While it has yet to be officially confirmed by the Trump transition team, moments ago the NYT reported that - in what had previously been leaked on several occasions on various other outlets most notably the WSJ - former Goldman banker and Soros employee, Steven Mnuchin "a financier with deep roots on Wall Street and in Hollywood but no government experience" is expected to be named Donald J. Trump’s Treasury secretary as soon as Wednesday.
The WSJ has confirmed as much, reporting that "President-elect Donald Trump will name longtime banker and former Goldman Sachs executive Steven Mnuchin as Treasury secretary, turning to a campaign loyalist and fundraiser for the incoming administration’s top economic cabinet post, a transition official said Tuesday."
From the NYT:
Mnuchin, 53, was the national finance chairman for Mr. Trump’s campaign. He began his career at Goldman Sachs, where he became a partner, before creating his own hedge fund, moving to the West Coast and entering the first rank of movie financiers by bankrolling hits like the “X-Men” franchise and “Avatar.”
As Treasury secretary, Mr. Mnuchin would play an important role in shaping the administration’s economic policies, including a package of promised tax cuts, increased spending on infrastructure and changes in the terms of foreign trade. He could also help lead any effort to roll back President Obama’s nuclear deal with Iran and opening to Cuba by reimposing sanctions on Tehran and Havana.
As the NYT adds, his selection fits uneasily with much of Mr. Trump’s campaign rhetoric attacking the financial industry. Mr. Trump, in a campaign ad intended as a closing argument, portrayed the chief executive of Goldman Sachs as the personification of a global elite that the ad said had “robbed our working class.” But, the NYT notes, Mnuchin has said that he agrees with Mr. Trump’s priorities, and he was an early supporter of a candidate who clearly prizes loyalty.
When Mr. Trump won New York’s Republican presidential primary in April, Mr. Mnuchin attended the victory party. The next day, he accepted Mr. Trump’s invitation to become the campaign’s national finance director. A number of Mr. Mnuchin’s friends made comments to various publications expressing shock at the decision. Mr. Mnuchin was unfazed. “Nobody’s going to be, like, ‘Well, why did he do this?’ if I end up in the administration,” he told Bloomberg Businessweek in August.
As the WSJ adds, "Mr. Mnuchin’s Wall Street pedigree presents a contrast with the populist themes Mr. Trump struck in his campaign, railing against big banks and vowing to close tax loopholes that benefit hedge funds. Mr. Trump also repeatedly attacked his rivals in the primary and general elections for their Wall Street ties, especially those connected to Goldman Sachs."
If confirmed by the Senate as Treasury secretary, Mr. Mnuchin will join a list of prominent bankers who made similar moves from Wall Street to Washington, including two of his former bosses at Goldman, Henry Paulson and Robert Rubin, who were both top Goldman executives before running Treasury.
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For those who have missed our previous piece on the career banker, here are some more details on Mnuchin's background from the WSJ:
Despite his successful Wall Street career, Mr. Mnuchin has no experience running a massive organization—the Treasury Department has 86,000 employees—or in economic or financial policy-making. The biggest entity Mr. Mnuchin has run was the technology division of Goldman, which had over 5,000 employees.
Mr. Mnuchin’s acquaintances describe him as smart, with several people calling him “nerdy.” He regularly attends New York philanthropic galas. He has long held high-profile positions on charity boards and is a former director of the Whitney Museum of American Art. At an event for New York charity City Harvest in 2006, Mr. Mnuchin and his ex-wife were photographed with Mr. Trump. Mr. Mnuchin is now engaged to Scottish actress Louise Linton.
Mr. Mnuchin joined Goldman in 1985. He worked in the fixed-income department, eventually overseeing trading in mortgages, U.S. government, money market and municipal bonds. He made partner in 1994. Mr. Mnuchin later became the firm’s chief information officer.
When Goldman converted into a publicly traded company in 1999, Mr. Mnuchin, like other partners, made millions. He later bought a 6,500-square-foot apartment in 740 Park Avenue, a storied Manhattan co-op built by Jackie Kennedy’s grandfather that is known as the “billionaires’ building.”
At a recent conference, Goldman CEO Lloyd Blankfein called Mr. Mnuchin a “highflier, a partner at a young age. He did very well. He is a smart, smart guy.”
In 2002, Mr. Mnuchin left Goldman and later was hired to run a credit fund set up by billionaire George Soros.
In 2004, Mr. Mnuchin and two former Goldman colleagues founded hedge fund Dune Capital Management LP with financial backing from Mr. Soros. Dune soon expanded into the entertainment business, striking up a film-financing deal with a unit of 21st Century Fox. Among the films Dune financed was “Avatar,” one of the all-time box office hits.
21st Century Fox and News Corp, parent company of The Wall Street Journal, share common ownership.
In 2008, IndyMac Bank in Pasadena, Calif., collapsed in one of the largest bank failures in U.S. history. Mr. Mnuchin led a group of investors, including funds run by Mr. Soros and other hedge-fund and private-equity titans, who bought it from the government for about $1.5 billion. The Federal Deposit Insurance Corporation agreed to cover a portion of any future loan losses, a lucrative arrangement for Mr. Mnuchin and his partners. Regulators who negotiated with Mr. Mnuchin found him to be the kind of detail-oriented person who would “know the cost of every pencil,” according to a person familiar with their thinking.
Mr. Mnuchin, who became chairman of the renamed OneWest Bank and CEO of its parent company, relocated to Los Angeles and bought a mansion in the Bel Air neighborhood.
The deal soon became controversial. In 2011, community activists descended on Mr. Mnuchin’s Bel Air home to protest over the possible eviction of a homeowner who was behind on her mortgage payments to OneWest.
In 2014, OneWest was sold to CIT Group Inc., earning Mr. Mnuchin and Dune hundreds of millions of dollars in profits, according to a person familiar with the matter. He later pocketed $10.9 million in severance payouts when he left the company.
Despite the huge profits, OneWest’s legacy continues to trail Mr. Mnuchin, who now sits on CIT’s board and owns more than 1% of its shares.
A portion of OneWest’s mortgage business is under investigation by the Department of Housing and Urban Development. Last July, CIT said it was forced to take a $230 million charge as it cleaned up accounting problems at OneWest. And two California housing groups this month accused OneWest of discriminating against minorities by not putting branches in their communities.
Meanwhile, 14 years after leaving Goldman, Mr. Mnuchin remains in the firm’s orbit, showing up at alumni events and involving other ex-Goldman executives in his finance deals.
He has continued to work those angles as Mr. Trump’s finance chairman, a post he assumed in May. Mr. Mnuchin negotiated a joint fundraising agreement with the Republican National Committee, easing the way for major donors to give both to the party and to Mr. Trump. The committee’s chairman, Lewis Eisenberg, is a Goldman veteran and contemporary of Mr. Mnuchin’s father.
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Even though the nomination is still unofficial, moments ago CBS' reproter Charlie Keye tweeted that it can also confirm that "Trump has chosen financier Steven Mnuchin as his nominee for Treasury Secretary."
Just now. @CBS News has confirmed President-elect Trump has chosen financier Steven Mnuchin as his nominee for Treasury Secretary.— Charlie Kaye (@CharlieKayeCBS) November 29, 2016
And just like that the swamp feels a little bit more full.