman told The Independent that Politico’s story “intentionally misleads readers, misrepresenting the grant application process and disregarding key facts”.

“A few grants to one state have been selectively isolated to misrepresent the work DOT does across the country,” he said.

The spokesman added: “DOT’s chief of staff does not offer technical assistance to grant applications, and no state receives special treatment from the department.

“Our team of dedicated career staff does an outstanding job evaluating hundreds of applications for these highly competitive grant programmes, a thorough process developed well before this administration.”