A massive leak of financial documents indicates that U.S. Commerce Secretary Wilbur Ross has an investment in a shipping firm that has links to a company controlled by associates of Russian President Vladimir Putin.
Dubbed the Paradise Papers, the documents released on November 5 by the International Consortium of Investigative Journalists (ICIJ) also showed that state-controlled Russian giants Gazprom and VTB Bank made large investments in U.S. tech firms.
Among other things, leaked papers also revealed that Britain's Queen Elizabeth II has some $13 million in investments in offshore portfolios.
The U.S.-based ICIJ was behind the release of the so-called Panama Papers in 2016, in which documents from a Panama-based law firm revealed detailed information on offshore accounts of many world leaders and wealthy individuals.
The Paradise Papers material came from two offshore service providers and the company registries of 19 tax havens. It was obtained by the German newspaper Sueddeutsche Zeitung and shared by the ICIJ with partners including The Guardian, the BBC, The New York Times, and dozens of other news agencies that analyzed the information.
The documents were shared with multiple news outlets because of the high volume of information involved in what was called Project Paradise.
Ross and Queen Elizabeth were the biggest names involved in examinations of the first batch of the 13.4 million files. There was no indication either person's activities were illegal, although Ross's connections to Russian interests could increase the scrutiny that the administration of U.S. President Donald Trump is already facing and lead to questions about conflicts of interest.
Potential links between Trump associates and Russia have come under scrutiny amid multiple U.S. investigations into Moscow's alleged interference in the 2016 U.S. presidential election and the question of whether associates of Trump may have colluded with Russia. The U.S. president denies there was any collusion and has called the probes a "witch hunt."
Complex Web Of Companies
The documents indicate Ross, a billionaire investor, maintained ties after taking office with a shipping company that has links to associates of Putin.
Ross, 79, once had a large stake in Navigator Holdings, a shipping company that transports gas for Russian energy firm Sibur.
Sibur is partially owned by Gennady Timchenko, a friend of Putin's who is under U.S. sanctions over Russian aggression in Ukraine, and by Putin's son-in-law, Kirill Shamalov, the New York Times reported.
INFOGRAPHIC: Taking A Look At The Leaks (click to view)
Ross's private equity firm has been the biggest shareholder in Navigator.
His personal share of the firm's stake was reduced when he took office in February, although his U.S. government filings show his holdings are still valued at $2 million to $10 million.
The New York Times reported that Ross's stake in Navigator has been held by a complex web of companies in the Cayman Islands.
James Rockas, a Commerce Department spokesman, said Ross "was not involved with Navigator's decision to engage in business with Sibur, a publicly traded company, which was not under sanction at the time and is not currently."
"Moreover, Secretary Ross has never met the Sibur shareholders referenced in this story and, until now, did not know of their relationship," he added.
According to a BBC journalist who interviewed Ross, the U.S. commerce secretary said there was nothing improper about his investments in Sibur.
"The fact that [Sibur] happens to be called a Russian company does not mean there's any evil in it," the journalist said on Twitter on November 6, reporting the content of the interview.
Russian Social Media Investments
In another revelation involving Russia, the ICIJ said the documents show that Yuri Milner, a Russian citizen who is a large investor in Silicon Valley tech companies, got $191 million from the state-controlled VTB Bank and invested the money in Twitter. The New York Times reported that the backing of VTB, which Russia often uses for "politically strategic deals," was "obscured by a maze of offshore shell companies."
The documents also show that a financial subsidiary of Gazprom, the state-controlled Russian natural-gas giant, funded a shell company that invested in a company that was affiliated with Milner and held roughly $1 billion in Facebook shares shortly before Facebook's 2012 initial public offering.
Milner told the ICIJ that he was unaware of any involvement by Gazprom subsidiary Gazprom Investholding in any of his deals.
Russian-backed fake-news stories and divisive political ads placed on Facebook, Twitter and other social networks have become a major focus of the U.S. probes into what U.S. intelligence officials have said was a campaign ordered by President Vladimir Putin in an effort to undermine faith in the U.S. electoral system, denigrate Democratic 2016 presidential candidate Hillary Clinton, and help Trump.
There has been no suggestion that Milner or his companies had any connection to the alleged Russian election interference, and Milner has said his investments are never related to politics.
The ICIJ also said that Milner more recently invested $850,000 in Cadre, a real estate fund that was co-founded by Trump's son-in-law and adviser Jared Kushner, according to the Paradise Papers. Milner told the ICIJ that he used his own money for the investment.
Also, according to the BBC, the documents also show that Kremlin-connected tycoon Alisher Usmanov may have a secret stake in a company responsible for making anti-money-laundering due diligence on companies it administers.
The BBC reported that Usmanov is a client of Bridgewaters and said that it would constitute a conflict of interest if he also owns a stake. Usmanov and Bridgewaters "strongly deny" that the Russian owns or controls the company, the BBC reported.
Meanwhile, the papers indicate that millions of dollars of Queen Elizabeth's private funds were invested into funds in the Cayman Islands and Bermuda by the Duchy of Lancaster, which provides her with an income and handles investments for her $650 million private estate.
Analysts said that, while there did not appear to be anything illegal with the investment activity and no indication that she avoided taxes, the Queen could face criticism for investing offshore instead of within Britain.
