New Details About Wilbur Ross’ Business Point To Pattern Of Grifting
A multimillion-dollar lawsuit has been quietly making its way through the New York State court system over the last three years, pitting a private equity manager named David Storper against his former boss: Secretary of Commerce Wilbur Ross.
.. The pair worked side by side for more than a decade, eventually at the firm, WL Ross & Co.—where, Storper later alleged, Ross stole his interests in a private equity fund, transferred them to himself, then tried to cover it up with bogus paperwork.
.. It is difficult to imagine the possibility that a man like Ross, who Forbes estimates is worth some $700 million, might steal a few million from one of his business partners. Unless you have heard enough stories about Ross.
.. Two former WL Ross colleagues remember the commerce secretary taking handfuls of Sweet’N Low packets from a nearby restaurant, so he didn’t have to go out and buy some for himself.
.. One says workers at his house in the Hamptons used to call the office, claiming Ross had not paid them for their work.
Another two people said Ross once pledged $1 million to a charity, then never paid.
.. Many of those who worked directly with him claim that Ross wrongly siphoned or outright stole a few million here and a few million there, huge amounts for most but not necessarily for the commerce secretary. At least if you consider them individually. But all told, these allegations—which sparked lawsuits, reimbursements and an SEC fine—come to more than $120 million.
.. If even half of the accusations are legitimate, the current United States secretary of commerce could rank among the biggest grifters in American history.
.. Those who’ve done business with Ross generally tell a consistent story, of a man obsessed with money and untethered to facts. “He’ll push the edge of truthfulness and use whatever power he has to grab assets,” says New York financier Asher Edelman. One of Ross’ former colleagues is more direct: “He’s a pathological liar.”
.. Such machinations now seem pathetic. But his billionaire status was not lost on another person obsessed with his net worth. Donald Trump termed Ross a “legendary Wall Street genius” and named him to his cabinet.
“In these particular positions,” Trump explained to a crowd of supporters, “I just don’t want a poor person.”
.. The future cabinet secretary’s private equity funds were underperforming—one on track to lose 26% of its initial value and another two dribbling out mediocre returns—and the accusations were starting to pile up. Roughly two months before the 2016 presidential election, the SEC announced WL Ross was paying a fine and refunding $11.9 million it allegedly skimmed from its investors, including interest.
.. the firm was also charging its investors on money that it had lost. Here’s how it worked: If WL Ross made an investment of, say, $100 million that declined dramatically, in the final years of the fund the firm was supposed to charge management fees on the actual value of the investment, not the $100 million starting point. However, WL Ross allegedly continued collecting fees on the amount invested
.. When approached about the discrepancy, Wilbur Ross initially insisted his firm was calculating the fees correctly
.. What makes it all more than a typical “he-said, she-said” dispute is the number of similar complaints against Ross.
.. alleging that he and his firm charged at least $48 million of improper fees
.. It would be like a restaurant owner telling his employees that they can eat for free—while taking the meal money out of their paychecks.
.. Of the top seven firm leaders listed on the 2006 website, none of them have the same roles today.
.. the majority—consisting of Storper, Mullin, David Wax and Pamela Wilson—are all actively waging legal battles against their former boss, Wilbur Ross.
.. In a presidential cabinet plagued by ethical problems, it can be easy to forget about Wilbur Ross. Most of the attention tends to center around obvious abuses, like Scott Pruitt getting a $43,000 sound-proof booth in his office or Tom Price wasting $341,000 on jet travel. But while Ross’ antics are more complicated, they involve far more money.
.. The central matter in all of Ross’ legal issues is his own credibility. “Lying on an ethics disclosure form, to Congressional and Senate committees, and falsely reporting compliance with an ethics plan, is neither ‘commonplace’ nor part of the accepted rough-and-tumble world of politics,” David Storper, Ross’ former right-hand man, argued in a court filing. “They are just lies.” Adds another onetime colleague: “This is a public servant who can’t tell the truth.”