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DealBook|Donald Trump’s Pick for Fund-Raiser Is Rife With Contradictions


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Donald Trump’s Pick for Fund-Raiser Is Rife With Contradictions

Steven Mnuchin is Donald J. Trump’s new national finance chairman. Mr. Mnuchin has deep Wall Street roots, which might seem to put him at odds with some of Mr. Trump’s positions.Credit...Jason Merritt/Getty Images

By Andrew Ross Sorkin

  • May 9, 2016

Wall Street has been agog since last Thursday, when Donald Trump announced that Steven Mnuchin — who made his fortune at Goldman Sachs, worked for a firm funded by George Soros, and donated to Hillary Clinton — would be responsible for helping him raise $1 billion for Republicans and his own campaign.

For if Mr. Trump is an unconventional political candidate, his appointment of Mr. Mnuchin as his national finance chairman is the epitome of just how unconventional this election has become. Despite what Mr. Mnuchin said was a personal friendship of 15 years, Mr. Trump has attacked both Mr. Mnuchin’s investment company — suing it in 2008 over a building deal — as well as Goldman Sachs, the Democratic Party and other institutions Mr. Mnuchin has supported.

In a telephone interview Monday, Mr. Mnuchin emphasized the friendship part of the equation. “I was there at the beginning when he decided to run for president, and I’ve been a supporter and quiet adviser behind the scenes to him,” he explained. The day after Mr. Trump won the New York primary, Mr. Trump called Mr. Mnuchin and offered him the job. “I told him on the spot I would,” he said.

Mr. Mnuchin is known among Manhattan’s elite as part of one of the city’s most influential families. His father, Robert Mnuchin, spent 30 years at Goldman Sachs, where he supervised equity trading and served on the management committee. He moved on to become an art dealer, and his Mnuchin Gallery on the Upper East Side has housed exhibitions of Jackson Pollock and Willem de Kooning.

The son left Goldman in 2002 and briefly worked for Eddie Lampert, his Yale roommate, who is chief executive of Sears. He later started Dune Capital Management, an investment firm known for being on the team that bailed out the failed housing lender IndyMac in 2009, buying it out of bankruptcy from the F.D.I.C. and renaming it OneWest.

Mr. Mnuchin was the chairman of OneWest and sold it to CIT Group in 2015. Along the way, OneWest was involved in a string of lawsuits over questionable foreclosures, and settled several cases for millions of dollars.

Meanwhile, Mr. Mnuchin made his name in Hollywood: He teamed up with Brett Ratner, the producer and director, and James Packer, the financier — together, better known as the “RatPac” — to produce movies like “American Sniper” and “Mad Max: Fury Road.” He briefly was co-chairman of the movie company Relativity Media, but — happily for him — he left before it went bankrupt.

Mr. Mnuchin’s new job with Mr. Trump is filled with seeming contradictions. Mr. Trump spent much of his campaign attacking Goldman Sachs, using the bank to malign Ted Cruz’s wife, Heidi, who is an investment manager there, and Mrs. Clinton, who famously received rich honorariums for giving speeches there. “I know the guys at Goldman Sachs,” Mr. Trump said during one debate, poking at Mr. Cruz. “They have total, total control over him. Just like they have total control over Hillary Clinton,” he declared.

Mr. Trump has also said he plans to end the so-called carried interest loophole that allows private equity executives and some hedge fund mangers to claim the lower capital gains rate, rather than the higher ordinary income rate, on much of their compensation. The issue was a hot button for Mitt Romney in 2012, as he benefited greatly from this regulation; Mr. Mnuchin, as the chairman of Dune, has done so as well.

Mr. Mnuchin supported Mr. Romney in 2012; Mr. Romney has denounced Mr. Trump.

Both Mr. Mnuchin and his new boss have backed Mrs. Clinton’s Democratic political aspirations in the past, though both now swear fealty to the other team.

“I’m not a traditional fund-raiser — I think that was part of the appeal I had for Donald,” Mr. Mnuchin told me on Monday. “I have given to Democrats in the past. I’ve always believed in supporting the best candidate at the time.”

What about Mr. Trump’s broadsides against his former employer? Mr. Mnuchin emphasized that it was “quite a while ago” that he worked for Goldman, working there for 17 years but leaving in 2002. More recently, he said, “I’ve been focused on the West Coast economy and being a banker and lending in these markets.”

No doubt his connections will work to the benefit of the Republican Party, even during an election cycle when all the remaining candidates seem to be trying to sling mud at so-called fat cats. Not so Mr. Mnuchin.

“I wouldn’t in any way say I distanced myself from Wall Street,” he said. “I have very good friends on Wall Street.”

The job could be considered high-risk for someone who hasn’t lived in the glare of the public eye — and for someone backing as controversial a figure as Mr. Trump. With the exception of a handful of financiers like Carl Icahn, few big names on Wall Street have yet endorsed Mr. Trump.

Indeed, many of the nation’s largest banks — including Goldman Sachs — haven’t done business with Mr. Trump in years. Among the lenders on Mr. Trump’s disclosure form, only Merrill Lynch, among the country’s largest lenders, is listed for a loan made in 1993 and 1994. Since then, smaller banks or foreign institutions like UBS and Deutsche Bank are listed as his biggest lenders. According to former Goldman Sachs executives, the firm doesn’t solicit business from Mr. Trump and has declined at least one project; a spokesman for the firm declined to comment.

Mr. Mnuchin said, “I don’t think it is true” that Goldman refuses to work with Mr. Trump. He added: “There is a long, long list of some of the largest banks in the country that have done business with him. He has had no problem finding people who want to lend to his businesses.”

One of the lenders that have extended credit to Mr. Trump is Mr. Mnuchin’s Dune Capital. Dune was among a syndicate of lenders led by Deutsche Bank for the construction of his Trump International Hotel & Tower, a 92-story skyscraper in Chicago. Mr. Trump sued the lenders, including Dune, in 2008 to extend the terms of the loan on the basis of “unprecedented financial crisis in the credit markets.” The suit was later settled.

Mr. Mnuchin’s firm was also involved in investing in Trump Waikiki in Hawaii. “I haven’t really commented on what business we’ve done together,” he said. “I would describe it as more of a personal relationship than a professional relationship.”

Despite Mr. Trump’s changing rhetoric, Mr. Mnuchin is bullish: “Even on Wall Street, notwithstanding certain comments he’s made and things like that, I’ve gotten hundreds of calls from people who want to support him.”


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