Commerce Secretary Wilbur Ross received approval Monday from the top federal ethics agency for short selling the stock of a shipping company linked to close associates of Vladimir Putin.
The review by the Office of Government Ethics was to determine whether the transaction complied with federal ethics laws, including conflict of interest rules. Ross, who wasn’t required to divest his holdings in shipping companies, shorted stock in Navigators Holdings Ltd. on Oct. 31, a day after a reporter from the New York Times contacted Ross seeking comment about his holdings in the company and its dealings with a Russian energy firm.
In his initial financial disclosure form, provided to OGE in January 2017, Ross disclosed that the entities that held his stake in the shipping company, as well as other assets, were valued at $2 million to $10 million. Officials disclose the value of their assets in broad ranges.
"I first sold Navigator stock on May 31, as reported on my public filing,” Ross said in a statement Tuesday. "I later learned in late October that there were more shares belonging to me in an account that the company had opened in electronic form at a firm acting as its agent.”
Ross said he "decided to continue selling those shares, but since I did not have physical possession of them in order to make delivery in the required time period, I technically sold them short and when the shares were delivered by the agent on November 16 I delivered those shares to the broker to close out the transaction. Therefore, it made no economic difference to me whether the shares went up or down between the sale date and the date I delivered them.”
The Commerce Department added in a statement that Ross "continues to follow the guidance” of department ethics officials "to ensure compliance with federal laws and regulations.”
Navigator Holdings’ Kremlin connections came to light in November, when news organizations that are part of the Washington-based International Consortium of Investigative Journalists, whose partners include the New York Times, published reports based on documents leaked from the Bermuda law firm Appleby to the German newspaper Suddeutsche Zeitung that were shared with the consortium.
The documents showed that Navigator Holdings did substantial business with a Russian energy firm called Sibur, whose owners include Russian President Putin’s son-in-law Kirill Shamalov and Gennady Timchenko, a Russian oligarch. Both are subject to American sanctions.
In response to the initial reports in early November, Ross said in a Bloomberg TV interview, "We have no business ties to those Russian individuals who are under sanction.” He added that he had nothing to do with the company’s negotiations with Sibur but that "there’s nothing whatsoever wrong with Navigator having a deal with them.”
Ross held the position until November 16, a second filing with OGE shows. The transaction was valued at $100,000 to $250,000, his federal disclosures show.
OGE also approved a series of transactions made in October in which Ross divested nine W.L. Ross funds worth at least $7.6 million to a trust in which neither he nor his wife has a financial interest. Those transactions were first reported by Forbes magazine.
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