Mnuchin weathers stormy confirmation hearing

Mnuchin weathers stormy confirmation hearing
© Greg Nash

President-elect Donald TrumpDonald John TrumpDems win from coast to coast Falwell after Gillespie loss: 'DC should annex' Northern Virginia Dems see gains in Virginia's House of Delegates MORE’s pick to head the Treasury Department, Steven Mnuchin, faced some intense grilling from Senate Democrats Thursday. But there was little to suggest that his nomination is in any significant danger.

In a wide-ranging hearing more than five hours long, Mnuchin was pressed by Democrats for details on everything from his thoughts on tax reform to his defense of foreclosures carried out by OneWest Bank while serving as its top executive.

Mnuchin also faced significant pressure over the fact that just one day earlier, he had to update his financial disclosures to include nearly $100 million in previously unreported assets, as well as a fund based in the Cayman Islands, a notorious tax haven.

But like many of Trump’s picks, at the end of the day it appeared that Mnuchin could still rely on enough Republican support to win the job.

ADVERTISEMENT
As Trump began naming his Cabinet picks, Democrats seized on Mnuchin as a high-profile target, dubbing him the “Foreclosure King” for his tenure at OneWest, which took over a troubled mortgage portfolio from the failing bank IndyMac.

Mnuchin, a longtime Goldman Sachs executive who went on to establish his own hedge fund, was a natural target for Democrats eager to undercut Trump’s vow to “drain the swamp.”

But Mnuchin took many of those critiques head-on Thursday, defending his time as a bank executive and his work in the private sector. While Democrats highlighted individuals who lost their homes to OneWest, Mnuchin emphasized the efforts his bank took to help struggling homeowners adjust their mortgages.

“There were mistakes. We regret those mistakes,” he said. “Anyone who thinks we made more money foreclosing on a loan than modifying a loan has no understanding.”

Mnuchin noted that the bank was in compliance with federal regulators under his watch and said government rules tied the bank’s hands in some cases, forcing foreclosures.

He had a contentious exchange with Sen. Sherrod BrownSherrod Campbell BrownTrump tells Senate Dems that 'rich people get hurt' in GOP tax plan Senate panel approves North Korea banking sanctions Trump names Powell as chairman of Federal Reserve MORE (D-Ohio), as the two repeatedly spoke over each other while Brown highlighted problems with OneWest’s foreclosure process.

“It’s not that I’m being defensive,” said Mnuchin. “I’m proud of these results.”

But the Senate’s tax-writing committee put even more pressure on him over his use of businesses in the notorious tax havens of Anguilla and the Cayman Islands.

Sen. Ron WydenRonald (Ron) Lee WydenLobbying World Overnight Regulation: House to vote on repealing joint-employer rule | EPA won't say which areas don't meet Obama smog rule | Lawmakers urge regulators to reject Perry plan New tax plan will hinder care for older Americans MORE (D-Ore.), the top Democrat on the panel, lamented the “Mnuchin web of bank accounts and shell companies” reported in Mnuchin’s lengthy financial disclosures.

Mnuchin admitted that he did not have any employees or customers in those areas but insisted that they were set up there at the behest of clients, not for his own personal benefit.

“These entities were either taxed as U.S. corporations or U.S. partnerships and in no way did I use them, whatsoever, to avoid any U.S. taxes,” he said.

He said his failure to report a large pool of assets, mainly real estate, was an “oversight” after his legal team thought they did not need to be reported.

“Filling out these government forms is quite complicated,” he said.

But Wyden was unconvinced, saying the disclosures were only corrected after his staff caught the omission and brought it to Mnuchin’s attention.

Some Democrats used the hearing to attack Trump, pressing Mnuchin on how the Treasury Department would potentially navigate doing its work with the extensive business holdings Trump will still own after assuming the presidency.

Mnuchin insisted that while Trump was not liquidating his assets, as presidents in the past have, ethics would be a top priority.

“We have a big group of lawyers in the Treasury Department and a big ethics group,” he said. “The president-elect wants to follow the law and intends to do so.”

Mnuchin has no prior experience in the government, but he sought Thursday to adhere to some established positions held by past Treasury secretaries. For example, he said Congress should raise the debt limit “sooner rather than later” to ensure the government can continue paying its bills, after Republicans for years sought to extract policy concessions from President Obama in exchange for a borrowing hike.

And he also discussed the importance of a strong dollar just days after Trump suggested the value of the currency may be too high, a break with previous administration stances.

While Democrats highlighted their concerns with Mnuchin, there was little sign of significant concern within the GOP.

Under Senate rules changed under Democratic control, a simple majority is all that’s required to push through Mnuchin’s confirmation.

Senate Finance Committee Chairman Orrin HatchOrrin Grant HatchRead Senate GOP's tax bill Senate panel to start tax bill markup on Monday Senate set for clash with House on tax bill MORE (R-Utah) heaped praise on Mnuchin, lauding his extensive private sector experience as a boon to the government.

“You’ve made tremendous sacrifices to take this job, and I hope our colleagues at the other side of the aisle will come to appreciate that,” he said. “You’ve certainly impressed a lot of people here. Certainly me.”

The only GOP senator to express some reticence was Dean HellerDean Arthur HellerBipartisan group of lawmakers aim to reform US sugar program Dem donor on MSNBC: 'Hopefully we'll get our sh-- together' The Hill interview — DNC chief: I came here to win elections MORE (Nev.).

Progressives have run ads in Heller's home state, which was hit hard by the housing crisis. And the senator, who is running for reelection in 2018, expressed frustration with Mnuchin over a failure to get some answers from him and whether he ran his bank purely for profit or if he wanted to protect homeowners.