Six months ago, Steven Mnuchin became finance chair for the Trump campaign. Having succesfully helped to raise 10s of millions of dollars for the campaign, the former Goldman Sachs partner and Soros Fund management employee is now positioned for something much larger as Donald Trump reportedly told his aides today that he wants Mnuchin to serve as his Treasury Secretary.
Ironically, Trump has often criticized Clinton (and his former competitor Ted Cruz) for their links to the big banks:
"I know the guys at Goldman Sachs. They have total, total control over him. Just like they have total control over Hillary Clinton,” Trump said in one debate.
But as we noted previously, he had no qualms, however, in hiring one of the most prominent Goldman alums to raise money for him.
In addition to Goldman, Mnuchin also worked at Soros Fund Management, whose founder, George Soros, has funded many left-leaning causes. Where it gets even more bizarre is that Mnuchin has donated frequently to Democrats, including to Clinton and Barack Obama.
As a hedge fund manager, Mnuchin is part of a group of businesspeople Trump has excoriated. In August, Trump said hedge fund managers were "getting away with murder" as he touted his proposal to end the so-called carried interest loophole, which gives private equity and hedge fund managers preferential tax treatment.
"The hedge fund guys didn't build this country," Trump said at the time on CBS' Face the Nation. "These are guys that shift paper around and they get lucky," he said. "They are energetic. They are very smart. But a lot of them—they are paper-pushers. They make a fortune. They pay no tax. It's ridiculous."
They apparently are also very good at raising money.
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Some more on Mnuchin's background: starting his career in the early 1980s as a trainee at Salomon Brothers before moving to Goldman Sachs in 1985, Mnuchin was front and center for the advent of instruments like collateralized debt obligations and credit default swaps. He has called securitization “an extremely positive development in terms of being able to finance different parts of the economy and different businesses efficiently.” The pitfalls of the financing method came later, he's said.
Mnuchin's father, Robert Mnuchin, was a partner at Goldman Sachs in the 1960s. The second-youngest of five siblings, Steven attended the prestigious Riverdale Country School and then Yale University, where his roommate was Edward Lampert, who would go on to become a hedge-fund manager and owner of Sears.
More recently, in October 2014 Mnuchin became co-chairman of the board of the Hollywood studio Relativity Media due to Dune's fascination with movies. Dune has provided financing for batches of winning movies, like the “X-Men” franchise and “Avatar,” Hollywood’s all-time box-office champion.
Relativity Media filed for bankruptcy last summer, just a few months after Mnuchin's arrival. According to Variety, Dune was intimately involved in the studio's failure.
The money-man and fellow investors in a Dune Capital fund are said to have lost as much as $80 million — equity that is almost certain to be lost for good, said two sources familiar with the situation. And disgruntled Relativity investors privately are questioning how a bank Mnuchin once headed –OneWest Bank of Pasadena – was allowed by Relativity to drain $50 million from the studio just weeks prior to the July 30 insolvency filing.
Mnuchin had left Relativity just days before the company reached an agreement with OneWest to extend the loan deadline and allow the bank to claim that money.
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To be sure, Hillary Clinton, who in turn has been attacked for her paid speeches to Goldman Sachs (and her public-private positioning for them), also has a high-ranking Goldman official in her ranks, former CFTC commissioner Gary Gensler, who is the former secretary of state’s chief financial officer and whom she is grooming for a potential Treasury Secretary.
But for Trump, a self-professed "anti-establishment" candidate, who has repeatedly stated he is not "for sale to special interest groups", his sudden call for the seemingly most "Wall Street" of Wall-Streeters to become Treasury Secretary may come as a big surprise to some and will leave many of his supporters demanding an explanation.