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Wilbur Ross: Another Russia Connection

March 3, 2017

wilbur-ross

Given everything else going on, nobody paid much attention to the nomination of Wilbur Ross, who was confirmed as Secretary of Commerce on February 27 by a vote of 72-27. But it appears that Ross is yet another Trump associate who has significant financial ties to the Russian oligarchy and, by logical extension, the Russian government.

This is a very complicated story, but it was explicated well by Rachel Maddow on her broadcast earlier this week.  Watch the segment here.  It’s long, but it’s better than anything else you’ll see on television this weekend. As I said, this involves a very complex web of connections with lots of fascinating tangents, but reduced to its most basic essence, the relevant part of the story is as follows:

Since 2014, Ross has been a business partner of Viktor Vekselberg, one of Russia’s richest men and a close associate of Vladimir Putin, in the Bank of Cyprus. According to an investigation by Mother Jones (and other press accounts),the island of Cyprus (which is an EU member country) and this bank in particular had become a haven where rich Russians could expatriate their money to avoid Russian taxes and, likely in many cases, launder funds acquired by, um, unorthodox means. In 2013, the bank was on the verge of collapse, leading to a rescue in which billions in Russians’ deposits were converted to a majority of the bank’s shares, which worried European financial authorities. Enter Wilbur Ross, who in 2014 led a takeover of the bank in which Russian shareholders were offered a buyout. Ross then became the bank’s largest individual shareholder.

Soon thereafter, the bank announced that Vekselberg’s conglomerate, the Renova Group, had become the bank’s second-largest shareholder. Vekselberg and the Renova Group have a history of close ties to the Kremlin. In October 2014, a new board of directors was unveiled, which included Ross as vice-chairman. According to the Mother Jones story, also on the board would be Maksim Goldman, a Renova executive representing Vekselberg’s interests, and Vladimir Strzhalkovskiy, a previous board member whom Russia Today a year earlier had identified as a Putin associate and former KGB official. Ross and Vekselberg also recruited Josef Ackermann, a former head of Deutsche Bank, to come in as chairman. This was another Russian connection. As Bloomberg reported, “Ackermann, a regular visitor to the Putin-hosted St. Petersburg International Economic Forum while head of Deutsche Bank, is a director of Renova Management AG, an industrial holding company controlled by Vekselberg.” (Ackermann left Deutsche Bank after a scandal involving banking irregularities and $10 billion in Russian funds and for which the bank eventually paid a punitive fine of $630 million.) For a thorough look at the Bank of Cyprus, click here.

According to a report in the Miami Herald, Ross was involved with Russia during the 1990s when President Clinton appointed him to serve on the U.S-Russia Investment Fund, an investment fund set up in 1995 to help push the new Russian nation toward a free-market economy after the Soviet Union collapsed. The fund was converted to a nonprofit corporation in 2008 and many of its assets sold off. The banking investments were purchased by a subsidiary of German financial giant Deutsche Bank, led at the time by Josef Ackermann.

There is another curious tangent to this story. Another Russian oligarch named Dmitry Ryvoloviev (sometimes spelled Ryboloblev)–aka “the fertilizer king”–in 2010 acquired a 10 percent share of the Bank of Cyprus. A few years earlier, Ryvoloviev was involved in a spectacularly expensive divorce battle–reportedly involving a settlement of $4.5 billion–and was looking for places to buy in order to shelter his monetary assets.  Among various real estate purchases he made around the world was an enormous “white elephant” property in Palm Beach, which he bought in 2008 for a reported $95 million from Donald Trump. The purchase price raised eyebrows at the time, because Trump had purchased the property at auction only four years earlier for $41 million, and the real estate market–especially in Florida–had softened as the mortgage crisis began to plunge the country into a deep recession. Apparently, Ryvoloviev didn’t care–he just needed some place to stash his money. At the time, Trump’s organization reportedly really needed the money to service loans from–wait for it–Deutsche Bank, Trump’s largest known lender.

It sort of looks like a form of money laundering, but you know, in a legal kind of way, right? FYI, last year the new owner announced plans to tear down the house and divide the property into three parcels, each to sell for $35-40 million.

All of this was known to the senators who held the hearings for Ross’s confirmation.  In fact, six senators led by Florida’s Bill Nelson asked written questions about Ross’s relationship to other Russian stakeholders in the Bank of Cyprus. Ross also received a second letter on the Friday before his confirmation from Senator Cory Booker with more detailed questions about possible Russia links. Both Ross and the White House stonewalled and failed to respond.

Nonetheless, he was confirmed. Nelson even voted for him.  Go figure!

If you want to see how your senator voted, click here.  You might be surprised.

Update: Tonight (3/3) on the Rachel Maddow show, she closed with an intriguing segment about Ryvoloviev’s plane being at the same airport at the same time as Trump’s plane on several occasions during the past year in Concord (NC), Charlotte, Las Vegas, and Miami. Doesn’t prove anything, of course, but it’s an awfully interesting series of coincidences.

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