Regarding Wilbur Ross, Secretary of Commerce
Wilbur Ross, who has 45's ear, has been urging imposition of tariffs on imported Chinese goods. As I have noted, that is a very bad idea in the light of global economic history.
But it is not surprising to me that Wilbur Ross is blundering in the office of Secretary of Commerce. Here is the story of my encounter with Ross, when I was about 15 years into law practice, back in the early 1990s:
Around 1992 or 1993, I cross-examined Wilbur Ross, then a vulture investor who also hired himself out as a restructuring advisor, during a confirmation hearing held in Little Rock in a timeshare developer's Chapter 11 case.
The main debtor had a finance subsidiary that was the engine of the enterprise, and I represented the secured lenders to it. There was a thick tranche of subordinated bonds underneath our clients at the finance subsidiary level, which bonds were being wiped out under the plan; and the bondholders had listed Ross as their key witness in the hearing on confirmation.
On the second and final day of the hearing, a Friday morning, when the time came for the bondholders' lawyer to call his witness, he hemmed and hawed and finally got it out that Mr. Ross had been "unable to travel to Little Rock," due to his suffering “phlebitis,” which is a serious medical condition.
The judge, Robert Fussell, was sympathetic. The lawyer asked if the judge would please permit Mr. Ross to testify by telephone. Judge Fussell said he had never permitted such a thing in his court, but due to the seriousness of phlebitis, and since Ross was the bondholders' only witness, he would allow it. So the lawyer handed the courtroom deputy the telephone number to Ross's office in Manhattan. The deputy switched the call into the sound system so it was heard throughout the courtroom.
The receptionist advised that Ross was not in the office. The judge frowned and looked at the lawyer. So the lawyer intrepidly pulled out Ross's cell phone number for the courtroom deputy. The call was placed, and Ross answered.
Judge Fussell greeted him, “Good morning, Mr. Ross.” Ross answered but no one could make out what he said. Judge Fussell figured out that Ross was in a car, moving along some road, so he asked, “Where exactly are you Mr. Ross?” Ross replied, “We've just crossed the line into Connecticut. I'm heading to my place in the country.” Judge Fussell said, “Well, if it is okay with you, would you ask your driver to pull over so that we will have as clear a connection as possible.” After a couple of minutes, the driver accomplished that.
Judge Fussell continued, “I understand from the bondholders' counsel here in my courtroom that you have been unable to travel to Little Rock for this hearing because you suffer from phlebitis.”
Ross replied quizzically, “PHLEBITIS? No, I have NEVER had that.” He added: “But I DO HAVE some BURSITIS in my elbow.”
Judge Fussell looked directly at the bondholder’s lawyer, and stated acidly, “Counsel, you may proceed....” It went downhill rapidly for the bondholders’ lawyer. And in one of the better cross-examinations of my career, I nailed the coffin shut with questions that demonstrated that Ross didn't have a clue about that business and the capital structure of those debtors. The Plan confirmed easily.
And now Wilbur Ross is Commerce Secretary whispering into 45's ear that a trade war with China is a good thing and winnable....
-Josiah Daniel