Sun Sentinel Palm Beach Edition
Dems blister Trump pick for Treasury
Critics say he profited from foreclosures
WASHINGTON — Steven Mnuchin, the Wall Street executive tapped by President-elect Donald Trump to be the next treasury secretary, faced some of the most blistering personal attacks of any Cabinet pick so far as Democrats accused him of foreclosing on the homes of thousands of struggling Americans while head of a Southern California bank, even as he helped rich hedge fund clients shelter their wealth offshore.
Mnuchin was on the defensive during a more than five-hour confirmation hearing Thursday at which it was also revealed he initially had failed to disclose $95 million in real estate holdings and his position as director of a corporation in the Cayman Islands, a well-known tax haven.
Democrats questioned how Mnuchin could be expected to crack down on tax-avoidance schemes he helped clients use in the past. They also pressed him to ensure that Trump’s foreign investments didn’t compromise U.S. national security. Mnuchin said he would look into Trump’s foreign debt.
The 54-year-old hedge fund manager and former Hollywood movie producer had barely settled into his seat at the Senate Finance Committee when the panel’s top Democrat, Sen. Ron Wyden of Oregon, launched a nearly 15-minute fusillade of criticism.
A major target throughout the hearing was Mnuchin’s tenure as head of OneWest Bank, which Wyden said “churned out foreclosures like Chinese factories churned out Trump suits and ties.”
Wyden’s opening statement was so aggressive that Sen. Pat Roberts, R-Kan., told Wyden, “I’ve got a Valium pill you might want to take before the second round.”
The comment, delivered humorlessly, sparked objections from Wyden and Sen. Sherrod Brown, D-Ohio. The exchange demonstrated the deep partisan divide over one of Trump’s most controversial Cabinet picks.
Republicans rallied to Mnuchin’s defense, and there’s no indication his confirmation is in jeopardy.
If confirmed, Mnuchin would become a pivotal player in the Trump administration on the economy, trade, taxes, entitlements, housing policy, financial regulation and relations with China and other global economic powers.
Mnuchin offered few policy details but was clear that producing economic growth of about 3 percent to 4 percent annually — significantly stronger than in recent years — was his main objective, and that cutting corporate taxes was the key.
“Our No. 1 priority from my standpoint is economic growth,” Mnuchin said. “I believe tax reform will be the first and most important part of that.”
He also told lawmakers that he supports current economic sanctions against Russia and would support hiring more Internal Revenue Service workers in order to help boost government revenue.
Mnuchin opened his testimony with a strong defense against charges leveled in recent days that OneWest, which he ran from 2009 to 2015, was a “foreclosure machine.”
“Since I was first nominated … I have been maligned as taking advantage of others’ hardships in order to earn a buck,” Mnuchin said. “Nothing could be further from the truth.”
Mnuchin said OneWest tried to help homeowners avoid foreclosure but often was limited by federal regulations.
“My experience confirmed that we must identify and eliminate unwise and burdensome policies which contribute to the disastrous outcomes that came in the wake of the financial crisis,” Mnuchin said.
Mnuchin, a multimillionaire, has been criticized because of his long career at Goldman Sachs and his role in dealing with the mortgages held by failed subprime giant IndyMac Bank.
He is one of the top targets of Senate Democrats among Trump’s Cabinet picks. In hopes of derailing his nomination, Democrats and activists are focusing on OneWest’s foreclosures.
In 2009, Mnuchin and other investors put up nearly $1.6 billion to buy IndyMac and renamed it OneWest. They sold the bank to CIT Group in 2015 for $3.4 billion.
Democrats and housing advocates have dubbed Mnuchin “the foreclosure king” for what they said was the bank’s aggressive practices.
They accused him of profiting from the 2008 financial crisis that left many homeowners unable to make their mortgage payments.
Mnuchin critics point to a 2011 regulatory order from the federal Office of Thrift Supervision that OneWest failed to follow procedures when foreclosing on homeowners.