Wilbur Ross, Trump's Elusive Swamp Survivor
(Bloomberg Opinion) -- Wilbur Ross, like his former White House colleague, Scott Pruitt, is an interesting and unevolved version of Homo Paludosus: mired in myriad and ongoing ethical conflicts, subjected to tawdry revelations about his finances and business practices, and yet apparently impervious to extinction.
Ross, to be sure, hasn't trafficked in all of the deeply swampy acts that made Pruitt so scandalicious. As far as we know, Ross hasn't enlisted his security detail and staff to go shopping for him, he hasn’t hit up lobbyists for bargain condo rentals, and he hasn't asked a big corporation to give his wife a business.
On the other hand, Ross, a veteran Wall Street dealmaker and investor, joined President Donald Trump's cabinet as secretary of commerce already saddled with ongoing investments in companies and industries that would be directly affected – and possibly helped – by his policy decisions.
Ross is 80 and his biography on the Commerce Department website suggests how hard it would have been for him from his very first day in office to chart an unconflicted course:
“Secretary Ross is the former Chairman and Chief Strategy Officer of WL Ross & Co. LLC and has over 55 years of investment banking and private equity experience. He has restructured over $400 billion of assets in the airline, apparel, auto parts, banking, beverage, chemical, credit card, electric utility, food service, furniture, gypsum, homebuilding, insurance, marine transport, mortgage origination and servicing, oil and gas, railcar manufacturing and leasing, real estate, restaurant, shipyard, steel, textile and trucking industries. Secretary Ross has been chairman or lead director of more than 100 companies operating in more than 20 different countries.”
Valuable experience is embedded in that resume and in a different administration Ross's financial conflicts might have been addressed early and effectively to make room for unencumbered use of his insights. Instead, it's as if Trump brought Ross aboard to be a conflicts magnet, someone who would have such a huge stockpile of ethical questions sticking to him that everyone else in the White House would look friction-free in comparison – including, of course, Trump himself. (As it turned out, Pruitt's flagrant swampiness was so sprawling that he turned out to be the one often diverting attention from Trump and Ross's conflicts.)
Pruitt has now departed, however, and there has been a torrent of recent and problematic disclosures about Ross. On Tuesday, Dan Alexander, a Forbes reporter, published a lengthy feature outlining how Ross, “a man obsessed with money and untethered to facts” may have wrongly or unlawfully pocketed about $120 million from business associates over the years – which, Alexander noted, could rank Ross “among the biggest grifters in American history.” (Ross responded to Forbes by saying that the Securities and Exchange Commission has never initiated any enforcement action against him.)
Like Trump, Ross inflated his net worth when Forbes asked about his wealth. Alexander reported last November that Ross had been trying to convince Forbes in 2016 that he was worth $3.7 billion before Forbes finally settled on a figure of $2.9 billion. Alexander discovered that the actual figure appeared to be about $700 million and Ross was simply lying about the missing billions.
Alexander also recently parsed a litany of Ross's financial conflicts of interest, noting that all of it added up to an “ethical nightmare.”
Just a few weeks ago, Ross said that he would divest all of his equity investments after the Office of Government Ethics warned him that a failure to do so “created the potential for a serious criminal violation.”
It certainly took a long time for Ross to divest. He has been commerce secretary since February of last year and the ethics agreement he signed when he took the job obligated him to divest some of his assets (like his holdings in Invesco Ltd.) within 90 to 180 days of his confirmation. It wasn't until last December, however, that Ross sold an Invesco stake worth as much as $50 million. Ross said his failure to sell his Invesco shares on time was due to “inadvertent errors.” He also failed to sell investments in Greenbrier Companies Inc., Sun Bancorp Inc., and Air Lease Corp. on time. Ross said that was because he didn't know he still owned those assets.
The OGE also took Ross to task last month for using short sales of five stocks to meet some of his divestment deadlines. Among those shorts, the OGE noted, was Navigator Holdings Ltd., a shipping company that did business with a firm linked to Russian President Vladimir Putin. That sale occurred shortly after Ross was questioned by the New York Times about an article reporters were preparing on the Navigator investment. (Matt Levine, my Bloomberg Opinion colleague who helped me polish the Latin in the top of this column, has argued that Ross's sale didn't amount to insider trading; others contend it might have.)
While serving as commerce secretary, Ross also had an interest in a company, Diamond S Shipping Group Inc., that is partially owned by the Chinese government and does business in China. Ross, of course, has been in the thick of trade negotiations with China. Ross also has held stakes in natural gas companies while he negotiated a trade deal meant to increase natural gas exports to China.
Ross co-founded a shipping firm, Nautical Bulk Holdings Ltd., that transports South Korean steel (and Trump granted South Korea an exemption from his steel tariffs). That one looked so bad that even Fox News had enough. A host there criticized Ross on-air in June, pointing out that the commerce secretary was “negotiating over South Korean steel imports while making money from importing South Korean steel.”
One of Ross’s more curious investments involves the Bank of Cyprus. Ross was once the vice-chairman of the bank, an institution that has attracted the interest of Special Counsel Robert Mueller because Trump’s former campaign manager, Paul Manafort, now on trial in Virginia for tax and bank fraud, had accounts there.
A former vice-chairman of the bank once worked alongside Putin at the KGB, and five other Russians sat on the bank's board before Ross got more deeply involved. (Ross reportedly forced out that group when he first took a stake in the bank three years ago.)
Then there’s Dmitry Rybolovlev, a Russian billionaire who bought a Palm Beach mansion from Trump in 2008 for $54 million more than Trump paid for it just four years earlier. He once was the biggest shareholder in the Bank of Cyprus. (Rybolovlev's investment in the bank appears to have been wiped out before Ross became involved with the bank.)
It's hard to discern how many of Ross’s business intersections in Cyprus were tangential and how many might have been more fundamental. But added to the mass of other potential or actual conflicts that have dogged Ross during his entire tenure at the Commerce Department, it's a wonder that he has managed to outlast Pruitt. Then again, he's just been following the president's lead when it comes to ignoring financial conflicts.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Timothy L. O’Brien is the executive editor of Bloomberg Opinion. He has been an editor and writer for the New York Times, the Wall Street Journal, HuffPost and Talk magazine. His books include “TrumpNation: The Art of Being The Donald.”
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