A watchdog group on Monday accused Commerce Secretary Wilbur Ross of several instances of criminal conflict of interest — in addition to lying in financial filings and to Congress — over his failure to divest millions of dollars in holdings in several companies, the value of which he may have knowingly impacted as secretary.
Much of the Campaign Legal Center’s (CLC) 115-page complaint to the Commerce Department’s inspector general was already known. Still, the report provided a granular view of the facts: that Ross improperly (and possibly illegally) maintained financial interests in several companies, whose value his decisions as secretary then affected, even after declaring that he’d divested from many of them.
One example is Invesco Ltd. Between the time Ross claimed to have sold his shares in the company and when he actually sold his shares, the value of his holdings rose by between roughly $1.2 million and $6 million.
“Ross held Invesco stock throughout most of 2017 while he was participating personally and substantially in the steel investigation,” the report states, referencing the inquiry Ross led into whether the U.S. should apply tariffs to imported steel on national security grounds. (Trump ultimately accepted Ross’ advice that it should.)
Ross and his spokespeople at the Commerce Department have dismissed these multimillion-dollar discrepancies as simple mistakes, something CLC demonstrated was “implausible.”
The complaint goes further, offering new information about specific instances in which Ross’ actions had a “direct and predictable effect” — the criminal definition — on companies in which he had a financial interest.
For example, one wholly-owned subsidiary of Invesco is WL Ross & Co. LLC, known as the company Ross used in a past life to gobble up struggling American steel companies like Bethlehem Steel and Acme Steel. By April 2017, the company had joined forces with China’s largest steel maker and others and was exploring acquisition opportunities in the country.
Even if the steel tariffs question hurt Invesco’s shareholders, the complaint said, “As a sophisticated investor, Ross may have thought his consideration of a steel tariff would advantage WLR’s negotiations, or he may have hoped to minimize the impact of a tariff by recommending a favorable procedure for granting exclusions.”
The same potential criminal conflict of interest applies to Ross’ then-unsold stock in The Greenbrier Companies, a railcar manufacturer dependent on imported steel. CLC’s overview of the timeline presents a clear case of one potential conflict of interest violation:
On Apr. 21, 2017, Ross issued a formal notice soliciting public comments and announcing a hearing on his steel investigation. On May 18, 2017, Ross took Greenbrier CEO William Furman to dine at the White House. On May 24, 2017, Ross presided over the public hearing on the investigation. On May 30, 2017, Furman filed a public comment expressing concern that the investigation would affect Greenbrier and asking that an exception be made for his Japanese steel supplier. On May 31, 2017, Ross divested some of his Greenbrier stock.
Greenbrier was one of a few companies whose stock Ross shorted — a maneuver usually used to bet against a company’s success — rather than following traditional methods to remove conflicts of interest, as he claimed was his intention. The Office of Government Ethics chastised Ross for the short sales and other undivested holdings in July.
Another company whose stock Ross shorted was Navigator Holdings Ltd., a Kremlin-connected shipping company specializing in natural gas products. In over 40 pages extensively detailing Ross’ interests in the company, the board of which he chaired at one point, CLC argued that “Ross participated personally and substantially in several particular matters directly and predictably affecting Navigator’s financial interests: the Trump administration’s effort to promote the LNG trade, seven trade agreements, and an investigation to determine whether the United States should impose a tariff on steel imports.”
In a press release announcing the report Monday, CLC’s ethics counsel, Delaney Marsco, said “Unless the Inspector General finds new information exonerating Ross, he at least appears to have violated the law several times.”
A lawyer for Ross, Theodore Kassinger, told several outlets:
Secretary Ross has not violated any conflict of interest law or regulation. He has not participated personally and substantially in, nor taken any action in regard to a particular matter that would have had a direct and predictable effect on his financial investments. He continues to follow the guidance of Commerce Department ethics officials regarding the matters in which he is personally involved. He has divested a very substantial part of the investments he held when he assumed the office of Secretary, and he has pledged to divest other remaining holdings even though he is not obligated to do so.
Read the full complaint here:
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