Dark Money

Rewind ’22: Rossputin

Commerce Secretary Wilbur Ross is doing business with a close relative of Russian President Vladimir Putin and failed to disclose it.

Wilbur Ross Secretly Linked To Russian Firm With Putin Ties, Paradise Papers Show

NOV 5, 2017 | REPUBLISHED BY LIT: MAR 18, 2022

Commerce Secretary Wilbur Ross is doing business with a close relative of Russian President Vladimir Putin and failed to disclose their relationship while being confirmed for his Cabinet spot, documents showed Sunday.

A massive leak of legal and financial records unveiled Ross as the latest member of President Donald Trump’s White House team with secret ties to the Kremlin.

Ross, a billionaire New York businessman like Trump, still holds an interest in Navigator Holdings, a shipping company that has a strong business relationship with the Russian energy company SIBUR. The Russian firm is run by Putin’s son-in-law Kirill Shamalov and other members of the Russian strongman’s inner circle, some of whom have been sanctioned by the United States. SIBUR has been handsomely benefitting Navigator: According to financial records, the Russian firm brought in more than $51 million in revenue since 2016.

Ross’s Russia connection never came up during his confirmation process. It only emerged Sunday as part of the “Paradise Papers,” a new report on more than 7 million documents leaked to the International Consortium of Investigative Journalists, the same group that spearheaded the sprawling Panama Papers investigation last year.

The millions of documents from the Bermuda-based law firm Appleby reveal yet another web of financial intrigue spread across the globe in offshore accounts. Ross is, so far, the only White House worked directly implicated in the leak.

The 79-year-old investor retained financial interests in hundreds of companies when Trump tapped him for commerce secretary — a position putting Ross in charge of sectors where he stands to benefit. Ross divested most of his interests, claiming he wanted to avoid conflicts of interest.

But it turns out he privately held onto a few key assets, including his Navigator stake that ties him to Putin.

Senator Richard Blumenthal (D-Conn.) told NBC News he felt “astonished and “appalled,” as well as “misled,” since he and his colleagues in Congress believed Ross had cleared all of his interests. Blumenthal said he would call for an internal Commerce Department investigation of its secretary.

A Commerce Department statement claimed Ross recuses himself from any transoceanic shipping matters and works with the department’s ethics officials to “ensure the highest ethical standards.”

But the statement made no acknowledgment of Ross concealing the connection during his confirmation.

Ross, through a Commerce Department spokesperson, issued a statement saying that he recuses himself as secretary from any matters regarding transoceanic shipping, and said he works closely with ethics officials in the department “to ensure the highest ethical standards.”

Ross shorted Russian-linked shipping company ahead of Paradise Papers

The U.S. Commerce Secretary shorted stock in Navigator Holdings just days after reporters informed him they were about to reveal his holdings in the firm.

JUN 18, 2018 | REPUBLISHED BY LIT: MAR 18, 2022

U.S. Commerce Secretary Wilbur Ross shorted stock in a Kremlin-linked shipping firm days after reporters working on the Paradise Papers informed him that they were about to reveal his holdings in the firm, according to a new report by Forbes.

While serving as Commerce Secretary, Ross had retained a financial stake in the shipping firm Navigator Holdings, which earns tens of millions of dollars each year from a Russian energy company owned by oligarchs sanctioned for their close ties to President Vladimir Putin. On November 5, 2017, the International Consortium of Investigative Journalists and media partners around the world revealed this connection when they published the Paradise Papers investigation.

Today’s story by Forbes shows that Ross took a short position on Navigator stock soon after reporters reached out to him for comment – positioning him to profit from the advance notice of a potentially damaging media story.

ICIJ spent more than six months researching Ross as part of the Paradise Papers investigation, working closely with media partners including the New York Times. On Oct. 26, 2017, New York Times investigative reporter Mike McIntire sent a letter to the U.S. Department of Commerce requesting comment from Ross on behalf of the Paradise Papers team.

In the days before publication, McIntire corresponded with Commerce Department officials and received a statement from the department on Nov. 1. The statement did not dispute the main findings of the story and said that Ross “works closely with Commerce Department ethics officials to ensure the highest ethical standards.”

It turns out that the Commerce Secretary had been busy in the days after receiving the letter.

On Oct. 31 – the day before the Commerce Department’s statement was sent to the New York Times but not yet public – Ross took out a short position in Navigator stock valued between $100,001 and $250,000, Forbes reported.

Taking a short position on a stock is to bet that the value of the stock will decrease. Ross’ move meant that if Navigator shares went down after publication of the Paradise Papers, he could cash out with a gain. Navigator stock declined four percent in the 11 days before Ross exited his short position with an apparent profit, according to Forbes.

Ross had previously served on the board of Navigator Holdings and his private equity firm, the WL Ross Group, had long been its largest shareholder.

Federal law prohibits government officials from using information obtained by reason of federal employment for private gain. If an official obtains such information and knows that is not available to the general public, they are prohibited from profiting from it, said Virginia Canter, the Chief Ethics Counsel for the watchdog group Citizens for Responsibility and Ethics in Washington.

“The Office of Government Ethics have certified that the transactions documented are in compliance with federal ethics requirements,” a spokesman for the Commerce Department told ICIJ.

The federal disclosure forms revealing Ross’ short position with Navigator were posted today by the Office of Government Ethics, he added.

Shortly after the publication of the Paradise Papers, Ross pledged to divest his shares in Navigator Holdings. In December, Commerce Department spokesman James Rockas told ICIJ that Ross “has now completed the process he began months ago of divesting” from Navigator.

Neither Ross nor the Commerce Department has provided ICIJ with documentation of this divestment. In April, Rockas told ICIJ that Ross’ interest in the companies “was divested through a transfer to an irrevocable trust,” a transaction which is not subject to federal financial disclosure regulations.

In May, an ICIJ reporter asked Ross at an event at the National Press Club why he had retained his investments in Navigator for nearly a year after taking his cabinet post in light of the company’s dealings with sanctioned Russian oligarchs.

“The Office of Government Ethics did not require the sale of these holdings,” Ross said. And since the Russian company owned by sanctioned oligarchs was not itself sanctioned, Ross added, “there was no reason not to hold it.”

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Rewind ’22: Rossputin
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