SEVERE WX : Severe Thunderstorm Watch View Alerts

Legal watchdog wants Commerce IG to investigate Wilbur Ross

A government watchdog group is calling for the Commerce Department's inspector general to investigate whethe...

Posted: Aug 14, 2018 9:41 AM
Updated: Aug 14, 2018 9:41 AM

A government watchdog group is calling for the Commerce Department's inspector general to investigate whether Secretary Wilbur Ross violated criminal conflict of interest laws, in a detailed, more than 100-page report it filed with the IG Monday and was obtained by CNN.

In the extensive report supporting its request the Campaign Legal Center also claims the Secretary may have made false statements and omissions on a government form. While the allegations aren't new, CLC is calling on the inspector general to investigate whether Ross acted knowingly when he allegedly violated the law.

Business figures

Wilbur Ross

Ethics

Society

Banking, finance and investments

Business, economy and trade

Exports and imports

Financial markets and investing

International trade

Trade and development

The report may provide a road map for how to analyze whether a government official might have violated the criminal conflict of interest law but it's unclear how the IG will treat CLC's request.

The Commerce Department did not comment on the report and referred CNN to Ross's attorney. Ross's attorney, Theodore W. Kassinger, said in an emailed statement: "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."

The CLC, which has largely focused on campaign finance violations since it was founded in 2002, is filing its request after months of media reports and lawmakers asking questions about Ross's financial holdings, potential conflicts and lapses in reporting on his financial assets.

Last month, the Office of Government Ethics took Ross to task for what it said were inconsistencies in his financial disclosure forms and for Ross's failure to divest certain investments "created the potential for serious a criminal violation."

The federal conflict of interest law bars government officials from working on policies that have a direct impact on their assets.  To address these conflicts, government officials either divest the assets that present a possible conflict or recuse from the policy work.

In three separate cases, CLC alleges that Ross maintained assets that presented conflicts and he did not recuse himself from policy work that impacted those assets.

Ross's attorney, Kassinger, said "CLC's framing of these assertions and their conclusion are simply wrong."

In one case, the report highlights Ross's interests in railcar company, Greenbrier, which uses steel as a raw material.

Ross launched an investigation into steel imports in the spring of 2017, ahead of the Trump administration's decision to slap steep tariffs on imported steel and aluminum. In public comments to Commerce on May 30, Greenbrier expressed concern about the possibility of a steel tariff and the impact it could have on its business.

The conflict of interest law prohibits a government employee from participating in any matter that impacts his or her own financial interests—regardless of whether it results in a gain or loss. The group lists several reasons for why the law is blind to whether an employee profits from a conflict.

For example, "an employee who is a sophisticated investor might be acting strategically to achieve a long-term gain from a short-term loss."

Ross divested his shares in the company in three different transactions in 2017: March, May and December, according to government filings called periodic transaction reports. CLC alleges that a notation in December's transaction report "seems to claim that he [Ross] didn't know he owned Greenbrier until December" or that 'he discovered his ownership of Greenbrier stock on three separate occasions in 2017 and sold the stock after each discovery."

CLC called the first interpretation "implausible" and the second problematic because there's no evidence that Ross recused from the steel investigation once he discovered he held Greenbrier stock.

Greenbrier did not immediately respond to a request for comment.

"Even if Greenbrier truly surprised Ross three times in 2017, there is a problem with his participation in the steel investigation," CLC contends.

Ross's attorney said "Secretary Ross's ethics agreement did not require him to recuse" from the steel tariffs and Greenbrier. He said current law would not require Ross to recuse himself on "such broad topics."

"Ross is full of excuses," said CLC director Brendan Fischer. "On the one hand he claims to be a sophisticated investor who is now in charge of a country with a 19 trillion-dollar GDP and on the other hand he seems to be a klutz who has no idea what he's invested in, has no idea what he's divested from. He can't have it both ways."

Democratic lawmakers asked the IG to review Ross's compliance with ethics requirements at least twice. In November, a group of six congressional members led by Senator Richard Blumenthal sent the IG a letter, which was followed by a separate request by ranking members of House Committees with jurisdiction over Commerce.

CNN asked the Commerce IG whether it had responded to the Congressional requests. The Commerce IG spokesperson said "the matter is under review."

It's unclear how CLC's report will impact the IG's ongoing examination.

In addition to the Greenbrier example, CLC's report includes two other allegations of possible violations of the conflict of interest law.

In January 2017, Ross pledged to divest his stock in his former employer Invesco, the company that owns Ross's private equity firm, and recuse from matters impacting Invesco until the divestment was complete.  CLC alleges he didn't immediately divest and didn't recuse himself either. An Invesco subsidiary, W.L. Ross & Co., LLC, "closed a deal for a multi-billion dollar investment in Chinese steel" a month after Ross entered government, said CLC.

"Given the size of this investment, planning and negotiations for the deal would have begun long before Ross left the company to assume his current position as Commerce secretary," says CLC. Later the report notes "Such a massive undertaking would not have escaped Ross's notice as Chairman and Chief Strategy Officer."

Ross's financial disclosures reveal that he owned some Invesco stock throughout the year in 2017 as he led the imported steel investigation.

Ross claims he "mistakenly" thought all of his shares had been sold when in fact the shares hadn't. Ross said he "promptly sold" the shares once he found he still owned them.

CLC claims it's implausible that Ross wouldn't know if he owned the stock.

Ross's attorney said "Secretary Ross did recuse himself from Invesco matters as required."

"The Secretary's explanations of his reporting mistakes in any case do not alter the fact that he was not required to recuse himself specifically from China trade and steel trade issues," he said.

Invesco is one stock that Ross was holding even after Ross declared he had divested all financial interests in companies that his ethics agreement required. Ross made the declaration on November 1st and then recorded two sales of Invesco stock in December, the financial disclosures show.  A similar pattern emerged with Ross's ownership and disclosure of shares in other companies, the report said.

CLC also spotlights Ross's investment in a shipping company called Navigator, which transports liquefied petroleum gas (LPG) among other gas related products. While holding his Navigator stake, Ross was active in the administration's efforts to promote the export of liquefied natural gas (LNG) in 2017. The policy directly benefited Navigator even though LPG and LNG are separate products, CLC argues, because the two are related and increased LNG exports would, in turn, increase LPG exports.

Ross's attorney said Ross' ethics agreement did not require him to recuse in the same way regarding Navigator.  He said there was not "a direct and predictable effect" on the financial interests of Navigator. "The Secretary was not, for example, negotiating a specific import license for Navigator to carry LPG exports to China. The negotiations concerned broad market access issues for all US exporters," Kassinger said.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 60898

Reported Deaths: 1698
CountyConfirmedDeaths
Hennepin19271835
Ramsey7572265
Dakota4414106
Anoka3683114
Stearns289320
Washington212845
Nobles17646
Olmsted173223
Scott155919
Mower11012
Rice10328
Blue Earth9185
Wright8845
Carver8613
Clay78440
Sherburne7238
Kandiyohi6961
St. Louis55319
Todd4262
Lyon4253
Freeborn3591
Steele3482
Nicollet33713
Benton3203
Watonwan3080
Winona26116
Beltrami2400
Crow Wing23514
Le Sueur2201
Martin2075
Chisago2011
Goodhue1969
Otter Tail1943
McLeod1810
Cottonwood1780
Becker1571
Pipestone1579
Polk1534
Waseca1480
Itasca14712
Douglas1441
Carlton1370
Unassigned13441
Pine1290
Dodge1270
Isanti1250
Murray1221
Chippewa1041
Morrison921
Wabasha920
Brown892
Faribault870
Jackson860
Meeker852
Rock850
Sibley832
Koochiching773
Pennington751
Cass722
Mille Lacs713
Renville645
Fillmore630
Lincoln580
Grant553
Swift531
Roseau520
Yellow Medicine520
Pope480
Houston420
Aitkin401
Norman400
Kanabec361
Redwood360
Wilkin343
Hubbard330
Marshall290
Mahnomen271
Wadena270
Red Lake240
Big Stone220
Lake210
Stevens180
Clearwater140
Traverse110
Lac qui Parle70
Cook50
Kittson30
Lake of the Woods20

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 48781

Reported Deaths: 929
CountyConfirmedDeaths
Polk10309207
Woodbury371952
Black Hawk312766
Linn237588
Johnson209619
Dallas188535
Buena Vista179412
Scott171814
Dubuque167631
Marshall144426
Pottawattamie132526
Story116614
Wapello90033
Muscatine84748
Webster8017
Crawford7283
Sioux6343
Cerro Gordo62517
Warren5641
Tama55129
Jasper47826
Wright4721
Plymouth4629
Clinton3973
Dickinson3814
Louisa37814
Washington29810
Boone2583
Hamilton2461
Franklin24110
Bremer2267
Clarke2013
Carroll1921
Emmet1924
Clay1901
Shelby1841
Hardin1810
Des Moines1792
Marion1730
Poweshiek1598
Benton1561
Jackson1561
Allamakee1554
Floyd1552
Mahaska13917
Cedar1331
Guthrie1325
Jones1302
Buchanan1271
Henry1254
Hancock1222
Butler1212
Madison1212
Pocahontas1152
Lee1143
Lyon1132
Delaware1121
Humboldt1111
Cherokee1081
Harrison1071
Clayton1043
Taylor980
Iowa971
Winneshiek971
Page940
Kossuth910
Monona910
Mills890
Sac850
Jefferson840
Palo Alto840
Winnebago840
Calhoun832
Osceola830
Fayette820
Grundy791
Mitchell780
Union771
Cass741
Monroe737
Lucas684
Worth660
Montgomery594
Davis572
Chickasaw540
Appanoose493
Howard490
Fremont420
Greene410
Van Buren371
Keokuk351
Adair300
Ida290
Audubon281
Decatur230
Ringgold221
Wayne191
Adams160
Unassigned60
Rochester
Scattered Clouds
71° wxIcon
Hi: 75° Lo: 53°
Feels Like: 71°
Mason City
Overcast
71° wxIcon
Hi: 75° Lo: 53°
Feels Like: 71°
Albert Lea
Scattered Clouds
70° wxIcon
Hi: 75° Lo: 53°
Feels Like: 70°
Austin
Broken Clouds
72° wxIcon
Hi: 76° Lo: 52°
Feels Like: 72°
Charles City
Broken Clouds
75° wxIcon
Hi: 77° Lo: 52°
Feels Like: 75°
Storm chances End, Cooler & Less Humid Ahead
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

Preparing for Minnesota's Primary

Image

American Legion starting '100 Miles of Hope' for veterans and children

Image

Diversity Council hosts 'Allies and Advocates'

Image

More construction in downtown Rochester starts

Image

NIACC baseball pushing athletes to the next level

Image

Sunday weather

Image

Weather

Image

Rochester Area Restore celebrates 6 years

Image

Saturday Weather

Image

Grief mask making workshop

Community Events