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.”

Facebook Stole Our Invention: Tech Company Founder

Michael McKibben, founder of Ohio-based Leader Technologies, said that his son attended Harvard at the same time Zuckerberg was a student there. He alleges that Zuckerberg got access to a white paper dealing with certain technological advances that McKibben emailed to his son. “I believe when Zuckerberg hacked into servers at Harvard, he got a copy of the white paper,” McKibben told CNBC.

“Facebook stole our invention, and we’d like it back,” said McKibben. “As far as I’m concerned, our investors, who’ve been with us for a long time, deserve a payday.”

That payday could be significant – if the patent case is successful, millions of dollars in Facebook’s revenue could be at stake. Facebook has already settled the most famous case alleging Zuckerberg stole someone else’s idea: paying his fellow Harvard students Cameron and Tyler Winklevoss a reported $65 million in cash and stock. That prolonged fight was famously portrayed in the movie “The Social Network.”

Being rich wrecks your soul. We used to know that.

According to an apocryphal exchange between F. Scott Fitzgerald and Ernest Hemingway, the only difference between the rich and the rest of us is that they have more money. But is that the only difference?

We didn’t used to think so. We used to think that having vast sums of money was bad and in particular bad for you — that it harmed your character, warping your behavior and corrupting your soul. We thought the rich were different, and different for the worse.

.. The idea that wealth is morally perilous has an impressive philosophical and religious pedigree. Ancient Stoic philosophers railed against greed and luxury, and Roman historians such as Tacitus lay many of the empire’s struggles at the feet of imperial avarice. Confucius lived an austere life. The Buddha famously left his opulent palace behind. And Jesus didn’t exactly go easy on the rich, either — think camels and needles, for starters.

.. The point is not necessarily that wealth is intrinsically and everywhere evil, but that it is dangerous — that it should be eyed with caution and suspicion, and definitely not pursued as an end in itself; that great riches pose great risks to their owners; and that societies are right to stigmatize the storing up of untold wealth

.. Aristotle, for instance, argued that wealth should be sought only for the sake of living virtuously — to manage a household, say, or to participate in the life of the polis. Here wealth is useful but not inherently good; indeed, Aristotle specifically warned that the accumulation of wealth for its own sake corrupts virtue instead of enabling it.

.. Pope Francis. He’s proclaimed that unless wealth is used for the good of society, and above all for the good of the poor, it is an instrument “of corruption and death.”

.. Over the past few years, a pile of studies from the behavioral sciences has appeared, and they all say, more or less, “Being rich is really bad for you.” Wealth, it turns out, leads to behavioral and psychological maladies. The rich act and think in misdirected ways.

.. When it comes to a broad range of vices, the rich outperform everybody else. They are much more likely than the rest of humanity to shoplift and cheat , for example, and they are more apt to be adulterers and to drink a great deal . They are even more likely to take candy that is meant for children.

.. Mercedes and Lexuses are more likely to cut you off than Hondas or Fords: Studies have shown that people who drive expensive cars are more prone to run stop signs and cut off other motorists .

.. They also give proportionally less to charity — not surprising, since they exhibit significantly less compassion and empathy toward suffering people. Studies also find that members of the upper class are worse than ordinary folks at “reading” people’ s emotions and are far more likely to be disengaged from the people with whom they are interacting — instead absorbed in doodling, checking their phones or what have you.
.. rich people, especially stockbrokers and their ilk (such as venture capitalists, whom we once called “robber barons”), are more competitive, impulsive and reckless than medically diagnosed psychopaths.
.. luxuries may numb you to other people
.. simply being around great material wealth makes people less willing to share
.. Vast sums of money poison not only those who possess them but even those who are merely around them. This helps explain why the nasty ethos of Wall Street has percolated down, including to our politics
.. They seem to have a hard time enjoying simple things, savoring the everyday experiences that make so much of life worthwhile.
.. Because they have lower levels of empathy, they have fewer opportunities to practice acts of compassion — which studies suggest give people a great deal of pleasure .
.. they believe that they deserve their wealth , thus dampening their capacity for gratitude, a quality that has been shown to significantly enhance our sense of well-being. All of this seems to make the rich more susceptible to loneliness; they may be more prone to suicide, as well.
.. By and large, those complaints were not about wealth per se but about corrupt wealth — about wealth “gone wrong” and about unfairness. The idea that there is no way for the vast accumulation of money to “go right” is hardly anywhere to be seen.
.. Wealth has arguably been seen as less threatening to one’s moral health since the Reformation, after which material success was sometimes taken as evidence of divine election. But extreme wealth remained morally suspect
.. particular scrutiny and stigmatization during periods like the Gilded Age
.. only in the 1970s did political shifts cause executive salaries skyrocket, and the current effectively unprecedented inequality in income (and wealth) begin to appear, without any significant public complaint or lament.
.. Certain conservative institutions, enjoying the backing of billionaires such as the Koch brothers, have thrown a ton of money at pseudo-academics and “thought leaders” to normalize and legitimate obscene piles of lucre.
.. high salaries naturally flowed from extreme talent and merit

Justice Gorsuch Delivers

“One of my proudest moments was when I looked at Barack Obama in the eye and I said, ‘Mr. President, you will not fill this Supreme Court vacancy,’ ” Mr. McConnell told a political gathering in Kentucky last summer.

With this audacious pledge — made only hours after news of Justice Antonin Scalia’s death on Feb. 13, 2016, reached the public — Mr. McConnell demolished longstanding Senate tradition and denied a vote to one of the most well-qualified nominees ever

.. Justice Gorsuch, who was confirmed less than three months ago, has already staked his claim as one of the most conservative members of the court.

.. Chief Justice John Roberts Jr., a staunch conservative in his own right, often seeks out points of compromise among the justices. On June 26, the court’s last opinion day, Justice Gorsuch appeared to be having none of it.

.. The conservative majority will grow even stronger if more justices retire during Mr. Trump’s term, a very good possibility. At that point, the president and Senate Republicans — who destroyed the filibuster for Supreme Court nominees in order to confirm Justice Gorsuch — will be able to put anyone they like on the court.
.. Mr. Trump will be out of power by 2025 at the latest. But thanks to Mr. McConnell, Justice Gorsuch, and whoever else might join him in the next couple of years, will entrench a solid conservative majority on the court for far longer.