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November 14, 2016 at 12:30 PM
Former Goldman Sachs Group Inc. partner Steven Mnuchin has been recommended by Donald Trump’s transition team to serve as Treasury secretary, according to two people familiar with the process, and the choice is awaiting the president-elect’s final decision.
Mnuchin, the campaign’s national finance chairman, has been considered the leading candidate for the job. Trump has displayed a pattern of loyalty to his closest campaign allies in early administration selections, and Mnuchin, 53, had signed on at a time when many from Wall Street stayed away.
Before joining Trump, Mnuchin rose through the kind of elite institutions the president-elect spent his campaign vilifying. Mnuchin was tapped into Yale’s Skull and Bones secret society, became a Goldman Sachs partner like his father before him, ran a hedge fund, worked with George Soros, funded Hollywood blockbusters and bought a failed bank, IndyMac, with billionaires including John Paulson. They renamed it OneWest, drew protests for foreclosing on U.S. borrowers, and ultimately generated considerable profits, selling the business last year to CIT Group Inc. for $3.4 billion.
Mnuchin, who co-founded hedge fund Dune Capital Management LP, was seen at Trump Tower Monday. Asked by reporters why he was there, he said, “I’m here just helping with the transition this week. A lot of work to do.” He had no immediate comment when reached about the Treasury post.
Goldman Connections
Mnuchin would become the third former Goldman Sachs executive to head the Treasury since the mid-1990s. Robert Rubin and Henry Paulson both ran the Wall Street firm before becoming Treasury chiefs under presidents Bill Clinton and George W. Bush, respectively.
It’s a longstanding pattern that has earned Goldman the nickname “Government Sachs,” and it currently extends to the Federal Reserve and abroad. New York Fed President William Dudley is the firm’s former chief U.S. economist. Bank of England Governor Mark Carney was a managing director at the firm. European Central Bank President Mario Draghi was vice chairman of its international arm.
On Sunday, Trump named another Goldman alumnus, the former Breitbart News chief Steve Bannon, to one of his top posts in his White House, chief strategist and senior counselor.
The investment bank’s shares have climbed 15 percent since the Nov. 8 election.
The next Treasury chief’s challenges will include a budget deficit that’s forecast to widen and require increased debt issuance; an economy that’s been stuck in a period of slow growth and exacerbated income inequality; and international partners wary about the new president’s approach to trade. During the campaign, the real estate mogul indicated that among his first moves will be a Treasury designation naming China a currency manipulator.
