Friday, August 10, 2018

'The Grifters' redux

The Insiders

We learn from 538’s significant digits email over the last couple of mornings about goings on in DC (District of Crooks).

$570,900 in avoided losses
Christopher Collins, a Republican Congressman from New York, was arrested yesterday and charged with insider trading. According to the indictment, he learned a drug trial had failed thanks to his position on a biotech company board. He is said to have traded on the information, avoiding $570,900 in losses, while his son and another defendant did the same, avoiding $768,000 in losses. “We are confident he will be completely vindicated and exonerated,” Collins’s attorneys said. [AP]

Of course, they said that. Lawyers are paid to say such things. It does not mean that they are correct. In this case, quite the contrary.

What does a scandal cost a politician? 538 has the answer.

9-point scandals
In light of the arrest of Chris Collins, the Republican U.S. House member from New York, on charges of insider trading, my colleague Nate Silver looked into how much “scandals” hurt incumbents running for re-election. Quite a bit, it turns out. Since 1998, “scandal-plagued” incumbents won re-election by an average of 21.5 points, but this was compared to a projected margin of victory of 30.5 points. Scandals, therefore, cost about 9 points. [FiveThirtyEight]

The Grifters

In related news, Commerce Secretary Wilbur Ross has been signed as the star of a remake of the 1990 movie The Grifters. Aw, OK. Not really. But Dan Alexander at Forbes reports on how New Details About Wilbur Ross’ Business Point To Pattern Of Grifting. Here are tidbits.

… Over several months, in speaking with 21 people who know Ross, Forbes uncovered a pattern: Many of those who worked directly with him claim that Ross wrongly siphoned or outright stole a few million here and a few million there, huge amounts for most but not necessarily for the commerce secretary. At least if you consider them individually. But all told, these allegations—which sparked lawsuits, reimbursements and an SEC fine—come to more than $120 million. If even half of the accusations are legitimate, the current United States secretary of commerce could rank among the biggest grifters in American history.

Those who’ve done business with Ross generally tell a consistent story, of a man obsessed with money and untethered to facts. “He’ll push the edge of truthfulness and use whatever power he has to grab assets,” says New York financier Asher Edelman. One of Ross’ former colleagues is more direct: “He’s a pathological liar.”

In addition to a common disregard for the truth:

… his billionaire status was not lost on another person obsessed with his net worth. Donald Trump termed Ross a “legendary Wall Street genius” and named him to his cabinet. “In these particular positions,” Trump explained to a crowd of supporters, “I just don’t want a poor person.”

In a presidential cabinet plagued by ethical problems, it can be easy to forget about Wilbur Ross. Most of the attention tends to center around obvious abuses, like Scott Pruitt getting a $43,000 sound-proof booth in his office or Tom Price wasting $341,000 on jet travel. But while Ross’ antics are more complicated, they involve far more money.

On November 1, 2017, Ross signed a sworn document, attesting that he had divested all the assets he promised he would. That was not true. The commerce secretary in fact still owned somewhere between $10 and $50 million worth of stock in WL Ross’ parent company, Invesco. Ross sold his shares a month later, banking at least $1.2 million more than he would have if he sold in May, when he initially promised to divest. By falsely claiming he gotten rid of the shares earlier, Ross also put himself in legal jeopardy, since it is a crime to lie to federal officials. Representatives for Ross, a sophisticated investor, claimed the commerce secretary did not lie but instead failed to realize he owned the shares.

Sure he did. A remake of The Grifters would be fun to watch.

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