The Shady Russian Ties of Trump Commerce Secretary Wilbur Ross

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President Donald Trump’s new Commerce Secretary, Wilbur Ross, has long and complicated ties to Russian oligarchs through his investment and seat on the board of the Bank of Cyprus. The shady relationship has not yet been seriously vetted by the Trump White House or Senate Republicans despite increased calls for scrutiny over the Russian ties of the Trump campaign, his administration, and those he has tapped to serve on his team. As this document details: 

  • The Bank of Cyprus Might as Well Be Called the Bank of Russian Billionaires and Their Wealthy Friends. The Bank of Cyprus has major business operations in Russia and Ukraine. It has client representatives who are fluent in Russian. At least 50 percent of deposits in the Bank of Cyprus belonged to non-EU residents, and “much of the funds were suspected to belong to Russian oligarchs.” It does enough business with Russians that it told investors that economic sanctions would limit its financial dealings and expose the bank to risks related to sanctions against Russia and “certain Russian citizens and businesses.”
  • Commerce Nominee Ross Was Among Those Who Saved the Bank by Putting “a Majority” of Its Shares Into Foreign, Primarily Russian Hands. Ross Became Vice-chairman of the Bank… Alongside a Former KGB Agent. The Bank of Cyprus was saved by Wilbur Ross, and others through an “international rescue deal” that also put “a majority” of the Bank of Cyprus shares into the possession of foreigners, primarily, Russians. When the dust settled Russian oligarchs and their representatives were appointed to the Bank of Cyprus board of directors, as was Wilbur Ross, who became a vice chairman. Former KGB agent Vladimir Strzhalkovskiy became the other vice chairman. As such, Wilbur Ross “has close ties to Russian finance.” Being in this position at the Bank of Cyprus made “him a de facto business partner with Viktor F. Vekselberg,” who is known as “the oligarch’s oligarch.” Ross and Vekselberg’s representative have sat together on the nominations and corporate governance committee of the board.
  • Trump Sold a $95 Million Florida Mansion to a Russian Oligarch Who Ended up Being the Largest Shareholder of the Bank of Cyprus. Donald Trump sold a Florida mansion to Russian oligarch for $95 million. Soon thereafter the oligarch became the largest shareholder in the Bank of Cyprus.
  • Ross Has Praised Russia’s Putin and Opposed U.S. Policy, Favoring Russian Interests Instead. Wilbur Ross praised Vladimir Putin and thinks the United States should appease him by letting him annex part of Ukraine.

The Details:

The Bank of Cyprus has major business operations in Russia and Ukraine. It has client representatives who are fluent in Russian. About 50 percent of deposits in the Bank of Cyprus belonged to non-EU residents, and “much of the funds were suspected to belong to Russian oligarchs.” It does enough business with Russians that it told investors that economic sanctions would limit its financial dealings and expose the bank to risks related to sanctions against Russia and “certain Russian citizens and businesses.”

In 2016 the Bank of Cyprus had “representative offices” in Russia, Ukraine and China to market to foreign clients. The Bank of Cyprus Internet site promotes the fact that it has client representatives who are fluent in Russian. At one time, about 50 percent of deposits in the Bank of Cyprus belonged to non-EU residents, and “much of the funds were suspected to belong to Russian oligarchs.” [Bank of Cyprus, “Representative Offices,” Bank of Cyprus website, accessed 02/27/17; Landon Thomas, Jr., “In Cyprus Bailout, Questions of Whether Depositors Should Shoulder the Bill,” New York Times, 01/10/13, “Final ‘haircut’: Cyprus to levy deposits by 47.5 percent,” RT.com, 07/26/13, Maria Kiselyova, UPDATE 1-Bank of Cyprus to sell stake in Russia’s Uniastrum Bank, Reuters, 04/17/15, Bank of Cyprus Prospectus, 11/30/16, and Bank of Cyrus 2015 Annual Financial Report]

The European Union, in 2014, placed sanctions on Russian oligarchs, “which include a freeze on assets they own in the EU and a ban on traveling to the 28-member bloc.” [Matthew Dalton, “EU Places Sanctions on Russian Oligarchs,” The Wall Street Journal, 07/30/14]

A 2016 Bank of Cyprus prospectus for potential global investors noted that economic sanctions would limit its financial dealings and expose the bank to risks related to the EU’s economic sanctions against Russia and “certain Russian citizens and businesses.” [Bank of Cyprus Prospectus, 11/30/16]

The Bank of Cyprus was saved by Wilbur Ross, and others through an “international rescue deal,” that put “a majority” of the Bank of Cyprus shares into the possession of foreigners, primarily, Russians. When the dust settled, Wilbur Ross and former KGB agent Vladimir Strzhalkovskiy became the vice chairmen of the board of directors of Bank of Cyprus, along with the hand-picked representatives of Russian oligarchs. Being in this position made “him a de facto business partner” with Viktor F. Vekselberg,” “the oligarch’s oligarch,” with whom he served on the bank’s Nominations & Corporate Governance Committee.

The Bank of Cyprus was saved by an “international rescue deal” in 2013, and 2014 it raised €1 billion by selling shares to investors, including Wilbur Ross, who led a group that agreed to invest €400m. [Martin Arnold and Kerin Hope, “Bank of Cyprus to raise €1bn through share sale,” Financial Times, 07/28/14]

A 2013 “bail-in” also saved the Cypriot banking system by appropriating nearly 50 percent of deposits over €100,000 and converting them into capital to keep the Bank of Cyprus solvent. After the bail-in Russian investors filled the Bank of Cyprus board of directors, which is a clear indicator of how much influence Russians had on the Bank of Cyprus. When the dust settled six Russians were appointed to the 16-member Bank of Cyprus board of directors. [“Final ‘haircut’: Cyprus to levy deposits by 47.5 percent,” RT.com, 07/26/13, and Andreas Illmer, “Russia’s rich dominate Cyprus’ largest bank,” Deutsche Welle, 10/18/13]

The newly appointed members included Vladimir Strzhalkovsky, former CEO of mining conglomerate Norilsk Nickel, Igor Lozhevsky, Vice-President of the Deutsche Bank affiliate in Eastern Europe, Anzhelika Anshakova and Eriskhan Kurazov, representatives of investor Mikhail Shishkhanov, Anton Smetanin, a representative of investor Vitaly Yusufov, and Dmitry Chichikashvili, CEO of development concern Insigma. [Russkiy Mir Foundation, Russians Now Account for More Than One Third of Board of Bank of Cyprus, 11/09/13]

Wilbur Ross, “Chairman and Chief Strategy Officer” of the board of the Bank of Cyprus, was “elected as Vice Chairman” in November 2014. [press release, Wilbur Ross Elected As Vice Chairman Of Bank Of Cyprus,” WL Ross & Co. LLC , 11/21/16]

Former KGB agent Vladimir Strzhalkovskiy, who worked with Vladimir Putin in the 1980s, shared the vice chairman post with Ross until May 2015. Strzhalkovskiy was one of the most prominent Russians to gain a seat on the board when he became a shareholder after the 2013 bail-in. [“Vladimir Strzhalkovsky receives largest pay-off in Russian corporate history,” The Telegraph, 12/14/12, Maria Petrakis, “Davos-Man Ackermann Lured to Cyprus Bank by Billionaires,” Bloomberg, 11/10/14, and Bank of Cyprus Announcement, Resignation of Board Member – Changes in the Composition of the Board of Directors and Board Committees, 05/29/15]

Wilbur Ross, as the vice chairman of the Bank of Cyprus, “has close ties to Russian finance.”

In fact, his “investment in the bank…makes him a de facto business partner with Viktor F. Vekselberg, one of Russia’s most prominent businesspeople and a man with ties to the Kremlin.” [Matthew Goldstein, “‘Vulture’ or ‘Phoenix’? Wilbur Ross, Risk-Taker, Is Eyed for Commerce Post,” The New York Times, 11/25/16, and Pedro Nicolaci da Costa, “A Billionaire to Help the Working Man?U.S. News & World Report, 12/01/16]

Viktor Vekselberg is not just “a Russian oligarch.” He is “the oligarchs’ oligarch.” He owns a large stake in the Bank of Cyprus through a subsidiary of his conglomerate Renova Group, which gradually increased its share overtime to 9.88% by March 2016. [Stephen Smith, “Viktor Vekselberg: Tracking Down Russia’s secret billionaire,” “Annual Financial Report,” Bank of Cyprus, 2015, and Collin Eaton, “Russian oligarch owns big stakes in Dresser-Rand, potential Swiss buyer,” Houston Chronicle, 09/19/14]

Canadian oil company Norex Petroleum alleged that in 2001 Viktor Vekselberg and his business partner sent a militia armed with AK-47s to take over Yugraneft, which is an oilfield in Siberia worth $500 million. After the heavily-armed soldiers overran the corporate office building, Vekselberg and his business partner “bribed Russian officials to influence a lawsuit in that country that sought to reduce Norex’s…stake in Yugraneft.” [Stephen Smith, “Viktor Vekselberg: Tracking Down Russia’s secret billionaire,” Esquire, 08/03/13, Chris Dolmetsch, “Norex Petroleum Asks N.Y. Court to Reinstate Blavatnik Suit,” Bloomberg, 05/06/14, and Matthew Goldstein, “‘Vulture’ or ‘Phoenix’? Wilbur Ross, Risk-Taker, Is Eyed for Commerce Post,” The New York Times, 11/25/16]

Vekselberg’s representative to the board is Maksim Goldman. Goldman and Ross have sat together on the Nominations & Corporate Governance Committee, which is responsible for making recommendations to the board to ensure that bank “arrangements are consistent with best practice corporate governance standards and practices in place.” [Adam Behsudi, “Lighthizer announcement imminent?,” Politico, 12/20/16, Stelios Orphanides, “THE BANK OF CYPRUS’s Wilbur Ross: Don’t mess it up like Greece,” Cyprus Business Mail, 10/13/15, “Annual Financial Report,” Bank of Cyprus, 2015,, and Bank of Cyprus Nominations & Corporate Governance Committee]

Goldman has worked for Vekselberg-affiliated companies since at least 2005. Currently he is the Director of Strategic Projects for Renova Group, and worked for the Vekselberg-founded SUAL Holding. Goldman played a “meaningful role” in the creation of RUSAL from assets including SUAL Holding, where he now works as a “Non-executive Director.” [Renova Archived Bio and RUSAL bio]

Former Deutsche Bank CEO Josef Ackermann was elected to the Bank of Cyprus board at the same time as Ross. Ross then nominated Ackermann for chairman, with Vekselberg’s full support, unsurprising given that Ackermann sat on Vekselberg’s Renova Management AG Board of Directors since February 2014. [Bank of Cyprus Announcement, 11/20/14, Maria Petrakis, “Davos-Man Ackermann Lured to Cyprus Bank by Billionaires,” Bloomberg, 11/10/14, Josef Ackermann Renova Bio, Martin Arnold, “Josef Ackermann to join Bank of Cyprus board,” Financial Times, 10/6/14]

After Deutsche Bank, Ackermann was the part-time chairman of Zurich Insurance, a stint that “ended badly” when his chief financial officer committed suicide and left a note that blamed Ackermann for “his despair.” Ackermann was cleared by Swiss authorities, but he resigned the position anyway. [Jack Ewing, “A Banker Sees His Role in Cyprus as a Chance to Give Back,” New York Times, 10/26/15]

Donald Trump sold a Florida mansion to Russian oligarch for $95 million whom he claimed he never met. The oligarch, who never lived in the home, soon thereafter became the largest shareholder in the Bank of Cyprus.

In 2008 Donald Trump sold a Florida mansion to Russian oligarch Dmitry E. Rybolovlev for $95 million. Rybolovlev never lived in the house, has denied owning it, and has attempted to tear it down after claiming the home was uninhabitable. Trump claims he has never met Rybolovlev. [Jose Pagliery, “That time a Russian billionaire paid Trump $95 million for a mansion,” CNN Money, 07/27/16, and Michael Crowley, “Trump and the oligarch,” Politico, 07/29/16]

Dmitry E. Rybolovlev, in 2010, purchased a 9.7 percent stake in the Bank of Cyprus through a trust in the name of his daughters Anna and Ekaterina, which made him the largest shareholder in the bank. However, in the 2013 “bail-in” Rybolovlev lost a significant portion of his investments and deposits in the Bank of Cyprus, and was denied representation on the board. [Andrew E. Kramer, “Wealthy Russians Ensnared as Cyprus Crisis Deepens,” New York Times, 03/22/13, Bank of Cyprus 2012 Annual Financial Report, and Andreas Neocleous “Cyprus: Everyone Has Lost; The Bank Of Cyprus Has Led The Way,” Mondaq, 06/04/13]

In 1996, Rybovlev was jailed for nearly a year following accusations he plotted the murder of a rival business associate. He was later acquitted of the charge, though Rybolovlev claimed he was extorted into selling shares of his company in exchange for his freedom.  [Michael Crowley, “Trump and the oligarch,” Politico, 07/29/16]

Wilbur Ross praised Vladimir Putin and thinks the United States should appease him by letting him annex part of Ukraine.

Wilbur Ross has praised Vladimir Putin, who he described as being “wildly popular with the Russian population.” Ross thinks Putin is not “going to give up Crimea.” Ross said, “I do believe that there’s a high probability that he stops there. I don’t think this is the beginning of annexation of all the former USSR entities. So I think if we can find a way to give him something of what he needs in Crimea then we can have stability there.” [Bloomberg TV, 12/17/14, and Fox Business Network’s Mornings With Maria, 09/08/16]

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