Several Senate Democrats are calling for new hearings and an inspector general investigation into Commerce Secretary Wilbur Ross after a trove of leaked documents showed he has interests in a company with ties to Russian President Vladimir Putin’s son-in-law.
The calls from Democratic members of the Senate Commerce Committee were prompted by reports detailing how shipping company Navigator Holdings, in which Ross holds a stake, did business with Russian energy company Sibur, which is partially owned by Putin’s son-in-law Kiril Shamalov and Russian oligarch Gennady Timchenko, Putin’s close friend.
“Sec. Ross’s stake in company so closely tied to Putin inner circle raises profound question: Can he put America’s interests before his own?” Sen. Richard Blumenthal (D-Conn.), who is among the senators calling for hearings and an IG investigation, tweeted Monday.
With regard to Navigator, the issue is not whether Ross disclosed this — he did — but how he was permitted to keep a stake in Navigator without running afoul of conflicts of interest. According to the Wall Street Journal, Ross’s recusal extends to “matters focused on transoceanic shipping vessels.” But how does he avoid addressing a giant topic like that? (“As commerce secretary, Mr. Ross oversees agencies with wide powers over trade and the U.S.’s economic relationship with foreign countries. His stake in a company with ties to Russian firms that are the subject of U.S. sanctions could come under particular scrutiny as the U.S. has escalated sanctions against Moscow in recent months,” the Wall Street Journal writes.)
Moreover, it is not just Navigator. Bloomberg reports, “In his January confirmation hearing, Senator Maria Cantwell, a Washington Democrat, asked Ross about his holdings in Diamond S Shipping Company. The company operates 33 tanker vessels that transport petroleum products, she said.” Ross has a 32 percent stake in Diamond S, according to a CBNC report. “Diamond S Shipping’s vessels have stopped in China more than 100 times since 2012, according to the Center for Public Integrity. Chengdong Investment Corp., which is controlled indirectly by China’s communist government, also held just under a 9 percent stake in Diamond S Shipping as of 2014.” Congress needs to ask Commerce and Ross how Ross, who is traveling with the president to China, avoids a conflict of interest.
Then there are the assets which Ross has divested. As of Nov. 1, a filing with the Office of Government Ethics shows he has completed his divestiture as required in his ethics agreement. However, he has submitted no documentation (pursuant to a “periodic disclosure form”) that would document sales of his enormous stock portfolio. So what happened to assets worth as much as $2 billion?
Forbes noticed the discrepancy as well. In an Oct. 16 article, Forbes reported: “Between the November election and January inauguration, he had quietly moved a chunk of assets into trusts for his family members, leaving more than $2 billion off of his financial disclosure report — and therefore out of the public eye. Ross revealed the existence of those assets, and the timing of the transfer, when Forbes asked why his financial disclosure form listed fewer assets than he had previously told the magazine he owned.” If Ross transferred these assets to a revocable trust — as President Trump did with his assets — it’s not divestiture at all. He’ll get them back and benefit from any increase in value. And that alarmed a group of Democratic senators. Sens. Tammy Baldwin (D-Wis.), Maggie Hassan (D-N.H.), Tammy Duckworth (D-Ill.), Blumenthal and Cantwell wrote a letter to the Office of Government Ethics. OGE said it would ask the Commerce Department. The Commerce Department has not responded to my inquiry about this or to inquiries about Navigator, Diamond S and potential conflicts of interest.
Finally, to top it off, Politico reports:
A top adviser to Commerce Secretary Wilbur Ross served on the board of Navigator Holdings, a shipping company whose clients include a Russian energy company with Kremlin ties, while she was working in the Trump administration.
Wendy Teramoto retained her seat on Navigator’s board after joining Commerce in mid-March as a part-time adviser to Ross, one of the most influential voices in President Donald Trump’s ear on global trade and economic policy. She also continued to serve as an executive of Ross’s private equity firm WL Ross & Co. after becoming a government employee.
Teramoto did not seem concerned about the appearance of conflicts of interest. (“Along with Ross, Teramoto attended President Donald Trump’s meeting with Chinese President Xi Jinping at the president’s Mar-a-Lago resort in early April, according to one of the government employees, who was familiar with the guest list. By mid-April, Teramoto was trading emails with officials at Commerce, Treasury, the National Security Council, and the U.S. Trade Representative.”)
Ross has insisted in TV appearances that he has been scrupulous in following recusal practices. In statements to other outlets, the claim that Commerce doesn’t regulate shipping has been made. This is no defense. Commerce regulates international trade, including sanctions. If sanctions are applied to major trading partners, shipping by transoceanic ships will slow or stop; by contrast, deals that open up trade would be a boon to Ross’s shipping interests. So just how does Ross steer clear of conflicts? Again, we asked a Commerce Department spokesman but got no answer. Congress needs to call Ross up, put him under oath and get answers. Meanwhile, it’s essential the inspector general at the Commerce Department conduct an investigation as to what controls are in place and how potential conflicts are monitored.
Ross did not “hide” his holding in Navigator or Diamond S, but it defies credulity that he could not envision the obvious conflicts and potential conflicts, especially with companies in which Russia and China have stakes. You have to wonder what advice he was getting, and if he was warned about a blow-up exactly like that which he is experiencing, if he didn’t divest. Oh, and he really needs to explain what happened to $2 billion in assets.
UPDATE: Forbes now says the $2 billion never existed, in essence claiming Ross lied about his wealth. “The Department of Commerce issued a statement saying the $2 billion gift never happened. ‘Contrary to the report in Forbes, there was no major asset transfer to a trust in the period between the election and Secretary Ross’s confirmation,'” the report states. “The only problem with that statement: The person who told Forbes that the transfer had taken place, that it had happened after the election and that it had meant more than $2 billion of family assets weren’t on the disclosure was none other than the sitting secretary of commerce, Wilbur Ross.” One wonders whether anyone else in the administration — say, Ross’s boss — has similarly exaggerated his wealth.
UPDATE II: “Criminals and kleptocrats every day exploit opaque corporate schemes to hide wealth,” Sen. Sheldon Whitehouse (D-R.I.) tells me. “Criminals do that to hide financial crimes and obscure ill-gotten gains. Kleptocrats do it to hide how they’re looting their countries.” He argues, “Wilbur Ross may have done it to avoid federal conflict of interest laws. For a cast of characters who show the importance of transparency into shell corporations, look no further than the Trump administration.” Perhaps an oversight hearing or two is in order.