Wilbur Ross

  • Wilbur Ross, President Donald Trump’s commerce secretary, has financial ties to Russian President Vladimir Putin’s son-in-law.
  • The revelation was included in a massive trove of leaked documents, dubbed the “Paradise Papers,” published by the International Consortium of Journalists Sunday.
  • Ross failed to disclose his business ties to a member of Putin’s inner circle during his confirmation hearings earlier this year.

Newly leaked documents show that Commerce Secretary Wilbur Ross, President Donald Trump’s point man on trade and manufacturing policy, has a stake in a company that does business with a gas producer partly owned by the son-in-law of Russian President Vladimir Putin.

According to records obtained by the International Consortium of Journalists, Ross is an investor in Navigator Holdings, a shipping giant that counts Russian gas and petrochemical producer Sibur among its major customers. Putin’s son-in-law Kirill Shamalov once owned more than 20% of the company, but now holds a much smaller stake.

ICIJ disclosed the Ross holding as part of reporting on 13.4 million records of offshore entities in tax havens leaked to German newspaper Süddeutsche Zeitung. The newspaper then shared the records with ICIJ and a network of more than 380 journalists in 67 countries. The New York Times is its US partner in this inquiry, and reported on the Ross holding Sunday.

Commerce Department spokesman James Rockas said Ross “never met” Shamalov and has generally supported the Trump administration’s sanctions against Russia, according to the ICIJ report. Rockas added that Ross has withdrawn from matters related to transoceanic shipping vessels and has met the “highest ethical standards.”

‘Fake transparency’

Wilbur Ross Trump

The document dump indicates that Ross was not entirely forthcoming about his financial dealings during his confirmation process in January.

On January 15, Ross submitted a letter to the Department of Commerce detailing the steps he was taking to avoid possible conflicts of interest. As part of that, Ross said he would sever ties with over 80 companies he was linked to and which could have posed a dilemma if he joined the Trump administration.

However, as NBC News reported on Sunday, although Ross divested most of his holdings, he was not entirely transparent about the financial interests he continued to maintain.

In the letter, per NBC News, Ross created two separate lists: one that included the interests he planned to divest, and another that included those he planned to keep. Four out of the nine entities included on the second list were companies based in the Cayman Islands represented by Appleby, the Bermuda-based law firm where most of the “Paradise Papers” were originally housed.

The four Cayman Island companies are linked to two other financial entities: WLR Recovery Fund IV DSS AIV L.P., and WLR Recovery Fund V DSS AIV L.P. Both entities were listed in Ross’ financial disclosure form prior to his confirmation, but he did not say that he would retain his interests in them. Those two entities, in turn, control nearly a 33% stake in Navigator Holdings.

Kathleen Clark, an expert on government ethics at Washington University in St. Louis, told NBC News that the way Ross listed the companies was purposely vague. “I would say this gives the appearance of transparency. It’s sort of fake transparency in a sense,” she said.

The details are likely to add to the questions about ties between Russia and the Trump administration, connections that for months have shadowed the White House and are a focus of an investigation by special counsel Robert Mueller. Yet it wasn’t immediately clear how many partners Ross might have or what the profit-sharing agreement might be.

‘A company with crony connections’

Vladimir Putin

Sibur contributed 8% to Navigator’s revenue last year, according to reports filed with securities regulators. Russia’s energy sector is largely controlled by individuals with ties to state actors, including Putin.

But experts have long questioned Sibur’s authenticity.

Former State Department official Daniel Fried told the Organized Crime and Corruption Reporting Project that Sibur is “a company with crony connections.”

“Why would any officer of the US government have any relationship with a Putin crony?” he added.

Indeed, Sibur has several murky ties to Putin in addition to his son-in-law.

A big shareholder in the company is Gennady Timchenko, who was targeted by the US and other Western nations for sanctions after Russia’s invasion of the Ukrainian region of Crimea in 2014. A few months later, the US barred banks from providing long-term financing to a gas company belonging to another large Sibur shareholder, Leonid Mikhelson. Mikhelson has also been sanctioned by the Treasury Department for propping up Putin’s rule.

Sibur itself was not targeted by the US sanctions, but Bank of America and the Royal Bank of Scotland reportedly backed away from doing business with the company.

The Russian gas producer last year contributed $23 million to Navigator’s revenue, an increase of more than 40% in two years.

Richard Painter, the chief ethics lawyer in the second Bush administration, told The New York Times that he would be “very concerned that someone in the US government was making money from dealing with the Russians.”

Painter added that while Ross’ financial interest in Navigator does not violate any laws, it poses several ethical concerns, particularly if Ross could benefit from his connections to Sibur.

‘Your interest is aligned to mine’

Donald Trump Wilbur Ross

And Navigator appears to be happy with Ross’ role as the US’ chief trade policy czar. According to Bloomberg Businessweek, Ross told Navigator chief executive David J. Butters last November after he was nominated, “Your interest is aligned to mine.”

“The US economy will grow, and Navigator will be a beneficiary,” Butters recalled Ross saying.

Much of the new trove of files includes bank statements, emails, and loan agreements from Appleby, a law firm that helps set up offshore dummy companies and trusts. Appleby told the ICIJ that there is “no evidence” that it has done anything wrong.

Sunday’s revelations follow last year’s release of records from a Panama-based firm involved in setting up offshore accounts. That disclosure triggered investigations in several countries, the resignation of the prime minister of Iceland and ouster of the leader of Pakistan. The Panama Papers also revealed that close associates of Russia’s president Putin had been using the dummy accounts abroad to store their wealth, including a close friend who had $2 billion of offshore assets.

There are legitimate reasons for setting up offshore accounts, but lax regulation and anonymity in some jurisdictions make it easy to launder money, evade taxes, and avoid regulatory scrutiny. Critics of the widening gap between the super-wealthy and the rest have seized upon the use of tax havens as revealed in the Panama Papers as evidence of a crisis, and governments have promised to crack down.

SEE ALSO: Paul Manafort is entangled in a vast web of connections to Russia — here’s everything we know about so far

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