Corruption in the Trump Administration Is Spreading

Corruption in the Trump Administration Is Spreading

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You’ve got to at least give credit to Commerce Secretary Wilbur Ross for finding the silver lining—or the gold one, as it were.

It was late October 2017, just days before the so-called Paradise Papers, a tranche of leaked documents, would reveal that when he divested some of his holdings upon taking office, Ross had retained assets in a shipping company enmeshed in Vladimir Putin’s inner circle. Ross had not disclosed the investment, and apparently had no legal obligation to do so. Still, the realization that the commerce secretary held a stake in a company tied to Putin at a time of Russo-American tension was likely to be damaging, no two ways about it.

So he apparently decided to make a buck off the bad news. Three days after a New York Times reporter contacted Ross to inquire about the stake in Navigator Holdings, the company, he took a short position on it—in effect, betting the value of his investment would drop. Lo and behold, when reports about Ross’s stake were published, the stock dropped somewhat. Ross then made a profit of between $100,000 and $250,000, according to disclosures. It looks like an ingenious maneuver: He absorbed the public-relations damage, but at least made some cash from it.

Forbes first reported the short sale earlier this week. It appears that Ross was trading on nonpublic information—what’s typically known as insider trading, and which government officials cannot do. Ross denies this, but as Times reporter Mike McIntire writes, Ross’s explanation doesn’t really make sense.

There is more in the Forbes piece. Ross also had assets with ties to the Chinese government and the Russian-tied Bank of Cyprus. His family also appears to retain these and some unsold Navigator assets, Forbes found. Ross says he handed these holdings off to a trust for his family. But that hardly solves the question of conflicts of interest: As commerce secretary, he has the power to make decisions that will affect those investments. In other words, he can wield the federal government to enrich his heirs.

The “revolving door,” in which people move from the private sector to the public, thus aiding their former companies, or from the public to the private, profiting handsomely at the companies they used to regulate, is an established and pernicious phenomenon. The Trump administration seems determined to sidestep the revolving door by simply combining the two steps: Now, government officials can simply profit simultaneously.

The allegations against Ross make for an interesting contrast with those of Environmental Protection Agency Administrator Scott Pruitt, who has been the subject of repeated stories about his increasingly slapstick moves at self-enrichment, from trying to get his wife a Chick-fil-A franchise and getting his daughter into law school to sending aides to acquire used mattresses and Ritz-Carlton moisturizer. It’s not that these moves are acceptable—they constitute abuse of office and taxpayer dollars—but the monetary stakes are low. Pruitt’s moves are part of a broader trend of conspicuous corruption within the administration, as Cabinet members and others seek to ape the president’s own ostentatious luxury, but to do so on the public dime.

What Ross is doing doesn’t make for such grabby headlines and is less easily understood, but it’s also more serious, because the potential profits are much greater. Like the Cabinet members seeking to live a little higher on the hog, Ross’s behavior mirrors the president he serves. Ross, like Trump, has lied about and inflated his net worth. Like Trump, Ross’s conflicts of interest create the potential for using the federal government to enrich his heirs and family, to whom he has kinda, sorta divested his fortune. As with Trump, the size of those gains could be large—but as with Trump, incomplete disclosures mean the public may never know how much the families profited, if at all. And like Trump, Ross may not have broken any laws.

“Maintaining all those conflicts of interest appears to be entirely legal—a reflection of ethics laws woefully unprepared for governing tycoons like Donald Trump and Wilbur Ross,” Forbes reports.

Ross is one of several Trump appointees with potentially lucrative conflicts of interest. This week, Businessweek reported on Trump’s nominee to lead the National Oceanic and Atmospheric Administration, Barry Myers. As chief executive officer of AccuWeather, Myers and his brother Joel have long lobbied against the National Weather Service, a division of NOAA. The Myerses objected to the fact that NWS gives away its data, which is generated at taxpayer expense. The problem, from their perspective, was the competitive challenge that it posed to AccuWeather, which charged customers for its own data—never mind that AccuWeather relied on the free NWS forecasts. They sought to limit what data NWS could make public. Attempts in Congress failed. But, as Businessweek reported, Barry Myers

remains a champion of limiting the agency’s public role, opposing its use of social media to spread warnings. “We fear that he wants to turn the weather service into a taxpayer-funded subsidiary of AccuWeather,” says Richard Hirn, attorney for the National Weather Service Employees Organization. Myers may soon be in a position to do that. In October 2017, President Trump nominated him to be NOAA’s administrator.

Furthermore, as Businessweek noted, “unlike Environmental Protection Agency Administrator Scott Pruitt, who merely has close ties to companies he regulates, Myers co-owns one that could directly benefit from his policies.” Myers has vowed to leave AccuWeather if confirmed, but his family will still control the company.

New revelations against Interior Secretary Ryan Zinke suggest he has his own serious conflicts of interest. Politico reports:

A foundation established by Interior Secretary Ryan Zinke and headed by his wife is playing a key role in a real-estate deal backed by the chairman of Halliburton, the oil-services giant that stands to benefit from any of the Interior Department’s decisions to open public lands for oil exploration or change standards for drilling.

Meanwhile, questions remain about how an electrical company with just two employees located in Zinke’s hometown snagged a $300 million contract for electrical work in Puerto Rico after Hurricane Maria. The contract was later canceled after the company failed to deliver. Zinke has said he was not involved. Zinke has also engaged in some of the same fine living on taxpayer dollars as other Cabinet members, including extravagant flight costs.

These high-dollar conflicts of interest are not new to the administration. In fact, the most brazen of them was revealed last year. Trump appointed Carl Icahn, like Ross a famed investor, as an unpaid adviser. In that capacity, Icahn worked to advance his own personal interests, pushing the EPA to aid a refinery he owns. Icahn was forced to resign on the eve of a New Yorker report on the conflict, though in April the EPA approved a waiver Icahn had sought for the refinery.

That incident alone should have been an embarrassment to the administration, a one-time black eye. Instead, it continues to repeat itself, and Democrats are planning to use corruption as a central talking point in the midterms.

That pattern is a testimony to presidential leadership: As long as Trump himself does not make full financial disclosures and creates circumstances for his family to profit from his stewardship of the country, it’s only logical that his lieutenants will continue to emulate him.

Source: technology

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