In The World Of Trumpanzee, The Powerful Sit On High Perches And Stand Atop Long Winding Stairs And The Weak Lie In Their Chains Surrounded By Darkness

Back in February, we were already talking about Wilbur Ross' amazingly shady connections with Putin's venal kleptocracy. Before that all anyone knew about Ross was that he was the vulture capitalist and primary villain in the Sago Mining disaster. It should surprise no one that this bag of excrement is on the verge of... well, resignation, but also imprisonment? fleeing to Russia? Read all about the latest freak from the Trump carnival and sideshow, the Secretary of Commerce, a key member of the Trump kakistocracy... in the failing New York Times. Fox may have missed it, but this is huge news all over the world. Short version: Wilbur's a crook... with Putin. What a cabinet-- worse than Dr. Caligari's!

After becoming commerce secretary, Wilbur L. Ross Jr. retained investments in a shipping firm he once controlled that has significant business ties to a Russian oligarch subject to American sanctions and President Vladimir V. Putin’s son-in-law, according to newly disclosed documents.

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.

Partnerships used by Mr. Ross, whose private equity firm has long been the biggest shareholder in Navigator, have a 31 percent stake in the company. Though his personal share of that stake was reduced as he took office in February, he retained an investment in the partnerships valued between $2 million and $10 million, and stood to earn a higher share of profits as a general partner, according to his government ethics disclosure and securities filings.

Mr. Ross’s stake in Navigator has been held by a chain of companies in the Cayman Islands, one of several tax havens where much of his wealth, estimated at more than $2 billion, has been tied to similar investment vehicles. Details of these arrangements surfaced in a cache of leaked files from Appleby, one of the world’s largest offshore law firms, which administered some 50 companies and partnerships in the Caymans and elsewhere connected to Mr. Ross.

The Appleby documents, obtained by the German newspaper Süddeutsche Zeitung, were shared with the International Consortium of Investigative Journalists and other media organizations, including The New York Times. They show how the Bermuda-based Appleby worked to help the wealthy elite, from Russian oligarchs to Middle Eastern princes, as well as multinational corporations like Apple and Nike, avoid billions of dollars in taxes.

In addition to Mr. Ross, the files contain references to other members of the Trump administration, including Gary D. Cohn, the chief economic adviser who was associated with 22 Bermuda entities while an executive at Goldman Sachs, and Secretary of State Rex W. Tillerson, who was a director of a Bermuda-based joint venture with the government of Yemen when he ran Exxon Mobil’s operations there. There is no evidence of illegality in any of their dealings.

Mr. Ross emerges as a particularly valued client for the offshore law firm, whose records provide more insight into his financial holdings beyond the public ethics disclosures he made upon joining the Trump administration. His ethics agreement filed in January listed the partnerships he intended to keep, but not the investments they held. Previously, Navigator had been mentioned in a separate, 57-page description of his holdings for the year that ended in December 2016, but with no hint of its ties to Sibur.

Sibur’s top ownership-- including Gennady Timchenko, who is Mr. Putin’s friend and judo partner and is subject to American sanctions, and Kirill Shamalov, who is married to the Russian president’s youngest daughter — makes it “a company with crony connections” in Moscow, said Daniel Fried, a Russia expert who served in senior State Department posts in Republican and Democratic administrations.

Another of Navigator’s major customers is PDVSA, the Venezuelan state oil company, controlled by the authoritarian regime of Nicolás Maduro. The Trump administration imposed sanctions on PDVSA this summer.

In a written response to questions by the Times, James Rockas, a spokesman for Mr. Ross, said that Navigator’s relationship with Sibur began before Mr. Ross joined the board in March 2012, and that he had never met the Russian oligarchs who are Sibur’s major shareholders. Public records show that Mr. Ross’s firm became a major investor in Navigator in November 2011, three months before the company chartered its first ships to Sibur.



...It is perhaps unsurprising that Navigator would have a relationship with a major Russian company during Mr. Ross’s tenure. Much like President Trump, whose company sought approval for a hotel project in Moscow as recently as last year, Mr. Ross has long shown an appreciation for the untapped potential of Russian markets when seeking investment opportunities. His involvement there dates at least to the 1990s, when he was appointed by President Bill Clinton to the board of the U.S. Russia Investment Fund, established to promote American business interests in Russia.

In addition to Navigator, his firm also acquired a German rail car company, VTG, which pursued an expansion strategy in Russia before Mr. Ross sold his stake in 2016. And Mr. Ross led a private bailout of the Bank of Cyprus, long regarded as a favorite financial haven of wealthy Russians, after the worldwide economic crisis crippled the Cypriot banking system.

In the wake of reports of Russian interference in the United States presidential election, multiple investigations have explored potential business ties between Russia and members of the Trump administration. While several Trump campaign and business associates have come under scrutiny, until now no business connections have been reported between senior administration officials and members of Mr. Putin’s family or inner circle.

During Mr. Ross’s confirmation process, he was asked repeatedly about his business ties to Russia, mostly related to his former role as vice chairman of the Bank of Cyprus, where he dealt with Russian investors but also forced some of them out of the bank. He was also asked about his investment in another shipping company, Diamond S, and whether its dealings with China could pose a conflict with his government duties. But he faced no questions about Navigator and its significant financial relationship with Sibur.

...Ross’s business practices have occasionally drawn criticism for moving American jobs overseas in an effort to improve profits. A Reuters analysis of Labor Department statistics found that his takeovers shifted 2,700 jobs in automotive, textiles and mortgage finance to, among other places, China, India, Mexico and Nicaragua.

...As one of the largest gas companies in Russia, Sibur is not just any private business.

It was created by the Russian government and maintains a close dependency on Moscow, even after its sale in 2010 to Mr. Timchenko and Leonid Mikhelson. The two men are typical of Russian moguls who have benefited from state-owned assets and are expected to remain loyal to the Putin government, said Amos J. Hochstein, a top energy diplomat under the Obama administration.

“When you start doing business with Russian energy companies like Gazprom and Sibur, you’re not just getting into bed with the company,” Mr. Hochstein said. “You’re getting into bed with the Russian state.”

The ties to the Russian president, however, proved to be a double-edged sword for Sibur’s owners. In 2014, after Russia seized Crimea from Ukraine, American and Western allies imposed economic sanctions on key Putin associates, including Mr. Timchenko. A few months later, the United States barred banks from providing new financing to another gas company, Novatek, belonging to Mr. Mikhelson.

Sibur itself was not targeted. But financial institutions, including Bank of America and the Royal Bank of Scotland, backed away from loans to the company, according to news reports at the time. Moscow stepped in to help in May 2014, when a government-backed financial consortium bought a shipping terminal from Sibur and pledged to expand export capacity, while allowing Sibur to remain the terminal’s sole exporter of gas.

Then, in September 2014, as sanctions pressure was growing, Mr. Timchenko reduced his holdings in Sibur by selling a 17 percent stake to a junior shareholder, Mr. Shamalov. A year earlier, Mr. Shamalov, whose father is a friend and former business partner of Mr. Putin’s, had married the Russian president’s daughter Katerina. His Sibur purchase, which pushed the 32-year-old Mr. Shamalov’s investment to more than 20 percent of the company, was financed by a $1.3 billion loan from the state-backed Gazprombank. Mr. Shamalov sold part of his stake in April, reducing it to 3.9 percent.

Most of these financial machinations were carried out through offshore companies on Cyprus, where Mr. Mikhelson and Mr. Timchenko held their investments in Sibur and did business with several Cypriot banks. During the summer of 2014, Mr. Ross had become the Bank of Cyprus’s vice chairman, though there is no indication that he crossed paths with the two oligarchs during his tenure there.

His position at the bank required him to step down from the board of Navigator, however, even as he retained his investment in the company. His close associate at WL Ross & Co., Wendy L. Teramoto, took his place at Navigator and, later, left to join Mr. Ross as chief of staff at the Commerce Department.

Despite the reticence of Western financial institutions to do business with Sibur and its owners, Navigator’s relationship with Sibur continued to grow.

From 2014 to 2015, the portion of Navigator’s total revenue that came from Sibur jumped to 9.1 percent from 5.3 percent, making the company one of its top five clients, according to securities filings, before dipping to 7.9 percent last year.

As WL Ross & Co. expanded over the years, it used Appleby, the offshore specialist, to set up an increasing number of entities in tax havens, many in the Cayman Islands. This British territory in the Caribbean levies no corporate or personal income tax on money earned outside its jurisdiction, and requires little disclosure of corporate ownership. By 2014, Mr. Ross and his investment company were among Appleby’s top 20 clients.

After he was nominated as commerce secretary, Mr. Ross filed an agreement with the federal Office of Government Ethics saying he would resign from WL Ross & Co. and divest from 80 companies and partnerships, but would keep a stake in nine others that held assets in “real estate financing and mortgage lending” and “transoceanic shipping.” The underlying assets were not specified.

His financial disclosure form offered more detail, including a list of assets that had been held by each of the partnerships that he retained. Navigator Holdings appeared in connection with four Appleby-managed Cayman partnerships. Mr. Ross’s ethics filing valued his stake in those partnerships at between $2.05 million and $10.1 million, a fraction of the partnerships’ combined 31.5 percent stake in Navigator, which, based on the firm’s recent stock price, was worth roughly $179 million. In all, WL Ross & Co. remains Navigator’s largest shareholder, according to the shipping company’s most recent annual report.

Federal ethics law requires officials to recuse themselves from matters that would have “a direct and predictable” effect on their financial interests or cause a reasonable doubt about their impartiality. During his confirmation hearings, Mr. Ross sought to reassure senators that he would avoid any conflicts of interest between his continued business holdings and his cabinet post.

“I intend to be quite scrupulous about recusal and any topic where there is the slightest scintilla of doubt,” he said.

Not even a scintilla of doubt-- not when it comes to scrupulousness inside the Trumpanzee Crime Family! Mark Hays, Anti Money Laundering Campaign Leader at Global Witness: "This is yet another instance of conflicts of interest within the Trump administration. Wilbur Ross influences US trade and sanctions, yet he is still making millions from a Russian company that could be targeted by these decisions. This is highly problematic for an administration at the center of investigations into collusion with the Russian state." You want these people making tax policies for our country? For your family? Paul Ryan, John Kelly and Mitch McConnell will make sure nothing untoward happens? Good luck to you, matey.

Frank Clemente, executive director, Americans for Tax Fairness: "The Paradise Papers are a window into the financial secrets of the world's biggest corporations and wealthiest individuals, including over a dozen members of Donald Trump's inner circle who have already been named in documents. While journalists and investigators are digging through over 13 million pages, one thing is clear: there's one set of rules for the rich and powerful and another set for everybody else. The tax code is laden with special loopholes that benefit billionaires and big corporations at the expense of everyone else. The Paradise Papers require Congress to first investigate, then legislate. Instead of passing a huge tax giveaway for yacht-owning island-hoppers, Congress should launch a major investigation into how corporations and the wealthy use offshore loopholes to dodge taxes. We must not give one penny in tax cuts to millionaires and corporations. We call for an immediate halt to consideration of the current GOP tax bill, which rewards tax dodging and encourages companies to send more of their operations offshore."

By this morning, in light of the Paradise Papers, the Washington Post was offering its readers a primary on who Wilbur Ross is. Connecticut Senator Richard Blumenthal is quoted saying that he's "astonished and appalled because I feel misled... Our committee was misled, the American people were misled by the concealment of those companies." And they illustrated it with a twitter storm:

Bernie was less gentle, warning of an international olograchy, controlled by a tiny number of billionaires. His statement to The Guardian: "The major issue of our time is the rapid movement toward international oligarchy in which a handful of billionaires own and control a significant part of the global economy. The Paradise Papers shows how these billionaires and multinational corporations get richer by hiding their wealth and profits and avoid paying their fair share of taxes."

The same tax breaks, he said, were being seized upon by super-wealthy members of Trump’s cabinet “who avoid billions in US taxes by shifting American jobs and profits to offshore tax havens. We need to close these loopholes and demand a fair and progressive tax system.”

...Further responses to the Paradise Papers came from the Democratic leader in the US Senate Chuck Schumer, and the ranking Democratic member of the Senate finance committee, Ron Wyden. In a joint statement they accused Republicans in Congress leading the push towards a reform of the tax code of failing to close egregious loopholes revealed by the leaks.

As a result Republicans were rewarding, the duo said, “wealthy billionaires like secretary Wilbur Ross for dodging taxes, while punishing many in the middle class with new tax hikes. If you deduct medical expenses or student loan interest from your taxable income, the Republican plan comes after your wallet. But if you stash your billions in secret bank accounts overseas, their plan gives you the green light to keep doing what you’ve been doing.”

They added that the Paradise Papers were “proof positive that the Republican tax plan favours the wealthy and betrays the middle class in this country, who are the ones left carrying the financial burden of massive corporate tax avoidance.”