Steven Mnuchin, the hedge fund millionaire Donald Trump has picked to run the US treasury, failed to disclose nearly $100m in assets to Congress, including his role as a director of offshore funds and close to $1m in art owned by his children.
On Wednesday night the committee learned Mnuchin had initially failed to disclose he was a director of Dune Capital International, an investment fund incorporated in the Cayman Islands, a tax haven. He also omitted other assets, including $95m in real estate and $906,556 worth of artwork held by his children. (See ‘It’s elder financial abuse’ further down the page.)
“Mr. Mnuchin has claimed these omissions were due to a misunderstanding of the questionnaire – he does not consider these assets to be ‘investment assets’ and thus did not disclose them, even though the committee directs the nominee to list all real estate assets,” according to documents filed with the committee.
Mnuchin was questioned by the Democratic senator Bob Menendez who asked how he had failed to disclose the assets when he signed a statement listing his holdings on 19 December.
“I have a ton of other questions on policy but first and foremost is truth and veracity, what Americans need in their treasury secretary” said Menedez. “In essence isn’t it true that what you did here is take these companies, put them offshore so you could help your clients, who you were making money from, to avoid US taxation.”
Mnuchin said that was “not true at all”.
“I assure you that these forms were very complicated,” he said. “When I certified those forms I thought it was correct.” Mnuchin said he may have erred in giving the forms in early and should have waited and that his lawyer had assured him he had filled the forms in correctly.
“It doesn’t take a rocket scientist to understand ‘list all entities’,” said Menendez.
Steve Mnuchin was once CEO of OneWest bank, which has been accused of lending dubious mortgages to the elderly and evicting thousands in the state of California.
Lights flashing, three police cars showed up to Bill Montes-Pack’s quiet suburban street on the morning of 15 December 2015. The Benicia, California, man had stayed up all night waiting for the sheriff’s office to evict him from the house his grandparents had owned since 1971.
“It was really, really traumatic,” Montes-Pack recalled one year later. Standing outside the locked front door, the 49-year-old peered into the empty living room that holds his earliest Christmas memories and surveyed the overgrown ivy damaging the house’s facade.
The foreclosure – which he said was based on a predatory loan and improper paperwork – originated with lender OneWest Bank, at the time run by chairman and CEO Steven Mnuchin. The veteran Wall Street financier’s foreclosure practices are receiving fresh scrutiny this week after president-elect Donald Trump announced him as the nominee for US Treasury secretary.
“Rather than shaking up Wall Street, he installs the very person that was part of the financial mess,” said Montes-Pack, who has effectively been homeless since the foreclosure. “I’m just thoroughly disgusted.”
‘It’s elder financial abuse’
Mnuchin, who is also a Hollywood movie producer, earned the nickname “foreclosure king” after he purchased distressed mortgages during the financial crisis and evicted thousands of homeowners.
The former Goldman Sachs banker, worth an estimated $40m, has no government experience, and critics worry that, as Treasury secretary, his policies could benefit the wealthiest people and roll back critical bank regulations.
One controversial source of OneWest foreclosures is the corporation’s reverse mortgages, which are loans to elderly homeowners that enable them to borrow against their home equity. These types of mortgages have been aggressively marketed to seniors as a way to help them stay in their homes, but some don’t understand the risks and can’t afford associated fees.
In 2006, Montes-Pack’s grandparents bought a reverse mortgage from IndyMac Bank, the predecessor to OneWest, which he said took advantage of his grandfather, who suffered from dementia.
After his grandparents died in 2012, Montes-Pack moved in, but the corporation – by then OneWest and run by Mnuchin – quickly began foreclosure proceedings.
The bank’s case, he said, relied on a document signed with the name “Bryan Bly”, who has been widely reported in numerous investigations as a so-called “robo-signer”. Robo-signers are individuals whose signatures are wrongfully used to automatically authenticate thousands of mortgage documents that they haven’t read and are in some cases falsely notarized.
The document, which an auditor determined was improper, makes his foreclosure illegitimate, Montes-Pack said, adding: “It’s elder financial abuse.”
His family is still fighting the foreclosure, but in the meantime Montes-Pack’s mother has been forced to live in a nursing home.