Yesterday, Citizens for Responsibility and Ethics in Washington (CREW) wrote a letter to the Department of Commerce’s Inspector General, requesting an investigation into Wilbur Ross’s failure to properly report and fully divest from millions of dollars of assets that have created major conflicts of interest for his role as secretary. CREW has previously pointed out that Secretary Ross has been painstakingly slow to sell off the required investments, including problematic holdings in the shipping and natural gas industries, areas where he has taken official actions that could benefit those industries. But as yesterday’s complaint makes clear, Secretary Ross’s shipping and natural gas holdings are not the only cause for concern. Notably, Secretary Ross held a financial interest in the Bank of Cyprus, a controversial financial institution suspected of money-laundering that is also a focus of Special Counsel Robert Mueller’s investigation into Russian efforts to influence the 2016 election.
In response to CREW’s letter, a spokesman for the Department of Commerce said “Secretary Ross has divested his holdings in the funds which own” the Bank of Cyprus and other securities. The spokesman also said that Secretary Ross had submitted reports that explain these divestments and that the OGE will make them public in “due course.” Yet, according to OGE transaction summaries that are publicly available, Ross had not provided documentation of this divestment as of November—nine months into his tenure as Secretary of Commerce.
On the Form 278 financial disclosure he filed last December with the Office of Government Ethics (OGE), Secretary Ross reported owning hundreds of millions of dollars worth of assets, many of which were held in arcane structures, partnerships, and funds. He was supposed to shed his investment in the Bank of Cyprus by May 28, however, he has received multiple extensions to do so. Subsequent disclosures also appear to be incomplete or contradictory, so it is difficult to determine whether Secretary Ross still has a financial interest in the bank.
That Secretary Ross held Bank of Cyprus assets in the first place is concerning. From 2014 until the end of 2016, Ross was the bank’s vice chair. At the time he joined, the U.S. State Department considered Cyprus a “jurisdiction of primary concern” for international money-laundering. While Ross was instrumental in forcing all six Russian members off the bank’s board when he first arrived, he also oversaw a deal that transferred the bank’s Russia operations to Artem Avetisyan, a crony of Russian President Vladimir Putin who had ties to a Russian bank that was under sanctions by the U.S. government.
During Secretary Ross’s confirmation hearings, senators questioned him about his relationship with Viktor Vekselberg, a significant Bank of Cyprus shareholder and Putin associate. Secretary Ross told Sen. Bill Nelson (D-FL) that he met briefly with only one of the bank’s Russian investors in 2014, but provided few other details. Secretary Ross still has not responded to other Senate inquiries about his relationship with Vekselberg, reportedly at the request of the White House.
The Bank of Cyprus is an important point of interest in Special Counsel Mueller’s investigation of Russia’s involvement in the 2016 election. In early November, Bloomberg reported that government officials in Cyprus gave Mueller’s team several banking records relating to accounts held by former Trump campaign chairman Paul Manafort and his business partner Rick Gates who was also involved in the campaign. The documents revealed that Manafort and Gates had at least 15 accounts with the Bank of Cyprus and a subsidiary bank that they used to stash millions of dollars. In October, Mueller charged the two men with money-laundering as well as failing to disclose foreign accounts and lobbying contacts with foreign officials. The indictment of the two men described in detail how money flowed into their Bank of Cyprus accounts, however it did not reveal the source of the funds.
Secretary Ross has voiced his disapproval of Special Counsel Mueller’s ongoing Russia probe. In an appearance on CNBC in May, he called the investigation a “sideshow” and said it is “a distraction from trying to run the country in a proper way.”
Due to the incomplete and confusing nature of Secretary Ross’s disclosures, it is difficult to determine if or when exactly he divested from the Bank of Cyprus, or how much his stake might have been worth. At one time he held an 18% stake in the bank amounting to a total of $424 million dollars. However, he did not specify an exact value for his interest in the bank on the financial disclosures he filed prior to his confirmation. On those disclosures, Secretary Ross reported owning stock in the bank through a parent holding called W.L. Recovery Associates V LLC that he estimated to be worth only between $1 million and $5 million.
On June 2, Secretary Ross filed a compliance form with the OGE, in which he reported divesting some of his Bank of Cyprus shares. However he also appears to have acknowledged an additional group of Bank of Cyprus shares that had not been previously mentioned, suggesting he did not accurately report his interest in the bank on his initial disclosures. Additionally, even though he claimed to have divested his shares, he never filed a transaction report detailing any trades in the Bank of Cyprus or a parent holding company.
On November 1, Secretary Ross filed another OGE compliance form, asserting that he had “completed all of the divestitures indicated in [his] ethics agreement.” However, on the question about whether he had filed periodic transaction reports for his divestitures he filled in “N/A.” This could mean that he does not intend to file a transaction report for his Bank of Cyprus shares and others. It is also possible he gifted the shares to another party or placed them in an irrevocable trust, in which case he would not be required to submit a transaction report. But this seems unlikely and it only raises more questions about his finances.
If Secretary Ross had sold his assets relating to Bank of Cyprus, he would have had to report the transactions to the OGE by December 9th. According to the Commerce Department’s spokesman, records demonstrating that Ross has fully divested will be available soon. If so, that would be a welcome resolution of this issue. Until Secretary Ross cuts his ties to the Bank of Cyprus, he will be another troubling link in the chain between the Trump administration and Russia.