Ross Says He'll `Probably' Sell Stake in Putin-Linked Company
(Bloomberg) -- Commerce Secretary Wilbur Ross said he will “probably not” maintain his stake in a shipping firm that does business with a Russian company with ties to the son-in-law of Russian President Vladimir Putin and an oligarch under U.S. sanctions.
“I’ve been actually selling it anyway, but that isn’t because of this,” Ross said Monday in an interview with Bloomberg Television.
Ross said in a government ethics disclosure filed after his nomination that he held an investment worth as much as $10 million in shipping company Navigator Holdings. But news organizations including the New York Times alleged over the weekend he did not disclose that the company’s clients include a Russian energy company called Sibur whose owners include Putin’s son-in-law and the oligarch, who is close to the Kremlin and has been sanctioned by the U.S. government.
A Democratic senator, Richard Blumenthal of Connecticut, called on the Commerce Department’s inspector general to open an investigation into the matter, which concerns Ross’s ownership stake in a shipping company that did business with a Russian firm.
“In concealing his interest in these shipping companies -- and his ongoing financial relationship with Russian oligarchs -- Secretary Ross misled me, the Senate Commerce Committee, and the American people,” Blumenthal said in a statement. “Secretary Ross’ financial disclosures are like a Russian nesting doll, with blatant conflicts of interest carefully hidden within seemingly innocuous holding companies.”
It is unclear whether Ross violated federal guidelines for ethics disclosures by not revealing the connections, and he isn’t alleged to have violated any law.
‘Nothing Whatsoever Wrong’
"We have no business ties to those Russian individuals who are under sanction," Ross said in the Bloomberg TV interview. Ross said he had nothing to do with the company’s negotiations with Sibur but that “there’s nothing whatsoever wrong with Navigator having a deal with them.”
Ross insisted he made proper disclosures in terms of his own connections in financial disclosure forms to the Office of Government Ethics. “There is no conflict of interest,” he said, because “we don’t regulate shipping.”
The Commerce Department said in an unattributed statement on Sunday that Ross was unaware who owned the Russian firm and has never met the owners, and that he has recused himself from transoceanic shipping matters.
“Secretary Ross works closely with Commerce Department ethics officials to ensure the highest ethical standards, and is committed to restoring our economy and creating American jobs,” the department said.
On Sunday, news organizations that are part of the Washington, D.C.-based International Consortium of Investigative Journalists, whose partners include the Times, published reports based on documents leaked from the Bermuda law firm Appleby to the German newspaper Suddeutsche Zeitung that were shared with the consortium. The ICIJ has termed the leak the “Paradise Papers” because of its similarity to the “Panama Papers” leak in 2016, from the Panamanian law firm Mossack Fonseca, for which the organization won a Pulitzer Prize.
The Appleby documents included details of Ross’s stake in Navigator Holdings and that its clients include Sibur, according to the Times.
Sibur was Navigator’s fifth largest customer in 2016, accounting for nearly 8 percent of its revenues, according to Securities and Exchange Commission filings. Mitsubishi Corp. is its largest client, according to data compiled by Bloomberg, accounting for just over 16 percent of revenue.
Ross’s overall holdings are estimated at $3 billion, according to the Bloomberg Billionaires Index.
There is no requirement for executive branch nominees to disclose clients or customers of a business in which they’re a shareholder. The disclosure requirement only applies to direct payments related to a nominee.
Walter Shaub, who was the director of the Office of Government Ethics at the time Ross filed his disclosure, signed off on the document. Shaub has since resigned and become a public critic of the Trump administration and its ethics practices.
The ICIJ hasn’t made the documents publicly available. Shaub didn’t immediately return messages on Sunday. Spokespeople for the White House didn’t immediately respond to inquiries.
Ross holds shares of Navigator Holdings in two funds, WLR Recovery Associates IV DSS AIV, LP and WLR Recovery Associates V DSS AIV, LP, according to his disclosure form, filed in December 2016. Ross listed nine underlying assets for those funds, which he valued in a range of $2 million to $10 million.
Government officials disclose the values of their assets in broad ranges; how much of the funds’ assets were invested in Navigator Holdings wasn’t disclosed.
On May 31, Ross sold between $15,001 and $50,000 worth of his stake in the company, according to a subsequent filing with the Office of Government Ethics.
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.
The only questions about Russia in his confirmation hearing dealt with cybersecurity, and whether Ross believed there should be consequences for Russian, Chinese and North Korean cyberattacks against U.S. companies. Ross also said that competition from Russian king crabs was an issue he’d look at related to U.S. fishing interests.
Ross’s ethics agreement didn’t require him to sell his stake in Diamond S Shipping. Ross said that no shipping issue had ever come before the Commerce Department, and so he wasn’t required to divest his holdings, though he would have no active role in the business.
His ethics agreement said he would recuse himself from any issues involving the companies in which he continued to hold assets.
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