Wilbur Ross will never understand why - but he's unfit to be Commerce Secretary
- Wilbur Ross' close business ties to Putin's family were revealed in the Paradise Papers, and now Ross is on a media blitz trying to undo the damage.
- Ross's judgment - keeping his stake in a shipping company that counts Putin's son-in-law as a client - goes against our expectations of public officials.
- In the US, we often ask public officials not to simply avoid impropriety, but also the appearance of impropriety, so it doesn't matter whether or not he broke the law.
Wilbur Ross doesn't think he did anything wrong.
Despite the fact that Paradise Documents - leaked papers that expose the tangled web that is the off-shore financial holdings of the super-rich - revealed that he has business ties to Vladimir Putin's family through a $10 million stake in shipping company Navigator Holdings, the Commerce Secretary still thinks he's fit to hold office.
He is not, but he'll likely never understand why. I'll explain.
On Monday morning he insisted to Bloomberg TV's Francine Lacqua that there is nothing improper about his stake and that he did disclose it in several places (though reports challenge the notion that it was disclosed adequately).
"I've been actually selling it anyway, but that isn't because of this," Ross said, though he did not explain.
What all of this tells us is that Ross didn't care enough about appearances to divest from an investment that made the son-in-law of the leader of a hostile foreign government his client. There's nothing illegal about this, it's just unconscionable. In US government, officials are often told to be careful of not only impropriety but also the appearance of impropriety.
Here's the way you're supposed to think about ethics if you're a US Judge, for example:
Canon 2: A Judge Should Avoid Impropriety and the Appearance of Impropriety in all Activities
(A) Respect for Law. A judge should respect and comply with the law and should act at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary.
(B) Outside Influence. A judge should not allow family, social, political, financial, or other relationships to influence judicial conduct or judgment. A judge should neither lend the prestige of the judicial office to advance the private interests of the judge or others nor convey or permit others to convey the impression that they are in a special position to influence the judge. A judge should not testify voluntarily as a character witness.
(C) Nondiscriminatory Membership. A judge should not hold membership in any organization that practices invidious discrimination on the basis of race, sex, religion, or national origin.
Why do we do care about appearances? Because our institutions are weakened when we think our officials are easily corrupted. The Commerce Secretary should be wise enough to know that the American people would be disheartened to find out he has a financial connection to Putin's family.
If he's not wise enough to realize that, then he shouldn't be in the office he holds.
"We have no business ties to those Russian individuals who are under sanction," Ross also reasoned in the Bloomberg interview.
That may be true, but all those individuals have ties to Putin. He is the head of the country's kleptocratic government, and there's no getting rich in Russia without his blessing. A tie to Putin is a tie to all the reasons why we have sanctions on Russia in the first place.
We should note here that Ross has other close ties to Russia's Putin-beholden superrich. Back in 2013, the Bank of Cyprus collapsed. Cyprus has had a close relationship with Russia's oligarchs since the collapse of the USSR, and they have a lot of money stashed there.
A year later, Ross became the biggest shareholder in the bank. Shortly after that, Russian conglomerate Renova Group announced that it would be the second biggest shareholder. Renova is controlled by Russian billionaire Victor Vekselberg - a close Putin ally.
Here's how close, from Mother Jones:
Vekselberg and the Renova Group have a history of close ties to the Kremlin, and Vekselberg has been publicly regarded as a Putin-endorsed oligarch. One pet project of Vekselberg was the acquisition and repatriation to Russia of Fabergé eggs. It was an expensive endeavor; Vekeslberg told an interviewer in 2013 that he spent more than $100 million to acquire the eggs, which once were owned by the late Malcolm Forbes, when they came up for sale in 2004. Apparently his egg-chasing bought him goodwill from the Kremlin. He noted that Putin had personally thanked him for this act: "I've seen the emotion of our president. It's important to him that a Russian citizen has brought back this important collection." During the Putin years, Vekselberg has expanded his business empire. He was once accused in a lawsuit of using gunmen to gain control of a Siberian oil field.
Former KGB agent Vladimir Strzhalkovskiy, who also has close ties to Putin also joined the Bank of Cyprus' board around this time. For its part, The White House has been cagey about Ross' responses to questions about his stake. In February, Senator Ben Nelson (D-FL) said the Trump administration was sitting on valuable information about Ross' ties to the bank. Ross didn't resign from the bank's board until March, though he remains an investor there too.
In business what matters, ultimately, is whether or not you've broken the law. Government is another game.
Appearances matter because they build trust. If you don't have trust, you don't have legitimacy. Hopefully, Americans are learning something from this - that a life in the public eye takes a lifetime of preparation and that politics is truly a profession.
If you - like Ross - are not ready to face the scrutiny, get out.