US Commerce Secretary Ross Changes Story on Net Worth

Wilbur Ross, the beleaguered United States Commerce Secretary, has quietly confessed to the US Office of Government Ethics that he publicly overstated his assets by US$2 billion, blaming it on a conversation he had with a journalist although for 13 years he has been telling Forbes Magazine he was worth more than US$3 billion.

The letter was sent to David J. Apol, the ethics office’s general counsel, on Nov. 16. It was forwarded to Asia Sentinel by a New York source. Ross was first outed by Forbes, which downgraded his fortune last month to a mere US$700 million. Ross initially denied the Forbes report, saying the magazine had not included all of his assets including a trust for his children.

However, in the letter to the ethics office, Ross said “Let me use this occasion to clarify some matters. The estimate of my wealth as reported in the press is not accurate; the accurate information is provided in my nominee public financial disclosure report.

“With regard to the creation of trusts, there was no trust created by either myself or my spouse during the period between the election and my appointment as secretary,” he said, according to the letter. “Any statement I made to the press was a result of a mistake or a misunderstanding. At the time of my conversation with the reporter I was in the process of creating a trust as a mechanism to divest my assets in order to comply with my ethics agreement.”

The letter doesn’t state the actual value of Ross’s assets. His OGE Form 278, on file with the ethics office, lists 82 entities including WLR China Energy Associates, Huaneng Invesco, Sun National Bank, Bank of Cyprus, Bank of Ireland, International Automotive Group Japan, and India Asset Recovery Fund Limited, with many of his corporations headquartered in Delaware and the Cayman Islands, a well-known tax haven. His employment assets, income and retirement accounts list 370 entities.

Ross is a New York socialite who by all accounts treasures his now-endangered rank among the super-rich. He is a member of some of the country’s most exclusive clubs including the Florida-based Coconuts, perhaps the country’s most exclusive such institution, as well as the famed Southampton (NY) Bath & Tennis Club and the Everglades Club in Palm Beach, all private clubs that have impossibly high bars to join. He is said to have known President Trump for more than a quarter of a century and, according to a BBC story on Nov. 5, “played a key part in a prepackaged bankruptcy deal – a deal agreed between a company and its creditors – for Mr Trump's Atlantic City casino, the Taj Mahal, in the 1990s.”

As Asia Sentinel reported on Nov. 22, Ross, who turns 80 on Nov. 29, has been entangled in a long list of calamities in addition to the Forbes report. Among a wide range of other misfortunes, WL Ross & Co. LLC is a major investor through a subsidiary vehicle known as Taiyo Pacific Funds LP in a troubled Japanese financial concern called J Trust Co. Ltd. Ross was formerly chief investment officer. As the administrator of the Ross & Associates global private equity fund, he has owned as much as 25 percent of J Trust in a partnership with CalPERS.

J Trust Asia was named one of 21 defendants in a Mauritius-based lawsuit by Weston International Capital that was filed on Sept. 29, demanding US$410 million in payments and damages and charging that J Trust Asia and others laundered billions of dollars out of Indonesia and into banks in Cyprus, Singapore, Lebanon, Russia, the UK and Bermuda.

The Paradise Papers, a huge trove of documents stolen by a whistle-blower from the international law firm Appleby, revealed that Ross has an interest in Navigator Holdings, a fleet of LNG tankers that transport millions of dollars a year worth of gas for the Russian energy firm Sibur, two of whose shareholders, Gennady Timchenko and Leonid Mikhelson, are under US sanctions. Another shareholder is Kiril Shamalov, President Vladimir Putin’s son-in-law.

On Nov. 15, three limited partners of WL Ross & Associates, an entity now controlled by Invesco Private Capital –David H. Storper, David Wax, and Pamela K. Wilson – sued Ross and his companies in a New York court on behalf of the shareholders, charging that Ross had bilked them out of millions of dollars in limited partner entities or GPs created by Ross, only to have Ross and his companies charge tens of millions in hidden fees and concealing their conduct.

The suit charges that Ross’s deception continued after he had become commerce secretary, wrongfully charging “millions of dollars of management fees to the general partner entities it created to manage its flagship private equity funds. In all, plaintiffs found that at least US$48 million in management fees had been improperly charged to three "general partner entities” despite the fact that the fees had been barred by partnership agreements governing the funds.

When the three demanded an explanation in the summer of 2016, the suit charges, they received “incoherent and incomplete answers” from Ross. They are demanding that Ross “provide a full accounting of the affairs of the general partner entity and to pay restitution and disgorge any improper payments it received or caused the entities to pay.”

Adding to Ross’s troubles, a watchdog organization called Credo Action has collected more than 90,000 signature demanding that Ross be removed as Commerce Secretary. Originally Credo Action sought 100,000 signatures but has since raised that to 150,000.