Commerce secretary scrutinized for investments, ‘failure to divest’
WASHINGTON — As commerce secretary, Wilbur Ross has met with auto executives who are customers of the company he founded and still had a financial interest in.
He has met with the chief executive of a rail car manufacturer whose board he once sat on and whose shares he still owned.
And according to a Forbes magazine article, even though he owned a $10 million to $50 million stake in the financial firm Invesco, where he had worked, he met with a board member of the Qatar Investment Authority, a sovereign wealth fund that had given Ross’s former firm money to manage.
The meetings — first reported by Forbes and confirmed via regulatory disclosures, Commerce Department officials and one of the firms involved — and financial holdings have put Ross under increasing scrutiny from government ethics watchdogs and lawmakers. Ross has denied any wrongdoing — saying he only made “inadvertent errors” — and his lawyer says a commerce secretary must be able to meet with industry officials to do his job.
But last month, the Office of Government Ethics (OGE), an independent agency created 40 years ago to ensure ethical behavior in the executive branch, scolded Ross for how he has managed his investments after coming into office. The OGE rebuked him for failing to sell certain holdings — including the Invesco stock — in the timely manner described in the agreement he forged with OGE upon taking office.
Such failures “can undermine public trust in you and the overall ethics program.” Although it did not recommend any punishment, the ethics office’s acting director wrote: “Your failure to divest created the potential for a serious criminal violation on your part and undermined public confidence.”
Lawmakers, meanwhile, are asking whether the late sales turned ordinary meetings into occasions for conflicts — or at least the appearance of conflicts — of interest.
Senate Commerce Committee Chairman John Thune, R-S.D., asked the Commerce Department’s inspector general on July 15 to review whether “errors” Ross made resulted “in a violation of conflict of interest law.” Sen. Ron Wyden, Ore., the ranking Democrat on the Senate Finance Committee, asked Attorney General Jeff Sessions to review Ross’s disclosures for “potential criminal violations.”
Outside groups also have raised concerns. On Aug. 10, the nonprofit group Democracy 21 filed a complaint with the Justice Department’s Public Integrity Section asking it to investigate Ross. And on Aug. 13, the Campaign Legal Center, another watchdog group, filed a complaint with the Commerce Department’s inspector general asking for an inquiry.
The commerce inspector general is reviewing the allegations, but would not comment further, said Clark Reid, legislative and external affairs officer.
“The best thing you can say about his tenure from an ethics standpoint is it’s completely tone deaf,” said Don Fox, former acting director and general counsel at the OGE. “And the worst we won’t know until the inspector general finishes its work.”
Ross, who has estimated his worth to be $800 million, has said that he has done nothing to directly affect his own interests. His ethics agreement with OGE permitted him to keep some private equity stakes that were difficult to liquidate and that posed only a “remote” chance of a conflict.
Theodore W. Kassinger, a partner at O’Melveny & Myers who was general counsel of commerce under President George W. Bush and who is representing Ross, said the meetings did not pose any conflicts of interest.
“Secretary Ross has not violated any conflict of interest law or regulation,” Kassinger said. “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.”
Kassinger added, “He continues to follow the guidance of Commerce Department ethics officials regarding the matters in which he is personally involved. He has divested a very substantial part of the investments he held when he assumed the office of secretary, and he has pledged to divest other remaining holdings even though he is not obligated to do so.”
The companies appear to have little to show for their relationships with Ross. Steel and aluminum tariffs, as well as the threat of gutting the North American Free Trade Agreement, fly in the face of the interests of most of those companies.