A government watchdog group is calling for the Commerce Department's inspector general to investigate whether Secretary Wilbur Ross violated criminal conflict of interest laws, in a detailed, more than 100-page report it filed with the IG Monday and was obtained by CNN.
In the extensive report supporting its request the Campaign Legal Center also claims the Secretary may have made false statements and omissions on a government form. While the allegations aren't new, CLC is calling on the inspector general to investigate whether Ross acted knowingly when he allegedly violated the law.
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The report may provide a road map for how to analyze whether a government official might have violated the criminal conflict of interest law but it's unclear how the IG will treat CLC's request.
The Commerce Department did not comment on the report and referred CNN to Ross's attorney. Ross's attorney, Theodore W. Kassinger, said in an emailed statement: "Secretary Ross has not violated any conflict of interest law or regulation. He has not participated personally and substantially in, nor taken any action in regard to a particular matter that would have had a direct and predictable effect on his financial investments."
The CLC, which has largely focused on campaign finance violations since it was founded in 2002, is filing its request after months of media reports and lawmakers asking questions about Ross's financial holdings, potential conflicts and lapses in reporting on his financial assets.
Last month, the Office of Government Ethics took Ross to task for what it said were inconsistencies in his financial disclosure forms and for Ross's failure to divest certain investments "created the potential for serious a criminal violation."
The federal conflict of interest law bars government officials from working on policies that have a direct impact on their assets. To address these conflicts, government officials either divest the assets that present a possible conflict or recuse from the policy work.
In three separate cases, CLC alleges that Ross maintained assets that presented conflicts and he did not recuse himself from policy work that impacted those assets.
Ross's attorney, Kassinger, said "CLC's framing of these assertions and their conclusion are simply wrong."
In one case, the report highlights Ross's interests in railcar company, Greenbrier, which uses steel as a raw material.
Ross launched an investigation into steel imports in the spring of 2017, ahead of the Trump administration's decision to slap steep tariffs on imported steel and aluminum. In public comments to Commerce on May 30, Greenbrier expressed concern about the possibility of a steel tariff and the impact it could have on its business.
The conflict of interest law prohibits a government employee from participating in any matter that impacts his or her own financial interests—regardless of whether it results in a gain or loss. The group lists several reasons for why the law is blind to whether an employee profits from a conflict.
For example, "an employee who is a sophisticated investor might be acting strategically to achieve a long-term gain from a short-term loss."
Ross divested his shares in the company in three different transactions in 2017: March, May and December, according to government filings called periodic transaction reports. CLC alleges that a notation in December's transaction report "seems to claim that he [Ross] didn't know he owned Greenbrier until December" or that 'he discovered his ownership of Greenbrier stock on three separate occasions in 2017 and sold the stock after each discovery."
CLC called the first interpretation "implausible" and the second problematic because there's no evidence that Ross recused from the steel investigation once he discovered he held Greenbrier stock.
Greenbrier did not immediately respond to a request for comment.
"Even if Greenbrier truly surprised Ross three times in 2017, there is a problem with his participation in the steel investigation," CLC contends.
Ross's attorney said "Secretary Ross's ethics agreement did not require him to recuse" from the steel tariffs and Greenbrier. He said current law would not require Ross to recuse himself on "such broad topics."
"Ross is full of excuses," said CLC director Brendan Fischer. "On the one hand he claims to be a sophisticated investor who is now in charge of a country with a 19 trillion-dollar GDP and on the other hand he seems to be a klutz who has no idea what he's invested in, has no idea what he's divested from. He can't have it both ways."
Democratic lawmakers asked the IG to review Ross's compliance with ethics requirements at least twice. In November, a group of six congressional members led by Senator Richard Blumenthal sent the IG a letter, which was followed by a separate request by ranking members of House Committees with jurisdiction over Commerce.
CNN asked the Commerce IG whether it had responded to the Congressional requests. The Commerce IG spokesperson said "the matter is under review."
It's unclear how CLC's report will impact the IG's ongoing examination.
In addition to the Greenbrier example, CLC's report includes two other allegations of possible violations of the conflict of interest law.
In January 2017, Ross pledged to divest his stock in his former employer Invesco, the company that owns Ross's private equity firm, and recuse from matters impacting Invesco until the divestment was complete. CLC alleges he didn't immediately divest and didn't recuse himself either. An Invesco subsidiary, W.L. Ross & Co., LLC, "closed a deal for a multi-billion dollar investment in Chinese steel" a month after Ross entered government, said CLC.
"Given the size of this investment, planning and negotiations for the deal would have begun long before Ross left the company to assume his current position as Commerce secretary," says CLC. Later the report notes "Such a massive undertaking would not have escaped Ross's notice as Chairman and Chief Strategy Officer."
Ross's financial disclosures reveal that he owned some Invesco stock throughout the year in 2017 as he led the imported steel investigation.
Ross claims he "mistakenly" thought all of his shares had been sold when in fact the shares hadn't. Ross said he "promptly sold" the shares once he found he still owned them.
CLC claims it's implausible that Ross wouldn't know if he owned the stock.
Ross's attorney said "Secretary Ross did recuse himself from Invesco matters as required."
"The Secretary's explanations of his reporting mistakes in any case do not alter the fact that he was not required to recuse himself specifically from China trade and steel trade issues," he said.
Invesco is one stock that Ross was holding even after Ross declared he had divested all financial interests in companies that his ethics agreement required. Ross made the declaration on November 1st and then recorded two sales of Invesco stock in December, the financial disclosures show. A similar pattern emerged with Ross's ownership and disclosure of shares in other companies, the report said.
CLC also spotlights Ross's investment in a shipping company called Navigator, which transports liquefied petroleum gas (LPG) among other gas related products. While holding his Navigator stake, Ross was active in the administration's efforts to promote the export of liquefied natural gas (LNG) in 2017. The policy directly benefited Navigator even though LPG and LNG are separate products, CLC argues, because the two are related and increased LNG exports would, in turn, increase LPG exports.
Ross's attorney said Ross' ethics agreement did not require him to recuse in the same way regarding Navigator. He said there was not "a direct and predictable effect" on the financial interests of Navigator. "The Secretary was not, for example, negotiating a specific import license for Navigator to carry LPG exports to China. The negotiations concerned broad market access issues for all US exporters," Kassinger said.