Steven Mnuchin’s Defining Moment: Seizing Opportunity From the Financial Crisis
Donald Trump’s nominee for Treasury secretary made millions buying failed IndyMac and has résumé at odds with president-elect’s campaign rhetoric
Like other Trump cabinet picks, Mr. Mnuchin has a résumé that is at odds with much of the president-elect’s populist rhetoric on the campaign trail.
.. Mr. Trump is building a cabinet that combines traditional Republican Party leanings with unconventional elements, including people who made their fortunes by taking big investment risks. IndyMac was the defining deal of Mr. Mnuchin’s career. He knew that the government needed to sell the failed bank—and he played hardball.
.. Mr. Mnuchin, 53 years old, has no experience in government or running a large organization, though he was a campaign loyalist and fundraiser for Mr. Trump.
.. In the interview, Mr. Mnuchin said the new administration’s goal would be to achieve annual economic growth of 3% to 4%. He said his top policy priorities would be to overhaul the federal tax code, roll back certain financial regulations, review trade agreements and invest in infrastructure.
.. He said Mr. Trump won’t hesitate to call up corporate chiefs to lean on them about jobs, factory closures and other matters.
Sen. Ron Wyden .. Mr. Mnuchin has a “history of profiting off the victims of predatory lending.”
.. Mr. Mnuchin, whose father spent his entire career at Goldman
.. He made partner in 1994 and oversaw Goldman’s mortgage-trading desk before becoming chief information officer.
.. Messrs. Mnuchin and Trump were soon in the same philanthropic and social circles, attending dinner parties at each other’s Manhattan homes and mingling at the U.S. Open tennis tournament and the Metropolitan Museum of Art Gala... he said he has been a registered Republican for “as long as I can remember,” yet he also gave a total of $7,400 since 2000 to Democrat Hillary Clinton’s campaigns... Mr. Mnuchin donated to the campaigns of Democrats Barack Obama,John Edwards,John Kerry and Al Gore. The only Republican presidential candidate Mr. Mnuchin gave money to was Mitt Romney in 2012... In 2002, Mr. Mnuchin left Goldman and wound up running an investment fund set up by billionaire investor George Soros... Mr. Mnuchin assembled an all-star cast drawn from his years on Wall Street, including Mr. Soros, hedge-fund manager John Paulson, billionaire Michael Dell’s investment firm and several former Goldman executives, including J. Christopher Flowers. They signed up on the basis that Mr. Mnuchin would personally run the bank.. The FDIC also agreed to protect the buyers from the most severe losses for years. That loss-sharing arrangement turned out to be a master stroke... Banks often go out of their way to avoid losses, even when borrowers are in violation of loan terms. The loss-sharing agreement took away some of the disincentives, since future losses would be borne partly by the government... CIT agreed to buy OneWest for $3.4 billion, a bounty of more than $3 billion, including dividends. Mr. Mnuchin’s take was several hundred million dollar.. After the sale, newly discovered accounting problems forced CIT to take a $230 million charge.It inherited another problem from nearly $40 million of loans.. Mr. Mnuchin left CIT amid a management shake-up announced last year, receiving a $10.9 million severance payment. His exit came just as Mr. Trump’s bid for the Republican nomination was gaining momentum. “The timing worked out well,”
.. Mr. Mnuchin helped write a tax-cutting plan and tried to rein in some of Mr. Trump’s populist rhetoric, including his vow to not “let Wall street get away with murder,” people familiar with the matter said.
.. Mr. Mnuchin, who divorced his second wife in 2014, brought his fiancée, Scottish actress Louise Linton, on the Trump campaign plane