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Monday, December 09, 2019 {{ new Date().getDay() }}

Reprinted with permission from ProPublica.

This story was co-published with Forbes.

The chief of staff for Secretary of Commerce Wilbur Ross, Wendy Teramoto, still owns a stake in a shipping company tied to associates of Vladimir Putin, despite the fact that her former role as a board member for the same company prompted six Senate Democrats to request an investigation into her apparent conflicts of interest last month.

“We have not been notified, nor are we aware, of a formal investigation by the inspector general,” Commerce Department spokesperson James Rockas said in a statement. “But we continue to answer any questions that are raised by department ethics officials or the inspector general.” The statement said that Teramoto has recused herself from any matters relating to her investments. (The same senators also requested an investigation of Ross, who initially retained an estimated $3.4 million stake in the company, Navigator Holdings, but has since sold it.)

As long as Teramoto hangs onto her own investments, she will likely remain under scrutiny, especially since there is evidence that her official actions are affecting the shipping industry, in which she is heavily invested.

Teramoto previously worked for Ross at his private equity firm WL Ross & Co. She invested in funds that held Navigator stock, as well as owning shares directly, and also served on the board of the shipping company from 2014 to July 2017. From 2014 to 2016, Navigator did $68 million worth of business with a Russian petrochemicals company named Sibur. That company is partially owned by two billionaires in Putin’s inner circle, Kirill Shamalov and Gennady Timchenko.

In its annual report filed in March, Navigator said Teramoto directly owned $118,000 of the company’s stock. The Commerce Department spokesperson confirmed that Teramoto had not sold her Navigator stake or interests in WL Ross funds that held other shipping companies, such as Diamond S. Shipping.

One of the most valuable assets listed on Teramoto’s financial disclosure form, which she filed in July, is her carried interest — a cut of the managers’ profits — in a fund called WLR Recovery Fund IV, which she valued at between $1 million and $5 million. An examination of that holding demonstrates how easily Teramoto’s portfolio could pose conflicts of interest.

WLR Recovery Fund IV counts Navigator, as well as other shipping interests, among its holdings. It also includes investments such as Amalgamated Bank and Exco Resources. Another entity in which Teramoto is invested, WLR Recovery Associates V, includes additional positions in shipping companies, as well as a stake in the Russia-connected Bank of Cyprus.

If those funds perform well, they will make up a significant chunk of Teramoto’s net worth. In total, she listed personal net assets worth $6 million to $19.3 million on the disclosure.

Although it is legal for Teramoto to own assets — even ones like Navigator that present potential conflicts of interest — while she serves in the government, she cannot participate in decisions that would clearly affect her holdings. “[With] any asset, the question is what you’re doing in the Commerce Department,” said Richard Painter, who served as the chief ethics lawyer in the George W. Bush administration. “Is there a direct and predictable effect on any of your financial holdings? If it does, you commit a crime.”

Teramoto’s role inside the Commerce Department — and when she signed on — remains a bit of a mystery. In May, Ross referred to her as his chief of staff in a taped interview with Bloomberg, at a time when the Department of Commerce now claims she was not yet a full-time employee. Two months later, Teramoto filed a financial disclosure report listing her position as a “senior advisor.” A spokesperson for the Commerce Department said Sunday that she did not become chief of staff until Aug. 1. “The Secretary must have misspoken,” the spokesperson said, when informed that Ross had publicly called her his chief of staff three months earlier.

The timing of her official employment with the Commerce Department is all the more critical given that Teramoto remained on the board of the private company until July; it raises the possibility that she was a high-ranking official in the U.S. Department of Commerce at the same time she was on the board of a company doing business with Russians.

In the same taped interview, Ross credited Teramoto with doing much of the work on a trade deal with China that affected, among other things, shipments of liquefied natural gas. That comment raised eyebrows because Navigator transports gas products. Its ships, however, are incapable of transporting liquefied natural gas, according to a company spokesperson.

Even before the most recent revelations, the six Senate Democrats who requested an investigation — Richard Blumenthal of Connecticut, Maggie Hassan of New Hampshire, Cory Booker of New Jersey, Maria Cantwell of Washington, Tammy Baldwin of Wisconsin and Tammy Duckworth of Illinois — expressed their concern with the overlapping responsibilities in their November letter to the inspector general of the Commerce Department: “These reports about a clear and compelling conflict of interest make us question whether efforts are focused on her personal business interests or the well-being of the American people.”

 

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Donald Trump

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Former President Donald Trump’s allies are reportedly becoming more apprehensive about defending him in wake of the Federal Bureau of Investigations' (FBI) latest search warrant executed at his Mar-a-Lago estate in Palm Beach, Florida.

On August 12, Washington Post reporter Josh Dawsey appeared on MSNBC where he weighed in on the latest development.

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  • 1.Why did Trump choose to hide certain specific files and not others at Mar-a-Lago? What were the criteria that Trump used to keep some files concealed and not others? Who selected those files? Did Trump consult or direct anyone in his selection of secret files? Trump was notorious for being too impatient to read his briefing papers, even after they had been drastically shortened and simplified. Is there the slightest evidence that he spirited these papers away so that he could consult or study them? Who besides Trump knew of the presence of the files he had concealed at Mar-a-Lago?
  • 2. Mar-a-Lago has an infamous reputation for being open to penetration even by foreign spies. In 2019, the FBI arrested a Chinese woman who had entered the property with electronic devices. She was convicted of trespassing, lying to the Secret Service, and sentenced and served eight-months in a federal prison, before being deported to China. Have other individuals with possible links to foreign intelligence operations been present at Mar-a-Lago?
  • 3. Did members of Trump's Secret Service detail have knowledge of his secret storage of the files at Mar-a-Lago? What was the relationship of the Secret Service detail to the FBI? Did the Secret Service, or any agent, disclose information about the files to the FBI?
  • 4. Trump's designated representatives to the National Archives are Kash Patel and John Solomon, co-conspirators in the investigations into Russian interference in the presidential election of 2016, the Ukraine missiles-for-political dirt scandal that led to the first impeachment in 2019, and the coup of 2020. Neither has any professional background in handling archival materials. Patel, a die-hard Trump loyalist whose last job in the administration was as chief of staff to the Acting Secretary of Defense, was supposedly involved in Trump’s “declassification” of some files. Patel has stated, “Trump declassified whole sets of materials in anticipation of leaving government that he thought the American public should have the right to read themselves."
  • The White House counsel failed to generate the paperwork to change the classification markings, but that doesn’t mean the information wasn’t declassified.” If Pat Cipollone, the White House legal counsel, did not “generate the paperwork,” was he or anyone on his staff aware at all of the declassifications? The White House Staff Secretary Derek Lyons resigned his post in December 2020. Did his successor, who held the position for a month, while Trump was consumed with plotting his coup, ever review the material found in Trump’s concealed files for declassification? Or did Patel review the material? Can Patel name any individual who properly reviewed the supposed declassification?
  • 5. Why did Trump keep his pardon of Roger Stone among his secret files? Was it somehow to maintain leverage over Stone? What would that leverage be? Would it involve Stone's role as a conduit with the Proud Boys and Oath Keepers during the coup? Or is there another pardon in Trump’s files for Stone, a secret pardon for his activities in the January 6th insurrection? Because of the sweeping nature of the pardon clause, pardons can remain undisclosed (until needed). Pardons are self-executing, require no justification and are not subject to court review beyond the fact of their timely execution. In other words, a court may verify the pardon was valid in time but has no power to review appropriateness. A pardon could even be oral but would need to be verifiable by a witness. Do the files contain secret pardons for Trump himself, members of his family, members of the Congress, and other co-conspirators?
  • 6.Was the FBI warrant obtained to block the imminent circulation or sale of information in the files to foreign powers? Does the affidavit of the informant at Mar-a-Lago, which has not been released, provide information about Trump’s monetization that required urgency in executing the warrant? Did Trump monetize information in any of the files? How? With whom? Any foreign power or entity? Was the Saudi payment from its sovereign wealth fund for the LIV Golf Tournament at Trump’s Bedminster Golf Club for a service that Trump rendered, an exchange of anything of value or information that was in the files? If it involved information in the files was it about nuclear programs? Was it about the nuclear program of Israel? How much exactly was the Saudi payment for the golf tournament? The Saudi sovereign wealth fund gave Jared Kushner and former Trump Secretary of the Treasury Steven Mnuchin $2 billion for their startup hedge fund, Affinity Partners. Do the Saudis regard that investment as partial payment for Trump’s transfer of nuclear information? Were Kushner or Mnuchin aware of the secret files at Mar-a-Lago?
  • 7.Did Trump destroy any of the files? If so, when? Did those files contain incriminating information? Did he destroy any files after he received the June subpoena?
  • 8.Were any of the secrets of our allies compromised? Has the U.S. government provided an inventory of breaches or potential breaches to our allies?
  • 9.Does the resort maintain a copying machine near the classified documents that Trump hid? Were any of the documents copied or scanned? Are Trump’s documents at Mar-a-Lago originals or copies? Were any copies shown or given to anyone?
  • 10.Trump’s lawyer Christina Bobb has revealed that a video surveillance system covers the places where Trump hid the files at Mar-a-Lago, and that the system is connected to a system at his other residences at the Bedminster Golf Club in New Jersey and Trump Tower in New York City. According to Bobb, Trump and members of his family observed the FBI search and seizure of his files at Mar-a-Lago, “actually able to see the whole thing” through their surveillance system. Who has that surveillance system recorded entering the rooms where the files were kept?
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