U.S. Commerce Secretary Wilbur Ross shares significant business interests through a shipping venture in Russia with President Vladimir Putin's son-in-law and an oligarch subject to American sanctions, newly leaked documents showed Sunday.
Ross, a 79-year-old billionaire industrialist, has an investment in partnerships valued at between $2 million and $10 million in the shipper, Navigator Holdings, according to his government ethics disclosures.
The shipping company earns millions of dollars a year transporting natural gas for Sibur, a Russian energy company that 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.
Ross sold off numerous holdings when he joined President Donald 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.
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 7 million internal 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 other media, 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.
Ross, through a Commerce Department spokesman, said he removes himself as secretary from matters related to trans-oceanic shipping and consults with the agency's ethics officials "to ensure the highest ethical standards."
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 will likely 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. 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," said Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy.