Wilbur Ross Invested In Company With Close Ties To Vladimir Putin
The Trump administration has proved one of the most scandalous in recent memory — from the ongoing shadow of possible campaign-related collusion with Russia to the promulgation of rampant falsehoods — but one scandal of particular note is the degree of unethical behavior and appointments by President Donald Trump and those with whom he has chosen to surround himself.
Joining the list of Trump administration officials stricken with conflicts this summer was Commerce Secretary Wilbur Ross, whose investment in a shipping firm tied to prominent Russians was revealed by Forbes magazine in June.
The magazine disclosed that Ross had kept stakes in Chinese-owned companies, a shipping firm tied to leading Russians, and a Cypriot bank while holding public office. In some cases where he did sell his shares, family members retained interests that some ethics experts said could pose conflicts of interest for Ross in trade talks.
After Ross learned that Forbes was preparing an article about his investments last fall, he short-sold stock in the Russian-linked company — a risky tactic used for by sophisticated investors betting that a stock price will go down.
Oddly enough, the Post notes, when Ross went before the Senate Finance Committee following the report, committee members appeared uninterested in the secretary’s behavior — just one senator inquired on the issue.
Sen. Ron Wyden (Oreg.), the committee’s ranking Democrat, ventured alone to criticize Ross’s actions:
“You don’t need a thick government rule book to recognize flagrant conflicts of interest when they’re brought into public view,” Wyden said. “When it comes to trade, Americans have a right to know it’s their best interest Trump administration officials are looking out for at the negotiating table. The stories that we have seen in the last few days call that into question.”
Naturally, Ross went on the defensive, asserting there existed a perfectly reasonable explanation for his investment decisions:
In a [June statement], he said critics have made “unfounded allegations” that he engaged in insider trading. “My overriding concern is to comply with the ethics laws and my ethics agreement, and to go beyond required divestitures to remove any appearance of a conflict of interest,” he said.
Prior to Forbes’ story, Ross believed he had fully divested stock in the Russian-linked shipping firm Navigator — a company doing “business with a Russian energy firm whose directors included a Russian oligarch who was subject to U.S. sanctions and a son-in-law of Russian President Vladimir Putin” — only to discover in October 2017 that this was not the case.
“In keeping with my earlier decision to divest Navigator stock to remove any appearance of a conflict of interest, I immediately sold the shares I had just learned of,” Ross said.
This is where the situation became tricky, according to the secretary:
Doing that was complicated, Ross explained. He said he could not sell the shares directly because they were being moved from a trust managed by an agent to one of Ross’s brokerage accounts.
“Here is where the transaction listed as a short sale comes in,” Ross said in the statement. “The New York Stock Exchange (NYSE) requires that a transfer of shares occur within two days of a sale. As a result, to complete the divestiture as quickly as possible, I had to borrow shares in Navigator equal to the number of shares I sold to complete the transaction under the NYSE rules.” He said he “then replaced the borrowed shares with the shares held in my name when I received them a few weeks later.”
Ross’s explanation did little to convince ethics experts that his actions were on the up and up.
“I don’t find it to be a plausible or credible answer,” said Norman Eisen, the chair of Citizens for Responsibility and Ethics in Washington, who served as chief ethics counselor to President Barack Obama.
“I certainly wouldn’t have recommended shorting the shares after he received bad news, arguably insider information, that would cause the stock to go down,” Eisen said. He said shorting stock “only protects you if the stock goes down, and he had arguably insider information that that could happen.”
This and other ethics issues surrounding Ross’s position within the Trump administration are nowhere near unprecedented under the current president, Wyden noted during the Senate hearing.
“This, unfortunately, is not a one-off story,” Wyden said at the committee hearing. “Virtually every day in the news, you get whacked over the head with another report about Trump officials violating ethics rules or coming into questionable windfalls.”
Image credit: Jay Premack / USPTO