A bitterly divided Senate on Monday confirmed Steven Mnuchin as treasury secretary, despite strong objections by Democrats that the former banker ran a “foreclosure machine” when he headed OneWest Bank.
Republicans said Mnuchin’s long tenure in finance makes him qualified to run the department, which will play a major role in developing economic policy under Donald Trump.
“He has experience managing large and complicated private-sector enterprises and in negotiating difficult compromises and making tough decisions and being accountable for those decisions,” said Senator Orrin Hatch, a Republican and chairman of the finance committee.
Votes on Trump’s cabinet picks have exposed deep partisan divisions in the Republican-controlled Senate, with many of the nominees approved by mostly party-line votes.
The vote on Mnuchin followed the same pattern. He was confirmed by a mostly party-line vote of 53-47. Democratic Senator Joe Manchin of West Virginia joined the Republicans.
Like others in Trump’s cabinet, Mnuchin is a wealthy businessman. He is a former top executive at Goldman Sachs and served as finance chairman for Trump’s presidential campaign.
As treasury secretary, Mnuchin is expected to play a key role in Republican efforts to overhaul the nation’s tax code for the first time in three decades. Trump has promised to unveil a proposal in the coming weeks.
Mnuchin will also be in charge of imposing economic sanctions on foreign governments and individuals, including Russia.
Senate majority leader Mitch McConnell said Mnuchin “is smart, he’s capable, and he’s got impressive private-sector experience”.
Democrats complained that Mnuchin made much of his fortune by foreclosing on families during the financial crisis.
In 2009, Mnuchin assembled a group of investors to buy the failed IndyMac bank, whose collapse the year before was the second biggest bank failure of the financial crisis. He renamed it OneWest and turned it around, selling it for a handsome profit in 2014.
“Mr Mnuchin has made his career profiting from the misfortunes of working people,” said Democratic Senator Debbie Stabenow. “OneWest was notorious for taking an especially aggressive role in foreclosing on struggling homeowners.”
Senator Sheldon Whitehouse, a Democrat from Rhode Island, said, “I simply cannot forgive somebody who took a look at that banking crisis and took a look at the pain that Wall Street had sent in a wave across all of America, and thought, ‘Ah, there’s a great new way to make money, foreclosing on people.”’
Congressman Maxine Waters of California, the top Democrat on the House financial services committee, called Mnuchin “the foreclosure king”.
Democrats also complained that Mnuchin failed to disclose nearly $100m in assets on forms he filed with the Senate finance committee.
In his testimony before the committee, Mnuchin defended his actions while heading OneWest. He said he had worked hard during the financial crisis to assist homeowners with refinancing so that they could remain in their homes.
He told the committee that his bank had extended more than 100,000 loan modifications to borrowers.
Mnuchin called his failure to disclose assets an oversight. After meeting with committee staff Mnuchin amended his disclosure forms and also disclosed his position as director of Dune Capital International in the Cayman Islands, a well-known offshore tax haven.
When pressed by Democrats to explain the omissions, Mnuchin said: “I did not use a Cayman Island entity in any way to avoid taxes for myself. There was no benefit to me.”
