Donald Trump’s newly-appointed national finance chairman, Steven Mnuchin, ran a bank that made billions of dollars off of taxpayer bailouts and cost the federal government an estimated $13 billion.
Mnuchin, a hedge-fund manager, worked as a partner for Goldman Sachs before assembling a group of billionaires to take over IndyMac Bank, based in California, after its subprime mortgage business collapsed in 2008.
Mother Jones reported:
Mnuchin’s group paid roughly $1.55 billion and received a promise from the [Federal Deposit Insurance Corporation] FDIC to cover a portion of the losses on bad loans within the IndyMac pool. The FDIC’s losses on these assets have since ballooned to an estimated $13 billion. The FDIC took on most of the risk, but Mnuchin and his partners, who named their new bank OneWest, ended up doing spectacularly well. They parlayed their $1.55 billion investment into a $3.4 billion payday last year, when Mnuchin engineered the sale of OneWest to another California bank, CIT. Along the way, OneWest issued more than $2 billion worth of dividends to shareholders. The tremendous profits the bank made, with taxpayers on the hook for IndyMac’s bad bets, raised eyebrows across the industry.
Furthermore, OneWest has been accused of risky and predatory loan practices, which prompted California community groups and a legal aid agency to ask Federal Reserve Chair Janet Yellen to halt the sale of OneWest to CIT last year before the bank paid reparations.
Trump’s criticism of big banks, Wall Street, and hedge-fund managers appears to conflict with his appointment of Mnuchin to a top post in his campaign.
Last year, Trump characterized hedge fund managers as "paper pushers" who are "getting away with murder" by not paying their fair share of taxes under the current tax code.
"The hedge fund guys didn’t build this country. These are guys that shift paper around and they get lucky," Trump said during a phone interview televised on CBS News. "They are energetic. They are very smart. But a lot of them--they are paper-pushers. They make a fortune. They pay no tax. It’s ridiculous, OK?"
Mnuchin’s contributions to Democrats further complicate his position on the presumptive GOP nominee’s campaign. Mnuchin has contributed thousands to committees supporting Hillary Clinton, Barack Obama, and other Democratic politicians, the Washington Free Beacon reported Thursday.
"Steven is a professional at the highest level with an extensive and very successful financial background," Trump said in a statement announcing Mnuchin as his finance chair. "He brings unprecedented experience and expertise to a fundraising operation that will benefit the Republican Party and ultimately defeat Hillary Clinton."