Former Goldman Sachs partner and hedge fund manager Steven Mnuchin is President Trump’s controversial pick for Treasury Secretary. It is alleged that Mnuchin failed to disclose an estimated $100 million in real estate assets on his financial disclosure forms, which he was required to fill out and submit before his Senate confirmation hearing. He also reportedly failed to include his position as the director of a Cayman Islands holding corporation, raising criticisms of tax avoidance.
The revelations came just hours before Mnuchin’s testimony in his confirmation hearing in the U.S. Senate before the Senate Finance Committee. The committee is typically known for its bi-partisan nature, but Mnuchin’s omissions proved to be a derisive, partisan issue in the hearing. Democrats alleged that they make him unfit to serve as Treasury Secretary, the principle economic advisor to the president.
At the start of Mnuchin’s hearing, Senator Ron Wyden, of Oregon, the highest-ranking Democrat on the Finance Committee, deplored “There is no clearer example than Mr. Mnuchin’s hedge fund setting up outposts in Anguilla and the Cayman Islands, an action that can be explained only by the islands’ zero-per-cent tax rate.” Senator Wyden continued on to suggest that Mnuchin has syphoned millions of dollars of profits from his numerous business ventures into an elaborate web of offshore holdings. Senator Chuck Schumer of New York and Senator Robert Menendez of New Jersey also criticized Mnuchin. Senator Schumer called him “ethically challenged,” while Senator Menedez noted, “It doesn’t take a rocket scientist to understand the words ‘list all positions.”
Mnuchin, however, was insistent in the hearing that his failure to disclose the assets was nothing more than a mistake. He explained that he been overwhelmed by the forms he has to fill in, and simply forgot to put it down. “Let me first say, any oversight, it was unintentional. As you all can appreciate, filling out these government forms is quite complicated,” he told the Senate. “Let me be clear. I did not use the Cayman Islands to avoid paying taxes myself. I paid taxes on all that income.”
Republicans, meanwhile, praised Mnuchin’s qualifications and experience. “Objectively speaking, I don’t believe anyone can reasonably argue that Mr. Mnuchin is unqualified for the position,” Senator Orrin G. Hatch, Republican, of Utah said. “If the confirmation process focused mainly on the question of a nominee’s qualifications, there would be little, if any, opposition to Mr. Mnuchin’s nomination.”
Beyond the tax controversy, Mnuchin faced scrutiny over a myriad of other issues. Perhaps most notably, it was alleged that he personally profited to the tune of hundreds of millions of dollars from the U.S. mortgage crisis. Mnuchin purchased a mortgage lender, OneWest, on the verge of bankruptcy during the crisis, a company which then went on to foreclose thousands of homes. Bloomberg estimated that Mnuchin personally made around $200 million from the deal.
Mnuchin meanwhile insisted throughout the hearing that he is committed to serving the American people as Treasury Secretary. “I am committed to stimulating prosperity for all Americans, for economically empowering every citizen,” Mnuchin said. “We will not rest in our mission until that is a reality.” Mnuchin will face a confirmation vote from the senate sometime in early February. Adam Szubin is currently the acting Treasury Secretary.
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