Water | Energy | Politics | Environment

Trump's Billionaire Pick For Commerce, Oceans Chief Is Keeping His Oil Tankers


A docked oil tanker. The Oil Pollution Act of 1990 gave ship owners 25 years to phase out their single-hull tankers. That deadline arrives on Jan. 1, 2015.

A docked oil tanker. The Oil Pollution Act of 1990 gave ship owners 25 years to phase out their single-hull tankers. That deadline arrives on Jan. 1, 2015.

Flickr/Cavalier92

If there’s one thing that’s clear from Wilbur Ross’s financial disclosure forms, it’s that the billionaire nominee for secretary of commerce lives in a world most Americans can only fantasize about.

His many holdings include at least $150 million in cash accounts. He has a collection of art worth somewhere north of $50 million. How far north, we don’t know: $50 million is the highest category in the federal government’s disclosure forms. (Forbes magazine said a few years ago that Ross’s art collection was worth three times that much. He likes to collect Magrittes.)

Bloomberg.com estimates Ross’s net worth at $2.9 billion.

His namesake firm, W.L. Ross and Co., also has a major stake in Diamond S Shipping‘s fleet of 12 crude-oil tankers and 33 refined-product tankers. While the crude-oil vessels Ross co-owns are too large to enter Puget Sound, several of his tankers make port calls in Puget Sound and sail through Washington state waters as they carry Canadian petroleum products from refineries in Vancouver, British Columbia.

Ross has told U.S. ethics officials that he will sell off more than 80 assets if he gets the Commerce job. He’d also resign from dozens of corporate and nonprofits boards to avoid conflicts of interest.

But he has also told ethics officials and Sen. Maria Cantwell (D-Washington) he will not divest his stake in 11 other assets, including Diamond S Shipping, despite the role the U.S. Department of Commerce plays in regulating shipping and its impacts.

Where orcas and oil tankers meet

When orcas swim by the west coast of San Juan Island, underwater microphones pick up their calls.

Jane Cogan often listens to those hydrophones

They tell her when to go out on her deck and look for whales. She is a citizen scientist, often volunteering to help the island’s Center for Whale Research monitor the endangered population of killer whales that spend much of their time in the San Juans.

“We have whales here almost every day of the year,” Cogan said last week from her home overlooking Haro Strait and the invisible, watery boundary with Canada. “Most, if not all, of J and K pods went by going north today.”

She estimated she saw close to 45 whales on Thursday, or more than half the state’s entire resident population of 78 orcas.

Cogan also gets to see and hear oil tankers in the same waters.

“We see a few a month,” she said. “There are cargo ships coming through on a daily basis.”

Haro Strait is where international trade and endangered species, two of the responsibilities of the Commerce Department, bump up against each other almost every day. And the competing interests of the man slated to take the helm of that department stand in clear relief.

Cogan said she’s concerned about increasing tanker traffic as more oil from Alberta’s tar sands finds its way to market through U.S. waters. Activists predict a seven-fold increase in tanker traffic in our region once Kinder Morgan’s Trans Mountain pipeline to Vancouver, approved by Canadian Prime Minister Justin Trudeau in November, begins carrying Alberta oil.

“How do we make sure the whales are protected from an oil spill?” Cogan asked.

Last week, an unusual ship chugged up Haro Strait’s American side on its way to Vancouver.

What makes that oil tanker, the High Mercury, unusual is one of its owners: Wilbur Ross. While the tanker is registered in Hong Kong, Connecticut-based Diamond S Shipping owns it.

Very soon, Ross could be in charge of the rules that oil tankers and orcas have to live with in these waters.

The tanker High Mercury's Feb. 15 route through waters bordering the U.S. and Canada.

The tanker High Mercury's Feb. 15 route through waters bordering the U.S. and Canada.

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Sen. Cantwell challenges, then supports Ross

To be considered for a cabinet post, nominees have to disclose their financial ties, file an ethics agreement and face Senate hearings.

“Your ethics documentation is not requiring you to divest of your Diamond Shipping Company, which operates 33 tanker vessels and transports petroleum products of $1.2 billion,” Sen. Cantwell said to Ross at his Senate confirmation hearing last month. “Is that correct, you’re not divesting of that?”

“That is correct,” Ross replied. “The research we’ve done suggests there has never been a shipping case come before the Department of Commerce. And in our case, the vessels are the most environmentally up-to-date vessels that you’re going to find on the water.”

Sen. Cantwell was not satisfied with that answer.

“There are many, many, many, many aspects to your new job that will be about the regulation of this industry,” she said.

One of the main branches of the Commerce Department is the National Oceanic and Atmospheric Administration. Among other things, NOAA determines how much polluters have to pay when they spill oil. The agency does research and planning on spills and conducts damage assessments to quantify how much the parties responsible for an oil spill should pay for it.

“The responsible party has to pay clean-up costs,” said Fred Felleman, a Seattle Port commissioner and Friends of the Earth consultant. “Saying how many ducks died, how much it will cost to restore duck populations — that’s really where the big-buck decisions come.”

“The folks that are making those determinations should not be potentially responsible parties,” Felleman said.

NOAA is also responsible for protecting marine mammals like orcas under the Marine Mammal Protection Act and the Endangered Species Act. The agency lists a major oil spill as one of the greatest extinction threats for Puget Sound orcas.

At his hearing, Ross told Cantwell he would no longer be involved in operating his shipping business and he would step aside from his Commerce duties in any gray areas.

“I intend to be quite scrupulous about recusal in any topic where there’s the slightest scintilla of doubt,” Ross said.

In follow-up written questions first obtained by the Wall Street Journal and subsequently by KUOW, Cantwell asked Ross which of a long list of oil-shipping issues he would recuse himself from. She wrote that Ross’s ownership of Diamond S Shipping “clearly presents a conflict of interest between your potential role as secretary and your role [as] investor in the shipping industry.”  

Ross replied that most decisions on oil pollution are handled by the NOAA Administrator or staffers within NOAA, not the Secretary of Commerce.

The NOAA Administrator reports to the Secretary of Commerce.

Ross said he’d only recuse himself “in the unlikely event that a matter involving a vessel associated with Diamond S. Shipping Group should arise.” For any other oil-related concerns, even major disasters like the Exxon Valdez or Deepwater Horizon, “it would be my duty as secretary to provide the public and the President the benefit of my experience,” Ross wrote.

That answer apparently satisfied Cantwell enough for her to join the rest of the Senate Commerce Committee the next day in unanimously approving Ross’s nomination for the full Senate to vote on.

Through their spokespeople, Cantwell and Ross declined to be interviewed for this story.

If Ross is confirmed, he will replace another billionaire Commerce Secretary, Obama appointee and Hyatt Hotels heiress Penny Pritzker. To become a cabinet official in 2013, she resigned her position on the board of Hyatt Hotels and agreed to sell more than 200 investment assets but did not sell her multimillion-dollar stake in the family-held hotel chain.

Long-time oil spill activist Fred Felleman has more than a scintilla of doubt about Ross.  

“There would certainly be plenty of room for a conflict of interest for a tanker owner to be heading up NOAA,” Felleman said. “There’s no question about that.”

Whether or not a Diamond S tanker has a spill, Ross could profit by decisions he makes or influences at NOAA that affect the shipping industry. Felleman said his big concern is the possible mushrooming of tanker traffic with the newly approved Kinder Morgan pipeline.

“We’re looking at a Canadian project filling our waters with these tankers and [us] potentially not being able to rise to the occasion because of the Trump administration,” Felleman said.

A final confirmation vote for Wilbur Ross is scheduled for Feb. 27, the same day that his High Mercury tanker is scheduled to complete its latest journey: from Vancouver, past the San Juan Islands, out the Strait of Juan de Fuca and down to Manzanillo, Mexico, with a load of Canadian petroleum products.

A group of orcas and the cargo ship Star Minerva in Haro Strait, with Saturna Island, B.C., in the background, on Feb. 16.

A group of orcas and the cargo ship Star Minerva in Haro Strait, with Saturna Island, B.C., in the background, on Feb. 16.

Courtesy Jane Cogan

John Ryan loves getting story tips. He can be reached at jryan@kuow.org or with the encrypted WhatsApp or Signal apps at 1-401-405-1206 (whistleblowers, never do so from a work device, account or location). Snail mail is also a secure way to reach him confidentially: KUOW, 4518 University Way NE #310, Seattle, WA 98105. Don’t put your return address on the outside.   

 

 

 

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