11.20.17

Citing Potential Ethics Concerns, Murray Calls for Scrutiny into DeVos Investments in Offshore Accounts

Secretary DeVos, among other cabinet members, has investments in offshore accounts based in countries recognized as “tax havens”

 

Paradise Papers reveal Secretary of Commerce Wilbur Ross’ offshore investments connect to Putin’s family and Russian nationals

 

In letter, Senator Murray asks Department of Education ethics office to ensure Secretary DeVos’ investments do not violate ethics rules

 

(Washington, D.C.) – Senator Patty Murray (D-WA), Ranking Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, today sent a letter to Department of Education Designated Agency Ethics Official to express her concern regarding reports that members of the Trump Administration have investments in offshore tax shelters. Senator Murray asked the Department for information regarding Secretary DeVos’ offshore investments to ensure she is abiding by the ethics statutes, rules, and pledges required of cabinet officials.

 

“Over the past year, this Administration has repeatedly demonstrated the need for robust financial disclosure: people across the country deserve to know that Cabinet Secretaries are putting the public interest ahead of their own financial interests,” said Senator Murray.

 

On November 5, 2017, the International Consortium of Investigative Journalists published over 13 million documents that detail the construction and use of offshore investment vehicles to try to avoid a higher tax burden. The documents showed that Secretary of Commerce Wilbur Ross retains an interest in a number of offshore entities that pose significant conflicts of interest and are closely linked to Russian nationals currently sanctioned by the Department of the Treasury. These ties were not disclosed during Ross confirmation process. The revelations have called into question if other members of the Trump Administration may have conflicting overseas financial ties.

 

Full text of the letter below and PDF can be found HERE.

 

 

November 20, 2017

 

Marcella Goodridge-Keiller

Designated Agency Ethics Official

U.S. Department of Education

400 Maryland Avenue, SW

Room 6E225

Washington, DC 20202

 

Dear Ms. Goodridge-Keiller:

 

I write regarding the Department’s conflict of interest and ethics compliance review processes in light of recent revelations surrounding the use of offshore tax shelters by high-net-worth members of the Administration. Over the past year, this Administration has repeatedly demonstrated the need for robust financial disclosure: people across the country deserve to know that Cabinet Secretaries are putting the public interest ahead of their own financial interests.

 

As you are aware, on November 5, 2017, the International Consortium of Investigative Journalists (ICIJ) published over 13 million documents that detail the construction and use of offshore investment vehicles (“the Paradise Papers”) by entities seeking to reduce their tax exposure. Among the 120,000 individuals, organizations, and corporations linked to these papers were senior officials within the Trump Administration, including White House National Economic Council Director Gary Cohn and Secretary of State Rex Tillerson.[1] While use of these vehicles is not illegal or necessarily in violation of specific ethics rules and pledges, I am deeply concerned by the challenge they pose to the Federal Government’s broader ethics program.

 

Secretary of Commerce Wilbur Ross’ finances provide a salient example of this challenge. As revealed by the Paradise Papers, Secretary Ross retains an interest in a number of offshore entities that pose significant conflicts of interest and that are closely linked to Russian nationals currently sanctioned by the Department of the Treasury.[2] Given that they were largely masked behind offshore investment vehicles, these connections received minimal scrutiny over the course of Secretary Ross’ confirmation. The public has a substantial interest in fully understanding the nature of and potential conflicts associated with Secretary Ross’ financial holdings, especially considering Russia’s well-documented efforts to influence the 2016 Presidential Election. As Richard W. Painter, who served as chief ethics lawyer for President George W. Bush, noted, we should be greatly concerned with senior Administration officials profiting off ethically questionable dealings with Russian nationals.[3] 

 

As disclosed in her original Office of Government Ethics Form 278e[4] and May 18, 2017 Form 278-T[5] filings, Secretary DeVos has retained investments in offshore investment vehicles based in countries recognized as “tax havens.” With the concerns raised by the use of these investment vehicles by other members of the Administration, I ask that you clarify the following questions regarding your administration of the federal ethics program:

 

  • How do you, in your capacity as the Designated Agency Ethics Official (DAEO), evaluate offshore investment vehicles, especially those based in jurisdictions recognized as “tax havens,” including Jersey, the Isle of Man, Bermuda, the British Virgin Islands, and others?
  • How do you, in your capacity as the DAEO, reconcile obscured offshore investment vehicles with existing ethics statutes, rules, and pledges?
  • What course of action would you take, in your capacity as the DAEO, should a member of the Department use offshore investment vehicles to effectively circumvent existing ethics statutes, rules, and pledges?

 

Thank you in advance for your prompt attention to this matter. If you have any questions, or would like to further discuss this inquiry, please contact Carly Rush, Senate Health, Education, Labor, and Pensions Committee Deputy General Counsel at (202) 224-6403.

 

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[1] "Explore: US president Donald Trump and his 12 allies in the Paradise Papers." Paradise Papers. November 5, 2017. Accessed November 13, 2017. https://www.icij.org/investigations/paradise-papers/us-president-donald-trumps-influencers/.

[2] Chavkin, Sasha, and Martha M. Hamilton. "Commerce Secretary Wilbur Ross Benefits from Business Ties to Putin's Inner Circle." Paradise Papers. November 5, 2017. Accessed November 13, 2017. https://www.icij.org/investigations/paradise-papers/donald-trumps-commerce-secretary-wilbur-ross-and-his-russian-business-ties/

[3] Mike Mcintire, Sasha Chavkin And Martha M. Hamilton. "Commerce Secretary’s Offshore Ties to Putin ‘Cronies’." The New York Times. November 05, 2017. Accessed November 13, 2017. https://www.nytimes.com/2017/11/05/world/wilbur-ross-russia.html?_r=0.

[4] DeVos, Elisabeth P. "Executive Branch Personnel Public Financial Disclosure Report (OGE Form 278e)." January 19, 2017. Accessed November 13, 2017. https://extapps2.oge.gov/201/Presiden.nsf/PAS Index/E554507378A61BDF852580AE002C70E1/$FILE/DeVos,%20Elisabeth%20P.%20%20final278.pdf.

[5] DeVos, Elisabeth P. "Executive Branch Personnel Public Financial Disclosure Report: Periodic Transaction Report (OGE Form 278-T)." May 18, 2017. Accessed November 13, 2017. https://extapps2.oge.gov/201/Presiden.nsf/PAS Index/FEBCD192842A975C852581250026EC9C/$FILE/Elizabeth-P-DeVos-04.28.2017-278T.pdf.