Steven Mnuchin

Early life

Steven Mnuchin was born on December 21, 1962, in New York City, as the second-youngest son of a Jewish family. He is a son of Robert E. Mnuchin, of Washington, Connecticut, and Elaine Terner Cooper, of New York. Robert Mnuchin was a partner at Goldman Sachs in charge of equity trading and a member of the management committee. He is also the founder of an art gallery, Mnuchin Gallery, at 45 East 78th Street, New York. Mnuchin's great-grandfather, Aaron Mnuchin, a Russian-born diamond dealer who later resided in Belgium, emigrated to the U.S. in 1916.

Steven Mnuchin attended Riverdale Country School in New York City. He graduated from Yale University in 1985 with a bachelor's degree. At Yale, Mnuchin was publisher of the Yale Daily News, and was also initiated into Skull and Bones in 1985 according to membership documents leaked to writer Antony C. Sutton.

Mnuchin's first job was as a trainee at investment bank Salomon Brothers in the early 1980s, while still studying at Yale.

Goldman Sachs

After he graduated from Yale in 1985, he started working for Goldman Sachs, where his father had worked since 1957. He started at the mortgage department, and became a partner at Goldman in 1994. Until he left the company in 2002, Mnuchin held the following positions as a partner:

He left Goldman Sachs in 2002 after 17 years of employment, with an estimated $46 million of its stock and $12.6 million that he received in the months prior to his departure.

Hedge funds

After he left Goldman Sachs in 2002, Mnuchin briefly worked as vice-chairman of hedge fund ESL Investments, that is owned by his Yale roommate Edward Lampert. The following year, he established the company SFM Capital Management together with financier George Soros. Mnuchin founded a hedge fund called Dune Capital Management, named for a spot near his house in the Hamptons, in 2004 with two ex-Goldman partners. After its founding, Mnuchin served as the CEO of the company. The firm invested in at least two Donald Trump projects, the Trump International Hotel and Tower in Honolulu and its namesake in Chicago. Dune Capital Management and other lenders to the skyscraper in Chicago were sued by Trump before a settlement was reached.

Mnuchin was outbid by Lone Star Funds on a portfolio of residential mortgage-backed collateralized debt obligations being sold by Merrill Lynch during the financial crisis, which sold for $6.7 billion.

Mnuchin has been criticized for his use of offshore entities for investment purposes as a hedge fund manager, which is a common practice in the industry. Mnuchin has stated “In no way did I use [offshore entities] to avoid U.S. taxes”.

Purchase of IndyMac and other loan portfolios

In 2009, a group led by Mnuchin bought California-based residential lender IndyMac, which had been in receivership by the FDIC and owned $23.5 billion in commercial loans, mortgages, and mortgage-backed securities. The purchase price was a $4.7 billion discount to its book value. Mnuchin's investment group included George Soros, hedge fund manager John Paulson, former Goldman Sachs executive J. Christopher Flowers, and Dell Computer founder Michael Dell. The FDIC agreed to retain some of the more problematic assets of the bank, and signed a loss-sharing agreement. The FDIC was estimated to pay $2.4 billion to IndyMac under the shared loss agreement. After purchasing IndyMac, renamed OneWest Bank, Mnuchin served as CEO and chairman. OneWest then bought several other failed banks including First Federal Bank of California in 2009 and La Jolla Bank in 2010. Furthermore, OneWest bought a portfolio belonging to Citi Holdings for $1.4 billion. OneWest was profitable one year after Mnuchin had bought it, and it became the largest bank of Southern California, with assets worth $27 billion.

Sale to CIT

In 2015, Mnuchin sold OneWest to CIT Group for $3.4 billion. After the acquisition by CIT, Mnuchin remained at OneWest, and became member of CIT Group's board of directors. As of August 2016, Mnuchin owned $97 million in CIT Group stock, most of which he received in exchange for his stake in OneWest. On December 2, 2016, Mnuchin resigned from the board of directors of CIT as a result of his selection as nominee for Secretary of the Treasury.

Criticism for aggressive foreclosure practices

OneWest was criticized for aggressively foreclosing on homeowners. The high foreclosure rate may have been a result of the loss sharing agreement with the FDIC, whereby the FDIC had to reimburse OneWest for losses. According to The New York Times, OneWest "was involved in a string of lawsuits over questionable foreclosures, and settled several cases for millions of dollars." Because of another foreclosure, around 100 protesters of Occupy Los Angeles gathered outside Mnuchin's home in October 2011, and held signs, that read "Make Banks Pay." Two California fair-housing groups filed complaints to the federal government alleging that OneWest violated the Fair Housing Act by not lending money to African Americans, Hispanics, and Asians.

In November 2016, after OneWest was sold to CIT, the California Reinvestment Coalition submitted a Freedom of Information Act request to the United States Department of Housing and Urban Development (HUD) to learn more about CIT's reverse mortgage subsidiary, Financial Freedom. According to the HUD's response, CIT/Financial Freedom foreclosed on 16,220 federally insured reverse mortgages from April 2009 to April 2016. This represents about 39% of all federally insured reverse mortgage foreclosures during that time. CRC estimated that Financial Freedom only serviced about 17% of the market and thus was foreclosing more than twice as often as its competitors. CIT Group disclosed to investors that it had received subpoenas from HUD's Office of the Inspector General in the third and fourth quarters of 2015. In November 2016, two nonprofits filed a complaint with the Department of Housing and Urban Development, alleging redlining by OneWest Bank.

Motion pictures career

In 2004, he founded RatPac-Dune Entertainment as a side business, which was the financier of a number of notable films, including the X-Men film franchise and Avatar.

In Hollywood, Mnuchin, along with film producer Brett Ratner and financier James Packer, working with RatPac-Dune Entertainment, produced American Sniper and Mad Max: Fury Road. Mnuchin was co-chairman of the trio's movie company, Relativity Media, but left before it went bankrupt. A source close to the company said that he had resigned because of the potential for a conflict of interest between his duties at Relativity and OneWest.

Donations

Before joining the presidential campaign of Donald Trump in 2016, Mnuchin had been involved in politics only by donating money to campaigns. Between the years 1995 and 2014, he donated over $120,000 to political organizations, PACs, politicians, and political parties according to the Center for Responsive Politics. From his donations to individual politicians, 11 donations went to Republicans, while he contributed to Democrats 36 times. The election campaigns of Al Gore, Hillary Clinton, John Kerry, Barack Obama, and Mitt Romney were among those to which he donated money. Mnuchin said most of those donations were favors for friends.

During June to September 2016, Mnuchin made several contributions to the Republican Party, Donald Trump, and Paul Ryan. He donated over $400,000 to the Republican Party, over $5,000 to each of Paul Ryan's and Donald Trump's campaigns. Earlier in 2016, Mnuchin had donated $4,000 to Democrats Kamala Harris and Michael Wildes according to the Center for Responsive Politics.

2016 Presidential campaign of Donald Trump

Mnuchin had been an early supporter of Trump, and attended his victory party after the New York Republican primary victory on April 19, 2016 after he had received a last-minute invitation. He was called the following day by Trump, who asked him if he wanted to be the national finance chairman of his campaign. Mnuchin, who later said in an interview he had known Trump "for over fifteen years," accepted the offer. In the statement, in which the appointment was announced, Trump said "Steven is a professional at the highest level with an extensive and very successful financial background." He also said Mnuchin would bring "unprecedented experience and expertise," that would benefit the Republican Party. After being appointed main fundraiser, Mnuchin said "It’s a great privilege to be working with Mr. Trump to create a world class finance organization to support the campaign in the General Election."

Mnuchin worked with RNC counterpart Lewis M. Eisenberg on a late-developing joint operation for the committee and the Trump campaign. Before Mnuchin's appointment, no large-scale fundraising operation had been started for the Trump campaign. The late-summer fundraising goal was close to $500 million. The New York Times described his role during the campaign as "relatively behind the scenes," and the newspaper noticed he never "seemed to seek the spotlight." During an interview, Mnuchin said that because of his connection to the Trump campaign "a lot of people in California and New York [...] wanted to stop being friends." After Donald Trump won the election, he announced Mnuchin would join the transition team on November 11.

Nomination for Secretary of the Treasury

On November 30, 2016, President Trump announced on his website that he would nominate Mnuchin as U.S. Secretary of the Treasury . In the statement, Trump called Mnuchin a "world-class financier, banker and businessman," and he said Mnuchin played an important role in developing his "plan to build a dynamic, booming economy." Mnuchin himself said he was "honored to have the opportunity to serve our great country in this important role." He called Trump's economic agenda a "bold" one "that creates good-paying jobs and defends the American worker."

On February 1, 2017, the Senate Finance Committee approved his nomination by a vote of 11-0 with all Democrats boycotting the vote, sending the nomination to the Senate floor.

After the nomination was announced, Mnuchin resigned from his position on the board of trustees of the Museum of Contemporary Art, Los Angeles, to which he had donated between $100,000 and $250,000. When the pick was announced, Mnuchin was also a member of the boards of UCLA Health System, the NewYork–Presbyterian Hospital, and the Los Angeles Police Foundation.

The New York Times noted that Mnuchin's selection "fits uneasily with much of Mr. Trump’s campaign attacks on the financial industry." For example, an ad of Trump's campaign said Goldman Sachs' CEO had "robbed [the] working class." Mnuchin will be the third Goldman alumnus to serve in the job, after Henry M. Paulson Jr., under President George W. Bush; and Robert E. Rubin, under President Bill Clinton in the 2000s and 1990s, respectively.

During his Senate confirmation hearing on January 19, 2017, Mnuchin was condemned by Democrats due to the foreclosure practices at OneWest. Mnuchin said "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".

During his Senate confirmation hearing on January 19, 2017, Mnuchin was criticized for failing to disclose, in required disclosure documents, $95 million of real estate that he owned and his role as director of Dune Capital International, an investment fund in a tax haven. Mnuchin described the omissions as mistakes made amid a mountain of bureaucracy.

Following Trump's January 2017 announcement about an investigation into voter registration, it was discovered that Mnuchin is registered to vote in two states. Mnuchin holds registration in both California and New York.

On February 13, 2017 Mnuchin was confirmed as Secretary of the Treasury by a vote of 53-47.

Political views

In a November 30, 2016, interview on CNBC, Mnuchin called it the Trump administration's job to "make sure that the average American has wage increases and good jobs." Furthermore, he said his priority was getting a sustained growth of GDP of 3% or 4%. He said in order to get there "our number one priority is tax reform." Mnuchin said he would reduce corporate taxes to 15%, cut taxes for the middle class, and simplify the tax system.

When asked about trade, he said he believed in trade deals with individual countries, as opposed to regional trade deals. About Trump's deal with Carrier Air Conditioning to prevent jobs from going to Mexico, Mnuchin said "this president [...] is gonna have open communication with business leaders."

Mnuchin said he wants to "strip back parts of Dodd–Frank," because he argued it was too complicated, and it prevented banks from lending. He called the stripping back of Dodd–Frank "the number one priority on the regulatory side."

Personal life

When Mnuchin studied at Yale University, he lived in the former Taft Hotel in New Haven, Connecticut together with businessman Edward Lampert and lawyer Salem Chalabi as roommates. In 1999, Mnuchin married Heather deForest Crosby, who was his second wife, and they had three children together. Heather Mnuchin was active in philanthropy. After he bought IndyMac, Mnuchin moved to a 21,000 square feet (2,000 m²), $26.5 million house in Bel Air, Los Angeles, California, because the company's headquarters was situated in Pasadena. Steven and Heather divorced in 2014, and he is now engaged to the actress Louise Linton.

Mnuchin served as a member of the development board of Yale University, as board member of the Riverdale Country School, as member of the national board and senior member of the non-profit youth organization Junior Achievement, to which he had donated money, and as a board member of the Hirshhorn Museum and Sculpture Garden.

Mnuchin is Jewish.