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It Has Not Been a Great Week for Wilbur Ross

By NexChange
Capital Markets

On Sunday, the so-called “Paradise Papers” leaked, revealing how celebrities, royals, ultra-wealthy people and corporations have have used offshore bank accounts to hide their money and avoid paying taxes.

Within these documents, released by the International Consortium of Investigative Journalists,  were details on how U.S. Commerce Secretary Wilbur Ross retained investments in the shipping firm Navigator Holdings, worth between $2 million and $10 million. Navigator Holdings “has significant business ties to a Russian oligarch subject to American sanctions and President Vladimir V. Putin’s son-in-law,” as the New York Times reported.

The shipper, Navigator Holdings, earns millions of dollars a year transporting gas for one of its top clients, a giant Russian energy company called Sibur, whose owners include the oligarch and Mr. Putin’s family member. Despite selling off numerous other holdings to join the Trump administration and spearhead its “America first” trade policy, Mr. Ross kept an investment in Navigator, which increased its business dealings with Sibur even as the West sought to punish Russia’s energy sector over Mr. Putin’s incursions into Ukraine.

WL Ross & Co., the commerce secretary’s private equity firm, “has long been the biggest shareholder in Navigator” with a 31 percent stake in the company, according to the Times. As a general partner, Ross stands to earn an even higher share than the $2 million to $10 million he currently controls.

So all of this looks bad for Ross and looks terrible for President Trump, who promised to “drain the swamp” and “make America great again.” But now comes another embarrassing revelation for Ross: It turns out he probably lied about being a billionaire, according to a new report from Forbes.

The most amusing part of this story is that when the magazine placed his net-worth at $2.9 billion on The Forbes 400 list earlier this year, Ross called Forbes to complain that his net-worth was actually closer to $3.7 billion.

“Now, after examining the financial-disclosure forms he filed after his nomination to President Donald Trump’s Cabinet, which showed less than $700 million in assets, Forbes was intent on removing him entirely,” reporter Dan Alexander wrote.

Doh!

Ross protested Forbes‘ findings and insisted that he had money locked up in family trusts that were exempt from federal filing requirements. However, after Alexander began investigating Ross’ claims further, he came to this damning conclusion:

So began the mystery of Wilbur Ross’ missing $2 billion. And after one month of digging, Forbes is confident it has found the answer: That money never existed. It seems clear that Ross lied to us, the latest in an apparent sequence of fibs, exaggerations, omissions, fabrications and whoppers that have been going on with Forbes since 2004. In addition to just padding his ego, Ross’ machinations helped bolster his standing in a way that translated into business opportunities. And based on our interviews with ten former employees at Ross’ private equity firm, WL Ross & Co., who all confirmed parts of the same story line, his penchant for misleading extended to colleagues and investors, resulting in millions of dollars in fines, tens of millions refunded to backers and numerous lawsuits.

In fact, Alexander spoke to some of Ross’ former colleagues who allege that Ross has long been known to bend the truth. Or, as one source told Alexander:  “He’s lied to a lot of people.”

The whole story is worth reading here.

Photo: Public Domain

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