Treasury pick Mnuchin takes risks
Ex- Wall Street banker has record of hits and misses
From buying a failed bank during the U. S. financial crisis to producing major movies and serving as national finance chairman for Donald Trump’s presidential campaign, Steven Mnuchin has a record of winning risky bets.
Now the former Wall Street banker is poised for what could be his biggest challenge yet: Trump’s nominee for U. S. Treasury secretary.
Trump is expected to name Mnuchin, 53, as his choice for the nation’s top financial policy job as soon as Wednesday, a source close to Trump’s transition team told USA TODAY on Tuesday. The person spoke on condition of anonymity because officials were not authorized to speak publicly about selections.
To associates and friends who were surprised when he accepted Trump’s invitation to serve as lead campaign fundraiser after the New York presidential primary, Mnuchin offered a potentially prescient explanation.
“Nobody’s going to be like, ‘ Well, why did he do this?’ if I end up in the administration,” he told Bloomberg Businessweek.
The news that Mnuchin is Trump’s pick came as reports swirled that Trump would nominate billionaire Wilbur Ross, also considered a risk taker, to serve as Commerce secretary. Ross, 79, made a career out of buying ailing companies in sometimes troubled sectors on the cheap, restructuring them and then selling them for billions of dollars. Ross, too, could be announced as early as Wednesday, the source close to the transition team said.
Trump has praised Mnuchin, who with the Republican National Committee helped raise tens of millions of dollars for the billionaire businessman’s campaign. However, they weren’t always the best of friends.
In a 2008 lawsuit, Trump targeted one of Mnuchin’s companies in a lawsuit that alleged Deutsche Bank and others improperly balked at extending multimilliondollar construction loans on the Trump International Hotel and Tower in Chicago. The case was settled.
Mnuchin, a twice- married father of three, is a Yale graduate who followed his father to renowned U. S. investment bank Goldman Sachs. He spent 17 years there, amassing a fortune and becoming an executive vice president of the New York City- based company before his 2003 departure.
His next stop was ESL International, the hedge fund founded by Edward Lampert, one of Mnuchin’s Yale roommates and another Goldman alumnus who now is the CEO and chairman of Sears Holdings. Lampert tapped him for a board seat on Sears Holdings- owned retail chain Kmart in 2003. Mnuchin left to become chief executive of SFM Capital Management, backed by financier George Soros.
Mnuchin’s SFM tenure was similarly brief. In 2004, he co- founded private hedge fund Dune Capital Management with Daniel Neidich, another former Goldman executive. The fund invested in equities and real estate — including some Trump projects.
The fund invested in the U. S. movie industry. Starting in 2006, Mnuchin reached a three- year deal in which Dune Entertainment agreed to invest $ 500 million in 20th Century Fox movies, according to media reports.
The transaction launched a deeper Mnuchin dive into entertainment investments and co- producing that included the blockbusters Avatar and the X- Men franchise, American Sniper, Gravity and The Lego Movie.
In 2013, Mnuchin, filmmaker Brett Ratner and Australian businessman James Packer joined in RatPac- Dune Entertainment that agreed to $ 300 million in co- financing for as many as 75 films by Warner Bros. Pictures, according to the movie company and media reports.
The following year, Mnuchin partnered with Ryan Kavanaugh and an investment group to buy debt and a stake in Kavanaugh’s Relativity Media.
Five years before taking the Relativity post, he led a group that bought Californiabased IndyMac Bank, which collapsed during the financial crisis.
IndyMac became OneWest Bank, with Mnuchin as chairman.
Mnuchin did not respond to USA TODAY interview requests. However, Trump’s transition staff provided a statement in which former OneWest chief executive Joseph Otting said the bank “remained committed to fair lending and meeting the credit needs of all borrowers in its communities, including those in distress.”