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.