November 2017 Suddeutsche Zeitung By Frederik Obermaier and Nicolas Richter The Secretary's Ties to Russia Even as a member of U.S. President Donald Trump's cabinet, billionaire Wilbur Ross continues to profit from business dealings with Moscow Wilbur Ross celebrated his greatest professional achievement on Nov. 30, 2016, surrounded by other executives in a noble New York restaurant between Broadway and Park Avenue. The shipping company Navigator Holdings had invited him to the timbered rooms of the Gramercy Tavern, where a private dining chamber awaited him. At 79, there is little Ross hasn’t achieved as a businessman. He’s a multibillionaire who made his fortune restructuring and reselling ailing companies. He’s a member of New York’s most elite and affluent circles. And on that late November evening in 2016, he would also chalk up his next success. Then president-elect Donald Trump had tapped his old acquaintance to be the next United States secretary of commerce. Ross’ nomination immediately caused a stir in Washington. People wondered how a businessman with control of so many companies was supposed to transform himself, practically overnight, into an impartial cabinet member serving the public good. Trump, on the other hand, would tout Ross’ qualifications just a short time later with familiar bravado: “This guy knows how to make money, folks.” Ross received a hero’s welcome at Gramercy Tavern, one worthy of a successful businessman who had earned himself a seat at the cabinet table. As a reporter for Bloomberg Businessweek Read the feature "Wilbur Ross and the Era of Billionaire Rule" in Businessweeknoted, the host of the dinner, David Butters, Navigator’s CEO, was especially excited about Ross’ new post. His company specialized in shipping liquefied gas around the world, including supplies extracted in Russia, and he recalled Ross telling him, “Your interest is aligned to mine,” adding: “The U.S. economy will grow, and Navigator will be a beneficiary.” Those assurances about mutual interests have now taken on an entirely different meaning. The Paradise Papers and filings with the U.S. Securities and Exchange Commission (SEC) reveal Secretary Ross holds shares in Navigator through a series of offshore companies in the Cayman Islands. These companies have cryptic names like WLR Recovery Associates IV DSS AIV GP, WLR Recovery Associates IV DSS AIV LP and WLR Recovery Fund IV DSS AIV LP. The SEC filings show that roughly a third of Navigator’s shares are held by diverse funds used by Ross. It is unclear how big a personal stake Ross himself has in these funds, as he is not the sole investor, though it is likely a multimillion-dollar sum, as his own disclosures about holdings in the various WLR company structures suggest. Since 2014, Navigator has earned more than $68 million from deals with the Russian energy company Sibur, which is in the hands of confidants of Russian President Vladimir Putin. One of the company’s largest shareholders is Leonid Mikhelson, who also controls another energy firm against which the U.S. Treasury Department imposed sanctions due to Mikhelson’s proximity to Putin. Two other people with stakes in Sibur are Gennady Timchenko, who was also sanctioned due to his relationship with Putin, and Kirill Shamalov, who is married to Putin’s youngest daughter. Sibur emerged from a state-owned energy company in the 1990s and was ultimately privatized. Today, the firm employs around 30,000 people and sells Russia’s most valuable export, natural gas, around the world. Much of it is shipped to customers in the form of liquefied gas, which requires special types of freighters. Sibur’s need is so great that it had Navigator custom build several ships that could operate in the harsh Baltic Sea climate. Navigator’s website even lists the vessels’ names: Leo, Libra, Luga and Yauza. Politically, this is significant for several reasons. First, Ross is involved in deals concerning maritime freight, an industry – at least insofar as the U.S. is concerned – he is responsible for regulating as commerce secretary. Second, he is tasked with administering the “America First” trade policies Trump promised to his voters – yet at the same time, he profits from Russian competition on the energy market. And third, Navigator’s business partner Sibur is controlled by multiple oligarchs close to Putin who have Western sanctions in place against themselves or their companies. The connection is also problematic considering that hardly any other issue has dogged Trump’s presidency as much as his alleged contacts to the Russian government, particularly in the run-up to the election. A special counsel is currently investigating whether Moscow illegally supported Trump during his campaign. The first charges have already been filed and the first arrests made, including that of Trump’s former campaign manager, Paul Manafort. They called him King of Bankruptcy With such a large number of potential conflicts of interest, the U.S. Congress and the American public might have appreciated being informed that the designated commerce secretary played a role in the Russian gas business. No one seemed to have been aware of this fact when, in early 2017, Ross sailed through his Senate confirmation hearings. Informed by journalists about the revelations, Democratic Sen. Richard Blumenthal called for an investigation after saying Ross had misled Congress. When contacted for a response last week, a Commerce Department spokesman did not dispute that Ross draws earnings from the Russian gas business, but he ruled out the possibility that this investment could have any influence on the commerce secretary’s mandate. He also confirmed that Ross served on Navigator’s board from 2012 to 2014. He said the decision to lease several ships to Sibur happened before that time and noted Sibur was not under sanctions when the contract was signed and that it is still not under sanctions today. The spokesman said Ross had never met the oligarchs Mikhelson, Timchenko or Shamalov. To say Ross is a savvy businessman would be a gross understatement. The son of a lawyer and a teacher from New Jersey, Ross initially aspired to be a writer but discovered a passion for making money during an internship on Wall Street. For two decades, he managed Rothschild Inc.’s bankruptcy advisory business before striking out on his own. He bought up foundering companies, many in the steel and coal sectors, which he then restructured and sold. His skills earned him the moniker, the “King of Bankruptcy.”