Steven Mnuchin nominated for US treasury secretary

Donald Trump has nominated Steven Mnuchin, a Goldman Sachs banker-turned-Hollywood movie financier with no government experience, as US Treasury secretary.

Mnuchin, a multimillionaire who was dubbed a “foreclosure king” for buying up distressed mortgages and evicting thousands of homeowners during the financial crisis, immediately announced he would oversee “the largest tax change since Reagan” and said his “No 1 priority is tax reform”.

As well as cutting personal taxes, Mnuchin said the US corporate tax rate would be reduced from 35% to 15%. “By cutting corporate taxes, we’re going to create huge economic growth and we’ll have huge personal income,” he said in an interview with CNBC. “We’re going to get to 15% and bring a lot of cash back into the US.”

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Mnuchin said “taxes are way too complicated” and people spend “way too much time worrying about ways to get them lower”. He claimed that the proposed tax cuts would allow the US economy to achieve an annual growth rate of 3% to 4%.

Independent experts have said Trump’s proposed tax changes will hugely benefit the super-rich, while having little benefit, if any, for up to 8 million of the poorest families in the US.

Trump described Mnuchin as a “world-class financier, banker and businessman” who would have a “key role in developing our plan to build a dynamic, booming economy that will create millions of jobs”.

The appointment of Mnuchin appears to fly in the face of Trump’s campaign message chastising members of the business elite for causing the US’s ills and attacking Hillary Clinton for her close ties to Wall Street.

Mnuchin, 53, will replace the current Treasury secretary, Jack Lew, who spent most of his career in government or academia. Mnuchin will become the first career banker to take on the high-powered post since former Goldman chief executive Hank Paulson was appointed by George W Bush in 2006 and ran the US Treasury during the 2007-08 financial crisis.

He is worth an estimated $40m (£32m) and was in charge of raising funds for Trump’s successful election campaign. He was selected in preference to contenders including Jeb Hensarling, the chairman of the house financial services committee, Jamie Dimon, the chairman and chief executive of JP Morgan, and David McCormick, the president of asset management company Bridgewater Associates. The appointment must be confirmed by the Senate.

Mnuchin is the second Goldman alumnus appointed to a top position in Trump’s White House. Steve Bannon, the chairman of “alt-right” ( a far-right movement in the US) website Breitbart News, who ran Trump’s campaign, has been named chief strategist. He had previously worked as a mergers and acquisitions banker for Goldman.

During the campaign, Trump launched a TV advert that portrayed the Goldman chairman and chief executive, Lloyd Blankfein, as the personification of the global elite, saying he had “robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities”.

Trump could be about to add a third Goldman banker to his top team, with Gary Cohn, the bank’s president, being reportedly considered for the post of director of the Office of Management and Budget, in which role he would prepare the federal budget.

Cohn, who has long been seen as heir apparent to Blankfein as Goldman CEO, met the president-elect at Trump Tower on Tuesday. Several sources told DC blog Politico that the pair discussed a potential role for Cohn in the administration, including as OMB director.

Adam Hodge, the communications director at the Democratic National Committee, said: “So much for draining the swamp. [Mnuchin] preyed on homeowners struggling during the recession.”

He said Mnuchin’s appointment was “a slap in the face to voters who hoped he [Trump] would shake up Washington”.

Elizabeth Warren, the Massachusetts democratic senator, called Mnuchin “the Forrest Gump of the financial crisis” because he “managed to participate in all the worst practices on Wall Street” during his lengthy career.

“His selection as Treasury secretary should send shivers down the spine of every American who got hit hard by the financial crisis, and is the latest sign that Donald Trump has no intention of draining the swamp and every intention of running Washington to benefit himself and his rich buddies,” she said.

Mnuchin had been nicknamed the “foreclosure king” after buying up the remains of IndyMac, a California-based mortgage lender that collapsed in 2008, and evicting people who had trouble keeping up with their mortgage repayments. In 2011, Bloomberg said the “notoriously press-shy” Mnuchin was faced with angry homeowners protesting on the lawn of his Bel Air mansion.

The revived bank, which Mnuchin called OneWest Bank, was accused by a judge of engaging in “harsh, repugnant, shocking and repulsive” practices. The Suffolk County judge Jeffrey Spinner ruled in court that OneWest’s conduct was “inequitable, unconscionable, vexatious and opprobrious” for the way it treated a Long Island couple in 2009. Mnuchin went on to sell OneWest last year for more than double what he paid the Federal Deposit Insurance Corporation for the assets in the teeth of the financial crisis.

Trump defended Mnuchin’s track record in distressed debt. “He purchased IndyMac Bank for $1.6bn and ran it very professionally, selling it for $3.4bn plus a return of capital,” Trump said. “That’s the kind of people I want in my administration representing our country.”

Mnuchin and his family also pocketed about $3.2m in profit from money invested with the convicted conman Bernie Madoff. The money was not returned to Madoff’s many destitute victims because the Mnuchin family had withdrawn the funds before Madoff was exposed as running a Ponzi scheme.

Mnuchin’s first job was at Goldman Sachs, where his father, Robert Mnuchin, had worked before changing careers to become an art dealer. The younger Mnuchin worked at Goldman for 17 years, rising to become a partner before leaving to launch film financing company Dune Capital Management, which has invested in several of Rupert Murdoch’s 21st Century Fox blockbusters, including Avatar. Dune Capital is named after beach dunes near his mansion in the Hamptons.

Speaking on Tuesday night, Robert Mnuchin, the founder of the Mnuchin Gallery on the Upper East Side, told the Wall Street Journal: “He’s a person of great integrity. [We] expect he will do a good job in this very exciting and demanding position.” The elder Mnuchin’s collection includes works by Mark Rothko, Willem de Kooning and Jackson Pollock.

Mnuchin, who has three children from a previous marriage, is engaged to the Scottish actor-producer Louise Linton, who has appeared in CSI: NY and Cold Case. Earlier this year, Linton, 34, was accused of having a “white saviour complex” in a memoir about her gap year as an aid worker in Zambia.

Mnuchin was educated at the $50,000-a-year Riverdale Country school in New York, and Yale University, where his roommate was Edward Lampert, who went on to become the chief executive of the company that owns Sears.

Trump also nominated Wilbur Ross as commerce secretary. The billionaire distressed-asset investor is a vocal Trump supporter, and has called for a “more radical, new approach to government” and an end to free trade deals.

“There’s trade, there’s sensible trade and there’s dumb trade. We’ve been doing a lot of dumb trade,” he has said. “The trouble with regional trade agreements is you get picked apart by the first country, then you negotiate with the second country and get picked apart, and then go with the third one and get picked apart again.”

Trump said Ross’s role would be “reducing burdensome government regulations and unleashing America’s energy resources will strengthen our economy at a time when our country needs to see significant growth”.

Ross, 79, is chairman and chief strategist of private-equity firm WL Ross & Co, a company known for deals that included combining bankrupt steel producers. Ross has also plunged into holdings of textiles and coal, at one time controlling 1.2bn tons of US coal reserves.

Trump also selected Todd Ricketts, a billionaire and co-owner of the Chicago Cubs, for deputy secretary of commerce. All the positions are subject to review and approval by the US Senate.