The Office of Government Ethics strongly reprimanded Commerce Secretary Wilbur Ross for his failure to completely divest himself of his far-flung stock holdings in a timely fashion and for taking short positions in an effort to offset certain stocks until they could be sold.
Ross replied by saying that even though his ethics agreement allows him to retain private equity holdings, he will now sell all his holdings and put them in Treasury securities in order “to maintain the public trust.”
David J. Apol, acting director and general counsel of the ethics office, told Ross that “your failure to divest created the potential for a serious criminal violation on your part and undermined public confidence.”
In a letter posted on the Web, Apol added that “your actions, including your continued ownership of assets required to be divested in your Ethics Agreement and your opening of short sale positions, could have placed you in a position to run afoul of the primary criminal conflict of interest law.”
The Office of Government Ethics did not recommend any punishment, however, saying “we have no information to contradict” Ross’s assertions that his failure to sell all his massive stock holdings was “inadvertent.” And it said that an examination of Ross’s calendar, briefing books and correspondence did not turn up any evidence of a criminal violation.
But the ethics office said that “even inadvertent errors regarding compliance . . . can undermine public trust in you and the overall ethics program.”
When Ross became commerce secretary after a successful career as an investor and investment manager, he vowed to sell off his approximately $800 million in assets to avoid any conflicts of interest. And he did sell much of the holdings while putting others in trust for his family. On Nov. 1, 2017, he signed a statement to the office that he had fully divested himself of stocks.
But in disclosure statements filed with the Office of Government Ethics over the past six months, Ross has revealed that he had continued to hold shares of five companies after the deadline for divestment. That included Invesco, the fund he had long managed. In December, Ross sold two tranches of Invesco in amounts of at least $5 million each.
Source: The Washington Post