U.S. Commerce Secretary Wilbur Ross on Monday defended his sizable business links to Russian President Vladimir Putin's inner circle, saying "there is no impropriety."
Ross, a 79-year-old billionaire industrialist, has a 31 percent stake worth $2 million to $10 million in a shipping venture, Navigator Holdings, with connections to Putin's son-in-law and an oligarch who is subject to U.S. sanctions and is Putin's judo partner, according to newly leaked documents.
But Ross, a member of President Donald Trump's Cabinet, said on the sidelines of a business conference in London, "I think the media has made a lot more out of it than it deserves."
Navigator earns millions of dollars a year shipping natural gas for Russian energy giant Sibur, which is partly owned by Kirill Shamalov, the husband of Putin's daughter, Katerina Tikhonova, and Gennady Timchenko, the oligarch who is Putin's judo partner, according to the documents. Timchenko is subject to the U.S. sanctions because of Russia's 2014 annexation of Ukraine's Crimean Peninsula and its subsequent support for pro-Russian separatists fighting the Kyiv government's forces in eastern Ukraine.
‘Nothing whatsoever improper’
But in a pair of interviews with the BBC and Bloomberg TV, Ross dismissed concern about his involvement in the operation. He said the Sibur deal was arranged before he joined Navigator's board.
"There's no interlocking of board, there's no interlocking of shareholders, I had nothing to do with the negotiation of the deal," he said. "But most importantly the company that is our client itself, Sibur, was not then sanctioned, is not now sanctioned, and never was sanctioned in between. There's nothing whatsoever improper."
Ross told Bloomberg, "We have no business ties to those Russian individuals who are under sanction." Ross said he has been selling his stake in Navigator, "but that isn't because of this."
Ross sold off numerous holdings when he joined Trump's Cabinet earlier this year to avoid conflicts of interest while he promotes U.S. commerce throughout the world. But he kept his Navigator stake, which has been held in a chain of partnerships in the Cayman Islands, an offshore tax haven where Ross has placed much of his estimated $2 billion in wealth.
‘Paradise papers’
Ross did not disclose the Russian business link when he was confirmed by the U.S. Senate as commerce secretary, but it surfaced in a trove of more than 13 million documents leaked from Appleby, a Bermuda-based offshore law firm that advises the wealthy elite on global financial transactions as they look to avoid billions of dollars in taxes. Appleby says it has investigated all the allegations and found “there is no evidence of any wrongdoing, either on the part of ourselves or our clients.”
The cache of documents, called the Paradise Papers, was first leaked to a German newspaper, Sueddeutsche Zeitung, and then shared with the International Consortium of Investigative Journalists and dozens of other media outlets around the world, including The Guardian in Britain, The New York Times and NBC News in the U.S., all of which reported on the Ross investment on Sunday.
The disclosure of Ross' financial interests in Russia comes as a special prosecutor, Robert Mueller, and three congressional panels are investigating Russian interference in the 2016 U.S. presidential election, an effort the U.S. intelligence community has concluded was led by Putin in an effort to undermine U.S. democracy and help Trump win the White House.
Several Trump campaign associates have come under scrutiny, but until the disclosures about Ross' holdings, there have been no reports of business links between top Trump officials and any member of Putin's family and his inner circle.
The disclosures could put pressure on world leaders, including Trump and British Prime Minister, Theresa May, who have both pledged to curb aggressive tax avoidance schemes.
“Congress has the power to crack down on offshore tax avoidance," said Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy. "There are copious loopholes in our federal tax code that essentially incentivize companies to cook the books and make U.S. profits appear to be earned offshore. The House tax bill introduced late last week does nothing to close these loopholes."
