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Tuesday, November 07, 2017

The Day Forbes Topples a Bogus Billionaire Cabinet Secretary?

In what may presage future developments, Forbes has dropped a bombshell of a story about how Wilbur Ross used "fake numbers" to "generate real assets."  In essence, Ross duped a Forbes reporter years ago into reporting the assets of a fund he managed as his personal assets.  According to Forbes, he kept adding to his fictitious wealth over time.  Although he recently contended to be worth about 3.7 billion, Forbes now pegs the actual number as closer to $700 million.

False beliefs about his wealth led to real returns.  Aided by the cachet and celebrity that came from being identified as a billionaire, Ross raised even more money for other funds.  The head of an Oregon pension plan described how Ross's asserted wealth led him to outsize expectations about Ross's competence:

Five other former employees add a more tangible reason: The more money Ross appeared to be worth, the more money investors seemed willing to give him. "Really, for us, it was a bet on him, " says Sam Green, who helped put $300 million into Ross' funds on behalf of the Oregon Public Employees Retirement Fund, citing his personal wealth as one factor. "I don't know of any better indicator of future success than having been successful in the past." Ross had seemed to figure out how to make fake numbers generate real assets.

In a normal administration, press reports revealing a history of sustained falsehoods would lead to the immediate resignation or firing of a cabinet secretary.  

Posted by Benjamin P. Edwards on November 7, 2017 at 04:56 PM | Permalink

Comments

Bombshell?

Editorialize much?

Posted by: YesterdayIKilledAMammoth | Nov 7, 2017 7:41:37 PM

Just reinforces the concept that the rich are different from the rest of us.

Posted by: Paul | Nov 7, 2017 9:15:51 PM

I wonder if you could provide examples from a normal administration where a cabinet secretary was fired due to reports of a history of sustained falsehoods. I know that the previous administration had a cabinet head who was held in contempt of Congress, I think for lying to it, yet was not fired.

Posted by: biff | Nov 7, 2017 10:56:17 PM

Biff:

I believe that you are referring to Eric Holder, who was held in contempt of Congress not for lying, but for refusing to comply with a subpoena, on the grounds of executive privilege. Hardly a similar situation.

Posted by: gdanning | Nov 8, 2017 11:10:35 AM

I think bombshell is fair. It exploded the myth that Wilbur Ross is a billionaire. The best public estimation of his wealth declined by over 80%.

Posted by: Ben Edwards | Nov 8, 2017 11:22:32 AM

Lying to the FBI is a crime. Lying to a journalist is something many businessmen and all politicians do. Forbes has frequently mentioned that people have lied to them about their net worth, although often trying to underplay it.

Posted by: PaulB | Nov 8, 2017 2:03:15 PM

@gdanning
I don't know if DNI is in the cabinet, but Clapper was a lying liar that lied to Congress.

Posted by: brad | Nov 8, 2017 9:31:52 PM

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