AMERICA'S ELITE

Questions Remain Over Ross’ Disclosure As He Confirms Divestment

The U.S. Commerce Secretary has sold his stake in a shipping firm with Russian ties, but did he disclose enough information prior to his appointment?

U.S. Commerce Secretary Wilbur Ross has sold his stake in a shipping firm with Russian business connections, but questions remain over whether the public and senators voting on his confirmation were given enough information prior to approval of his appointment to the cabinet.

The news of the divestment from a Commerce Department spokesperson comes just weeks after the International Consortium of Investigative Journalists (ICIJ) and its media partners revealed details of Ross’s investments as part of the Paradise Papers investigation.

The revelation of Ross’ financial stake in a shipping firm that did business with close associates of Russian President Vladimir Putin caused an uproar among congressional Democrats and government transparency advocates, who alleged Ross had not presented the full picture of his ties to the politically connected firm, Navigator Holdings, prior to assuming his role within the Trump administration.

His ongoing interest in Navigator presented a bevy of concerns for critics scrutinizing Ross’s ability to act impartially in his government post.

Shortly after the report, Ross said he would “probably not” keep his stake in Navigator. In confirming his divestment from Navigator and Diamond S Shipping — a firm also named in ICIJ’s initial reporting — a spokesperson for Ross said the sale had been in the works for months.

“Secretary Ross was not required by his ethics agreement to divest of either Navigator Holdings or Diamond S Shipping but has now completed the process he began months ago of divesting from both,” Commerce Department spokesman James Rockas told ICIJ.

As commerce secretary, Ross is in a position to shape consequential changes to global trade policy under the administration of President Donald Trump. The associations revealed in the Paradise Papers raised concerns that conflicts of interest might arise in policy matters that could affect Navigator Holdings.

Ross’ ties to the firm also raised geopolitical questions. A major customer of Navigator, which is registered in the Marshall Islands tax haven, is the Russian energy firm Sibur. Two of Sibur’s key owners are Kirill Shamalov, who is married to Putin’s youngest daughter, and Gennady Timchenko, a sanctioned oligarch whose activities in the energy sector, the Treasury Department has said, were “directly linked to Putin.”

Even with Ross’s divestment from Navigator, questions still remain about his relationship with the shipping firm and about whether he gave the full picture of his international business ties before he assumed his current position.

On Friday, the non-profit advocacy group Citizens for Responsibility and Ethics in Washington (CREW) filed a complaint alleging that Ross’ public disclosure of his stake in Navigator Holdings and other entities included “apparent omissions and other irregularities” and fell short of what is required of nominees for cabinet positions.

The complaint urged the Commerce Department’s inspector general to investigate whether Ross has properly reported all of his assets on his public disclosure and whether he has fully divested himself from holdings that may pose a conflict of interest.

“Assets held by government officials should not be affecting policy,” Jordan Libowitz, communications director for CREW told ICIJ. “In the case of Ross, he reported his holdings in Navigator in a convoluted manner that made it virtually indecipherable and raises questions about whether he was doing that to try to hide the value of the holding.”

The complaint alleges that Ross appears to have violated conflict of interest rules by participating in a meeting with policy matters at stake that “could enhance the value of his natural gas exploration holdings and his shipping interests in Navigator Holdings Ltd,” according to a CREW press release.

During confirmation hearings earlier this year, Ross was questioned about his business ties to Russia and any potential conflicts of interest, yet Ross’s stake in Navigator was only scrutinized after he took over as head of the Commerce Department.

Now that Ross has divested from Navigator, new questions have arisen about Ross’s chief of staff, Wendy Teramoto, who was previously employed by his private equity company, WL Ross & Co and was a member of Navigator’s board of directors. On Friday, ProPublica reported this week that, even as Ross announced his divestiture from Navigator, Teramoto had retained her stake in the shipping firm – said to have been worth $118,000 as of this past March.

A Commerce Department spokesman told ICIJ that, prior to his divestment, Ross had been recused from “matters having a direct and predictable effect on transoceanic shipping companies in which he had an interest, including Navigator Holdings and Diamond S Shipping.”

“Ms. Teramoto continues to be recused from such matters,” he said.

Department spokesman Rockas has repeatedly declined requests to elaborate on what these matters involved.

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