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Sen. Wyden blasts Commerce boss Wilbur Ross over short sale of Russian-linked firm, conflicts of interest

Key Points
  • Commerce Secretary Wilbur Ross was blasted by Sen. Ron Wyden, D-Ore., for what Wyden said were multiple conflicts of interest.
  • Forbes.com reported this week that Ross and then his family last year held shares in companies linked to China, Russia and other countries that stood to be affected by trade decisions in which Ross is involved.
  • Ross has defended his financial holdings, which he has since divested, as proper and approved by federal watchdogs.
Commerce Secretary Wilbur Ross takes his seat to testify before a Senate Finance hearing on "Current and Proposed Tariff Actions Administered by the Department of Commerce" on Capitol Hill in Washington, U.S., June 20, 2018.
Kevin Lamarque | Reuters

Commerce Secretary Wilbur Ross was blasted by Sen. Ron Wyden on Wednesday over Ross' oddly timed short sale of a Russian-tied shipping company he was invested in last year, as well as what Wyden said were clear conflicts of interests in other financial holdings.

Wyden said Ross' conduct — which Ross this week said was approved by federal oversight officials — could weaken much-needed efforts to improve America's trade position.

"One doesn't need a thick government rules book to recognized flagrant conflicts of interest when they come into public view," the Oregon Democrat told Ross before the Commerce boss began testimony before the Senate Finance Committee.

"When it comes to trade, Americans have a right to know it's their best interest Trump administration officials are looking for at the negotiating table," Wyden said. "The stories that we've seen in the last few days call that into question."

Ross, who did not address Wyden's broadside, was testifying two days after Forbes.com published a story detailing the fact that Ross while Commerce secretary, and then his family members, held financial positions in companies that could be affected by U.S. trade decisions in which he is involved.

"In the last few days, news reports about Secretary Ross uncovered a short sale of a Kremlin-linked shipping firm," Wyden said. "New developments show that when Secretary Ross was negotiating with trade on China, he may have maintained financial ties with firms connected with the Chinese government."

"A firm controlled by the Ross family reportedly owns a major international auto parts manufacturer," Wyden added after noting that Ross had been tasked by President Donald Trump with investigating the importation of auto parts.

"This is unfortunately not a one-off story," the senator said. "Virtually every day in the news you get whacked over the head with another report about Trump officials violating ethics rules or coming into questionable windfalls."

Wyden said the issue of Ross' alleged conflicts is important because "I'm on board with several of the Trump administration's trade priorities."

Those include, he said, "tough enforcement of our trade laws," "cracking down on China "ripping off American technology and jobs" and updating the North American Free Trade Act.

"Those are changes that demand action, but taking action gets harder when you're surrounded by the specter of conflicts of interest," Wyden said.

Forbes revealed that last October, Ross had executed a short sale of shares of Navigator Holdings, days after he was contacted by reporters asking him about documents that showed he held a larger share of that company.

One of Navigator's most important business relationships is with a Russian energy firm whose backers have close ties with Russian President Vladimir Putin.

The Commerce Department has said that Ross' holdings while serving as head of the department were declared proper by federal oversight officials.

But Ross said this week that he began divesting his financial stakes last year, after he was confirmed as secretary, to remove any appearance of a conflict of interest.

Ross said that he had sold off what he believed to be all of his large stake in Navigator last year. However, in late October, he said, he became aware of the fact that he owned additional shares in the company.

"In keeping with my earlier decision to divest Navigator stock to remove any appearance of a conflict of interest, I immediately sold the shares I had just learned of," Ross said in a statement Tuesday.

"Here is where the transaction listed as a short sale comes in. The New York Stock Exchange (NYSE) requires that a transfer of shares occur within two days of a sale," Ross said Tuesday. "As a result, to complete the divestiture as quickly as possible, I had to borrow shares in Navigator equal to the number of shares I sold to complete the transaction under the NYSE rules since the trust agent had not yet transferred the shares I owned to my brokerage account. I then replaced the borrowed shares with the shares held in my name when I received them a few weeks later."

The short sale that Ross executed in October was valued at between $100,000 and $250,000 on a financial disclosure form. That amount represents a small fraction of what had been his total stake in Navigator before he began selling off his shares earlier in 2017.

"Both of these transactions were reported under the ethics laws on Form 278-T transaction reports," Ross said.

"The reports are reviewed and certified by Department of Commerce ethics officials and contain a certification by the Office of Government Ethics that I am in compliance with applicable laws and regulations as it relates to these transactions."