Steven Mnuchin
Steven Terner Mnuchin is an American investment banker and film producer who served as the 77th United States secretary of the treasury as part of the first cabinet of Donald Trump from 2017 to 2021. Serving for nearly a full presidential term, Mnuchin was one of the few high-profile members of Trump's cabinet whom the president did not dismiss during his first term.
Mnuchin was born in New York City. Upon graduating from Yale University in 1985, Mnuchin joined the investment bank Goldman Sachs where his father, Robert Mnuchin, was a general partner. Mnuchin worked at Goldman Sachs for 17 years, eventually becoming its chief information officer. After he left Goldman Sachs in 2002, he worked for and founded several hedge funds and launched Dune Entertainment, a film production company that financed several films for 20th Century Fox. He later served on the boards of Kmart and Sears Holdings. During the 2008 financial crisis, he bought failed residential bank Indymac, which he reorganized as OneWest Bank and resold, becoming embroiled in lawsuits over questionable foreclosures.
Mnuchin joined Trump's presidential campaign in 2016, and was named National Finance Chairman for the campaign. On February 13, 2017, Mnuchin was confirmed by the U.S. Senate as Secretary of the Treasury by a vote of 53–47. As Secretary of the Treasury, Mnuchin supported the Trump tax cuts and the tax reform of 2017, and advocated reducing personal and corporate tax rates. In regard to regulatory policy, Mnuchin supported President Trump’s partial repeal of the Dodd–Frank Act, citing the complexity of the legislation.
Early life and education
Steven Mnuchin was born on December 21, 1962, in New York City, the second-youngest son in his family. Mnuchin's family is Jewish. He is the 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 in New York City, the Mnuchin Gallery. Mnuchin's great-grandfather, Aaron Mnuchin, a Russian-born diamond dealer who later resided in Belgium, emigrated to the U.S. in 1916.Mnuchin attended Riverdale Country School in New York City. He graduated from Yale University in 1985 with a bachelor's degree in economics. At Yale, Mnuchin was publisher of the Yale Daily News, and was also initiated into Skull and Bones in 1985. While a student at Yale, Mnuchin drove a Porsche and lived at New Haven's Taft Hotel.
Mnuchin's first job was as a trainee at investment bank Salomon Brothers in the early 1980s, while still studying at Yale.
Finance and banking career
Goldman Sachs
Mnuchin graduated from Yale in 1985 and started working for Goldman Sachs, where his father had been employed since 1957. Mnuchin started in 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:- November 1994 – December 1998: Head of the Mortgage Securities Department
- December 1998 – November 1999: Overseeing mortgages, U.S. governments, money markets, and municipals at Fixed Income, Currency and Commodities Division
- December 1999 – February 2001: Member of the Executive Committee and co-head of the Technology Operating Committee
- February 2001 – December 2001: Executive Vice President and co-chief information officer
- December 2001 – 2002: Executive vice president, member of the Management Committee, and chief information officer
Hedge funds
After he left Goldman Sachs in 2002, Mnuchin briefly worked as vice-chairman of hedge fund ESL Investments, which is owned by his Yale roommate Edward Lampert. From 2003 to 2004 he worked as Chief Executive Officer at SFM Capital Management, a fund backed by 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 former 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 became a director of Kmart when it exited bankruptcy through an investment by ESL. When the company merged in 2005 with Sears to form Sears Holdings, he continued on the board of the new company until his nomination as Treasury secretary in 2016. After Sears Holdings' bankruptcy in 2018 the company's estate sued the former management, including Lampert and Mnuchin, for "asset stripping" during their tenure. The lawsuit ended in 2022 with a $175 million settlement in the estate's favor.
Mnuchin was outbid by Lone Star Funds on a portfolio of residential mortgage-backed collateralized debt obligations being sold by Merrill Lynch during the 2008 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 to avoid U.S. taxes."
OneWest
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 be required to pay $2.4 billion to IndyMac under the shared loss agreement. After purchasing IndyMac, renamed OneWest Bank, Mnuchin moved into a 20,000 square foot house in Bel Air to begin his tenure 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 a member of CIT Group's board of directors. As of August 2016, Mnuchin owned $97 million in CIT Group stock, most of which he had 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.Foreclosures
OneWest was criticized for aggressively foreclosing on homeowners. In the five years following Mnuchin's acquisition of OneWest, the bank foreclosed on 36,000 homes in California, leading local activists to begin calling Mnuchin "the foreclosure king." The high foreclosure rate might 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 these foreclosures, 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 had 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 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 represented about 39% of all federally insured reverse mortgage foreclosures during that time. CRC estimated that Financial Freedom serviced only 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 non-profits filed a complaint with the Department of Housing and Urban Development, alleging redlining by OneWest Bank.
In 2017 a leaked internal memo from the California attorney general's office was published, stating that the prosecutor's office had found more than a thousand violations of foreclosure law by OneWest during Mnuchin's tenure. The prosecutor, Kamala Harris, had declined to file a civil enforcement suit.
Liberty Strategic Capital
After Donald Trump lost the 2020 election, Mnuchin established an investment fund, Liberty Strategic Capital. The fund obtained funds from the Saudis, Emirati and Qatari sovereign wealth funds. According to the New York Times, "The scale of Mr. Mnuchin’s fund and its investments from countries where he traveled as Treasury secretary have raised questions about whether he used his government role to enrich himself."On March 6, 2024 Liberty lead the group of investors including Hudson Bay and Reverence Capital to invest over $1B in NYCB. Mnuchin became a board member of the bank, that was suffering from heavy losses.
On March 14, 2024 Mnuchin announced that he's putting together the group of investors to buy TikTok. “This should be owned by U.S. businesses. There’s no way that the Chinese would ever let a U.S. company own something like this in China,” Mnuchin said.