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Wilbur Ross’s Winter of Discontent
It has been a bad month, if not a bad entire year for Wilbur Ross, who was named Commerce Secretary by President-elect Donald Trump last Nov. 30 and confirmed by the Senate on Feb. 28. Ross has to be wishing he had never agreed to take the job.
Ross, who turns 80 this month, has been entangled in a long list of calamities including a Forbes Magazine report downgrading his fortune by US$2 billion to a mere US$700 million or so, a bitter blow to a New York socialite who by all accounts treasures his rank among billionaires and whose third wife Hilary Geary is of a class of women immortalized by the writer Tom Wolfe in his novel Bonfire of the Vanities as a Lemon Tart – blonde, thin and much younger than her tycoon husband.
Ross gained fame as the "King of Bankruptcy"—a vulture capitalist buying bankrupt companies, mostly in manufacturing and steel, then selling them off at a profit after restructuring them. He is known as someone who cherishes his position in some of the US’s snootiest clubs. He is a member of 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, and which may look with disdain on the sudden allegations of diminution by Forbes of two thirds of his fortune as well as his other political and financial problems.

That’s Wilbur in the front row with the (L) red socks.
But his reputation is well on its way towards trouble. Among a wide range of other misfortunes, as Asia Sentinel reported on Nov. 16, 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. He 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 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.
WL Ross & Co LLC is joint manager with Taiyo Pacific Partners LP of a variety of Tokyo Stock Exchange-listed companies including J Trust, which most recently has been entangled with a Bangkok-based hire purchase company known as Group Lease that has been charged with fraud in its financial dealings and has fired its managing director and CEO Mitsuji Konoshita, who may have fled the country.
J Trust’s own CEO, Nobuyoshi Fujisawa, was president of several units of Livedoor, a Japanese internet service provider that went belly-up in a 2006 Ponzi scheme amid similar charges of market manipulation and securities fraud. J Trust is also connected closely to Takefuji Co. Ltd., another notorious Japanese US$5.2 billion pyramid scheme fraud and bankruptcy that ended in its demise in 2010.
According to disgruntled investors, Fujisawa is said to have a track record of managing publicly listed companies that specialize in pyramid schemes and money-laundering. Recent money-laundering charges seem to indicate he may have expanded his areas of expertise.
J Trust is now affiliated with and announced it intends to take over Group Lease PLC, a Bangkok-based hire purchase lender whose share price has collapsed and whose shares were recently suspended from trading by the Thailand Securities and Exchange Commission and the Stock Exchange of Thailand (SET) because of fraud, corruption and money laundering charges.
Trouble of a different sort appeared at almost the same time, on Nov. 15, when 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 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.
That behavior is said to have continued to as late as this autumn, months 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 es 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 is seeking 100,000 signatures – and so far has collected more than 85,000 demanding that Ross be removed as Commerce Secretary by President Trump.
“This is another textbook case of the Trump administration’s phony populism serving as cover for the wealthiest few to enrich themselves at public expense,” Credo Action said. “We need a concerted public push to expose Ross and make it clear that recusals cannot erase this conflict of interest and seeming corruption. Wilbur Ross has to go.”
Earlier this month, the International Consortium of Investigative Journalists released thousands of documents, known as the Paradise Papers, that were liberated from the international law firm Appleby, which among other things included a database showing Ross had retained investments in Navigator Holdings, an LNG shipper that transports petrochemicals for the Russian gas and petrochemicals venture Sibur. Russian oligarchs Leonid Mikhelson and Gennady Timchenko, both of whom are on the US Sanctions List as close friends of Russian President Vladimir Putin and his son in law, Kirill Shamalov. All are involved with Sirov.
Ross failed to disclose the ties during his confirmation hearings. Sen. Richard Blumenthal, a Connecticut Democrat, said Ross had misled the Senate Committee on Commerce by not disclosing he had divested from Navigator and by not disclosing Navigator’s ties to the Kremlin. Since the release of the Paradise Papers, Ross has indicated an intent to divest of the original 31.5 percent of Caymans Islands partnership holdings of Navigator.
However, Credo Action has charged, “Not only does Ross have secret financial ties to Russian oligarchs with family ties to Vladimir Putin, the papers show that Ross was negotiating natural gas export deals while he held huge investments in the world’s largest fleet of liquefied natural gas (LNG) carriers.”