Steven Mnuchin appeared before the Senate Finance Committee where he was grilled on his financial activities. The former Goldman Sachs banker is Donald Trump’s pick for Treasury Secretary. (Photo: Getty)
Mnuchin initially failed to disclose his role in the off-shore companies and also failed to disclose nearly $100 million in real estate holdings.
Mnuchin is director of Dune Capital International, an investment fund incorporated in the Cayman Islands, a known tax haven.
He also holds management posts in seven other investment funds, at least one of which is headquartered in Antigua, another tax haven.
Mnuchin insisted he’s always paid his personal income taxes, but he danced around questions about the reason for operating off-shore companies.
He would only say creating tax advantages for his clients was only one possibility, although he refused to admit that was the reason he set up the companies.
Mnuchin told Senate staffers the omissions “were due to a misunderstanding of the questionnaire,” according to a memo obtained by The New York Times.
Committee Democrats zeroed in on the lapses.
“Never before has the Senate considered such an ethically challenged slate of nominees for key cabinet positions,” said Sen. Chuck Schumer, D-NY, who is the ranking minority member of the Senate Finance Committee.
“Mr. Mnuchin’s failure to disclose his Cayman Islands holdings just reeks of the swamp that the president-elect promised to drain on the campaign trail,” he added.
Mnuchin also had other baggage going into the hearing.
During the 2008 financial crisis, Mnuchin became a vulture investor, buying distressed assets at pennies on the dollar and turning them around. One of the deals he engineered with Wall Street pals was the takeover of IndyMac, a high-flying mortgage bank that crashed.
Mnuchin renamed the bank OneWest and made a killing on government reimbursements for bad mortgage loans. The bank foreclosed on its customers with a vengeance, repossessing more than 36,000 homes and reaping $1.2 billion in taxpayer subsidies.
Last year, CIT Bank bought OneWest in a $3.4 billion deal over the objection of fair-housing advocates, civil rights groups and homeowners. Mnuchin, then OneWest Chairman, reaped a $10.9 million payout and joined CIT’s board.
“Investors in the bank, including Mr. Mnuchin, profited handsomely at the expense of thousands of working people across our state,” Kevin Stein, deputy director of the California Reinvestment Coalition, said at the time.
The bank foreclosed on 60,000 homes, including 36,000 in California, and denied 3 in 4 mortgage modification requests from homeowners seeking smaller monthly payments, Paulina Gonzalez, executive director of the California Reinvestment Coalition.
“Since I was first nominated to serve as Treasury Secretary, I have been maligned as taking advantage of others’ hardships in order to earn a buck. Nothing could be further from the truth,” Mnuchin told Senators.
The former banker and two former Goldman colleagues set up Dune Capital Management in 2004.
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