Donald Trump’s pick for treasury secretary, Steven Mnuchin, has deep ties on Wall Street, including working as a partner for Goldman Sachs, where his father also worked. Mnuchin’s hedge fund also played a role in the housing crisis, after it scooped up the failing California bank IndyMac in 2008. Under Mnuchin’s ownership, IndyMac foreclosed on 36,000 families, particularly elderly residents trapped in reverse mortgages. Mnuchin was accused of running a “foreclosure machine.” We speak to Rep. Maxine Waters about why she opposes Mnuchin for the Treasury post.
AMY GOODMAN: Congressmember Waters, I also wanted to ask you about Treasury Secretary nominee Steven Mnuchin. During his confirmation hearing last month, the former Goldman Sachs executive defended himself against accusations he used a tax haven in the Cayman Islands in order to avoid paying taxes.
STEVEN MNUCHIN: Let me just be clear again: I did not use the Cayman Island entity in any way to avoid taxes for myself. I paid U.S. taxes on all that income, OK? So, there was no benefit to me from the Cayman entity. As I said, the Cayman entity was set up to accommodate nonprofit and pension funds that want to invest through offshore in a certain number of offshore—
AMY GOODMAN: Mnuchin has deep ties on Wall Street, including working as a partner for Goldman Sachs, where his father also worked. Mnuchin’s hedge fund also played a role in the housing crisis after it scooped up the failing California bank IndyMac in 2008. Under Mnuchin’s ownership, IndyMac foreclosed on 36,000 families, particularly elderly residents trapped in reverse mortgages. He was accused of running a “foreclosure machine.” The bank, which was renamed OneWest, was also accused of racially discriminatory lending practices. In 2015, Mnuchin sold the bank for $3.4 billion—$1.8 billion more than he had bought it for. During an appearance on CNBC, he was asked about OneWest Bank allegedly violating the Fair Housing Act by redlining.
STEVEN MNUCHIN: Let me tell you, one of the most proud aspects of my career was buying IndyMac during the financial crisis. We bought it from the government in a highly competitive six-month auction. And we saved a lot of jobs, and we created a lot of—a lot of opportunities for corporate loans. Now, one aspect of that is we bought the worst mortgage portfolio in the history of time. IndyMac was about 30 percent delinquent loans. So, all the loans that we unfortunately had to foreclose on, we didn’t originate those. Those were IndyMac loans. And the deal, when we merged with CIT, was the first bank deal to be approved post-Dodd-Frank over $50 billion. So we went through a one-year comment period with the OCC and the Fed. These same community groups protested against the deal. The regulators looked at the deal and thought it made sense.
AMY GOODMAN: That’s treasury secretary nominee Steve Mnuchin. Congressmember Waters, this is personal for you. You’re from Los Angeles. The protests were in your area, outside his house, protesting what they called a “foreclosure machine.”
REP. MAXINE WATERS: Yes, absolutely. I know something about Steve Mnuchin. As a matter of fact, I was contacted and asked to sit in on some efforts that were being made by nonprofits to get him to, you know, make real investments in the community, rather than simply being known as the “foreclosure king,” having, of course, foreclosed on about 36,000 families and homes. And they were asking him to support the work of the nonprofits, and asking him to make up for the problems that he had caused in communities with these foreclosures. Many of the homes that belonged in his portfolio were not kept up. The grass grew up. The windows were boarded up. It helped to drive down the value of other homes in the area. And, of course, he is guilty of redlining and not having the bank make loans in minority communities. And so, he comes with a bad reputation. And just to know that he bought those loans from IndyMac and got them, I believe, very cheaply and then made over a billion dollars on them is quite disturbing.
And this is what we’re going to have as treasury secretary? He would be the one to convene all of the agencies dealing with financial services under something called FSOC. And so, whether you’re talking about FDIC or OCC or the Feds, etc., all of them would be convened regularly for FSOC under the leadership of the Treasury. That is not good for this country. I don’t think he should have that kind of huge power and responsibility. And so, this is typical of what this president is doing. He’s picking from Wall Street, he’s picking from the financial services industry, those people who have made a lot of money, who were responsible for that meltdown that we had with subprime loans. He knows exactly what he’s doing. And don’t forget, Donald Trump said he made money during the crisis. And I’m told that he set about teaching students in the so-called Trump University how they can make money in such a crisis.
JUAN GONZÁLEZ: And, Congresswoman Waters, about the other nominee you mentioned, Jeff Sessions for attorney general, you’re completely opposed to his appointment. Could you say why?
REP. MAXINE WATERS: Yes. You know, Jeff Sessions comes with a reputation of—you know, he was not confirmed, I think, when he tried to get confirmed in 1986. And he didn’t get confirmed then because of a racist background. I think he’s a throwback. He’s still the same Jeff Sessions now as he was then. I don’t think that he should be in the position of being the attorney general of this country, overseeing the Civil Rights Division, that has a responsibility for making sure that people’s civil rights are not violated and moving very aggressively to deal with local police departments. As a matter of fact, he does not believe that the government should have a role dealing with troubled local police departments, like in Ferguson, where the Justice Department went in to try and work out the problems that had been brewing for years in that city. But he does not believe that that’s a role for the Justice Department.
AMY GOODMAN: Interestingly—
REP. MAXINE WATERS: Yes.
AMY GOODMAN: —they cannot rush ahead with the vote for Senator Sessions to be attorney general, because if he’s confirmed, there will be one less Republican senator, and they’re afraid that then Betsy DeVos, they could not get approved, so they have to get her confirmed before they confirm Senator Sessions.