Leaked Records Show Trump Aide Hid Ties to Putin Cronies

Wilbur Ross testifies before a Senate Commerce, Science and Transportation Committee confirmation hearing on his nomination to be commerce secretary at Capitol Hill on January 18, 2017 in Washington. Carlos Barria / Reuters file

Ross’s apparent ethical probity won praise, even before he signed the divestment agreement, from both sides of the political aisle.

‘Our Committee Was Misled’

The documents seen by NBC News, however, along with a careful examination of filings with the Securities and Exchange Commission, tell a different story than the one Ross told at his confirmation. Ross divested most of his holdings, but did not reveal to the government the full details of the holdings he kept.

In his letter to the ethics official of the Commerce Department, Ross created two lists: those entities and interests he planned to get rid of and those he intended to keep. The second list consisted of nine entities, four of which were Cayman Islands companies represented and managed by the Appleby law firm, which specializes in creating complex offshore holdings for wealthy clients and businesses. The Wilbur Ross Group is one of the firm’s biggest clients, according to the leaked documents, connected to more than 60 offshore holdings.

The four holdings on the list of assets that Ross held onto were valued by him on the form as between $2.05 million and $10.1 million. These four, in turn, are

linked through ownership chains to two other entities, WLR Recovery Fund IV DSS AIV L.P. and WLR Recovery Fund V DSS AIV L.P., which were listed in Ross’ financial disclosure prior to confirmation, but were not among the assets he declared he would retain. According to an SEC filing, those entities hold 17.5 million shares in Navigator, which constitutes control of nearly one-third of the shipping firm.

“You look at all of these names,” Clark said, referring to the financial entities, “and they actually look like a code. And what we actually have to do is find — in a sense — a code that decrypts what these names mean and what these companies actually do.”

She said the way the companies were listed was deliberately vague. “I would say this gives the appearance of transparency,” she said, referring to Ross’s disclosure documents. “It’s sort of fake transparency in a sense.”

The Office of Government Ethics, which is responsible for executive branch oversight, approved Ross’s arrangement, and it was left almost entirely unchallenged by the Senate.

Sen. Richard Blumenthal, D-Conn., said members of Congress who were part of Ross’ confirmation hearings were under the impression that Ross had divested all of his interests in Navigator. Furthermore, he said, they were unaware of Navigator’s close ties to Russia.

“I am astonished and appalled because I feel misled,” said Blumenthal. “Our committee was misled, the American people were misled by the concealment of those companies.” Blumenthal said he will call for the inspector general of the Commerce Department to launch an investigation.

And a cursory look at Navigator’s annual reports reveal an apparent conflict of interest. Navigator’s second-largest client is SIBUR, the Russian petrochemical giant. According to Navigator’s 2017 SEC filing, SIBUR was listed among its top five clients, based on total revenue for the previous two years. In 2016, Navigator’s annual reports show SIBUR brought in $23.2 million in revenue and another $28.7 million the following year.

The business relationship has been so profitable that in January, around the time Ross was being vetted for his Cabinet position, Navigator held a naming ceremony for

two state-of-the-art tankers on long-term leases to SIBUR.

The Kremlin’s inner circle

One of the owners of SIBUR is

Gennady Timchenko, a Russian billionaire on the Treasury Department’s sanctions list. He has been barred from entering the U.S. since 2014 because authorities consider him a Specially Designated National, or SDN, who is considered by Treasury to be a member “of the Russian leadership’s inner circle.”

The Treasury Department statement said that Timchenko’s activities in the energy sector “have been directly linked to Putin” and that Putin had investments with a company previously owned by Timchenko, as well as access to the company’s funds.

Daniel Fried, who was the State Department sanctions coordinator under President Barack Obama, said the connection to Timchenko’s interests should have raised alarm bells.

“I would think that any reputable American businessman, much less a Cabinet-level official, would want to have absolutely no relationship — direct, indirect — … with anybody of the character and reputation of Gennady Timchenko,” Fried said. “I just don’t get it.”

Another major SIBUR shareholder is Leonid Mikhelson, who, like Timchenko, has close ties to the Kremlin. One of his companies, Novatek, Russia’s

second-largest natural gas producer, was placed on the Treasury’s sanctions list in 2014.

Included in the Appleby documents are details of an internal discussion that resulted in the law firm dropping Mikhelson as a client in 2014, over concerns regarding his financial affiliations.

“I would say to anybody who asked,” said Fried, “treat SDNs as radioactive. Stay away from them.”

Wilbur Ross, President-elect Donald Trump’s choice for Commerce Secretary, wears a ‘Make America Great Again Hat’ as he speaks briefly to reporters at Trump Tower on November 29, 2016 in New York City. Drew Angerer / Getty Images file

A third shareholder of SIBUR – and

deputy chairman of the board – is Kirill Shamalov, husband of Vladimir Putin’s daughter, Katerina Tikhonova. After the wedding, Shamalov’s meteoric rise to wealth led him to own as much as 21.3 percent of SIBUR’s stock until April, when he sold off around 17 percent for a reported $2 billion.

“It’s a new generation which is currently being prepared and groomed… to inherit whatever power and wealth Putin’s team has accumulated over the past years,” said Vladimir Milov, a former deputy energy minister in Putin’s government who is now working with the opposition.

Milov also said companies like SIBUR are often the way sanctioned Kremlin insiders have to keep doing business despite restrictions.

The Commerce Department statement said Ross never met Timchenko, Mikhelson, or Shamalov. It said he was not on the board of Navigator in March 2011 when the ships in question were acquired, or the following February when the charter agreement with Sibur was signed. It said Sibur was not under U.S. sanctions now or in 2012. The statement said Ross was on the board of Navigator from March 30, 2012 to 2014, and that no funds managed by his company ever owned a majority of Navigator’s shares.

But as

The Guardian reported Sunday, other public documents suggest a different story. A Navigator news release on March 2, 2012, said that Ross was already on the board at that point, and Sibur’s annual report for 2012 said the deal with Navigator was signed in March. In addition, Ross’ company issued a news release on Aug. 10, 2012, saying that the company had agreed to acquire a majority stake in Navigator.

Fried said he has no doubt of the connections between SIBUR and the Kremlin.

“If any senior official of the U.S. government, much less a Cabinet secretary … had any business dealings with sanctioned individuals, direct or indirect,” he said, “I would be appalled.”

Richard Painter, the chief White House ethics lawyer during the George W. Bush administration, said there needs to a close examination of whether Ross’ testimony to the Senate violated perjury laws. Painter also said Ross must recuse himself from all Russia-related matters because of the SIBUR connection.

“Secretary Ross cannot participate in any discussion or decision-making or recommendation about sanctions imposed on Russia or on Russian nationals when he owns a company that is doing business with Russian nationals who are either under sanctions or who could come under sanctions in any future sanctions regime,” Painter said. “That would be a criminal offense for him to participate in any such matter.”