A key Senate Democrat quizzed President-elect Trump’s choice to lead the Treasury Department on controversial aspects of his record and statements Wednesday, the first encounter in a nomination process that is sure to be confrontational.
Sherrod Brown of Ohio, the ranking Democrat on the Banking Committee, sent a letter to former Goldman Sachs banker and hedge fund manager Steven Mnuchin asking about foreclosures that took place on his watch, his ties to investors who could benefit from his oversight of Fannie Mae and Freddie Mac, and conflicts of interest that would face him as head of the Treasury.
“The American public deserves to know where Mr. Mnuchin stands on the important housing and finance issues that he will oversee,” Brown said in a statement.
In the letter, Brown probed Mnuchin about his management of OneWest, the bank that he purchased, with investors, from federal caretakers after it was bailed out in 2008. Under Mnuchin, the bank was accused of harsh and unfair foreclosure practices, including denying minorities loans. Brown asked Mnuchin to respond to both of those charges, and to detail how much assistance the bank got from the government.
The Ohio Democrat also asked about ties between Mnuchin and investors in Fannie Mae and Freddie Mac, which remain in government custody after being bailed out in 2008. At least one major Trump backer, the hedge fund manager John Paulson, is a big investor in Fannie and Freddie stock, which would soar in value if the government were to allow them to build up capital and return to the private sector.
Mnuchin suggested that he favored reprivatizing Fannie and Freddie in an interview after Trump said he intends to nominate him. Brown asked how his business and “social” ties to investors in the two businesses would influence his policies.
Brown’s letter is another sign that Mnuchin’s confirmation process may be among the most heated of Trump’s choices for his Cabinet. Senate Democrats have already begun rallying public opposition to Mnuchin, calling him a foreclosure king and soliciting stories from his former customers.
A spokesman for Mnuchin said that he had reached out to request a meeting with Brown several weeks ago, but that Brown has not yet accepted.
