WASHINGTON – President-elect Donald Trump is expected to name former Goldman Sachs partner and Hollywood financier Steven Mnuchin as his nominee for Treasury secretary, a source said on Tuesday, putting a Wall Street veteran in the top U.S. economic Cabinet post for the first time in eight years.
Mnuchin, who was Trump’s presidential campaign finance chairman, could be named as early as Wednesday, said a Republican source close to the decision.
Mnuchin was chosen over several high-profile candidates, including JPMorgan Chase Chairman Jamie Dimon and Republican Rep. Jeb Hensarling, chairman of the powerful House Financial Services Committee.
Mnuchin is the first person with Wall Street experience to head the Treasury since his former boss, Henry Paulson, the former Goldman Sachs CEO who served under President George W. Bush and steered Treasury through the chaotic initial stages of the 2008-2009 financial crisis.
The selection of Mnuchin was first reported by The New York Times.
A relatively little-known but successful private equity investor and hedge fund manager, Mnuchin spent 17 years at Goldman Sachs before leaving in 2002, when he launched Dune Capital Management.
With Dune, Mnuchin has invested in movies produced by Rupert Murdoch’s 20th Century Fox and Time Warner Inc’s Warner Bros, including blockbusters “Avatar,” “Mad Max: Fury Road” and “Suicide Squad.”
The son of a Goldman Sachs partner who became an art dealer, Mnuchin worked hard to step outside his father’s shadow and make a name for himself, former colleagues said, rising to become the firm’s chief information officer in 1999.
“He wanted to prove that he was there on the merits,” said a former Goldman colleague, who spoke on condition of anonymity.
Mnuchin’s experience running Goldman’s mortgage-backed bond trading desk would later prove valuable when an opportunity arose in 2009 to buy the deeply discounted assets of failed California mortgage lender IndyMac Bank from the Federal Deposit Insurance Corporation during the financial crisis.
He assembled an investor group that included hedge fund manager John Paulson to buy the assets for $1.55 billion, and moved to Los Angeles.
After rebranding the operation OneWest Bank, Mnuchin built it with other assets and professional sports team sponsorships into Southern California’s largest bank, with 73 branches and $23 billion in assets. His group sold OneWest to CIT Group Inc. last year for $3.4 billion.
But the bank came under fire for its foreclosure practices as housing advocacy groups accused it of being too quick to foreclose on struggling homeowners. In 2011, dozens of demonstrators descended on Mnuchin’s $26.5 million home in the wealthy Bel Air neighborhood to protest OneWest’s eviction tactics, according to the Los Angeles Times.
This month, two housing groups filed a complaint asking the U.S. Department of Housing and Urban Development to investigate complaints that OneWest engaged in discriminatory “redlining” practices against black and Latino communities.
Although Mnuchin has a reputation for being a behind-the-scenes player in Hollywood, he does appear on screen in the 2016 film “Rules Don’t Apply,” according to the IMDB movie database. The drama, opening in theaters Nov. 23, stars Warren Beatty, who also wrote and directed the film.
Trump is also expected to name Wilbur Ross, a billionaire known for his investments in distressed industries, to head the Commerce Department, a Republican source familiar with the decision told Reuters on Tuesday.
An announcement on Ross to lead the department, which pursues anti-dumping cases against cheap foreign imports, could come as early as Wednesday, NBC News said.
Ross declined comment to Reuters on Tuesday.
Ross, 78, a staunch supporter of Trump and an economic adviser, has helped shape the Trump campaign’s views on trade policy, blaming the 1994 North American Free Trade Agreement with Canada and Mexico and the 2001 entry of China into the World Trade Organization for causing massive U.S. factory job losses.
“I think there’s a big difference between the impact of trade agreements on corporate America and the impact on Mr. and Mrs. America,” Ross told CNBC in an interview earlier this year. “Corporate America has adjusted to them by investing lots of capital offshore.”
Ross, whose net worth was pegged by Forbes at about $2.9 billion, heads the private equity firm, W.L. Ross & Co. in New York.
Ross’ connections to Trump date back to 1990, when as a turnaround expert for Rothschild and Co. he worked on behalf of bondholders to help engineer a restructuring of hundreds of millions of dollars in debt owed on Trump’s Taj Mahal casino in Atlantic City, New Jersey.
In 2002, by then in charge of his own private equity firm, Ross formed International Steel Group to consolidate several bankrupt steelmakers, including Bethlehem Steel, Acme Steel and LTV Steel. He sold the company in a $4.5 billion deal two years later to Mittal Steel.
Ross retains a stake in what is now part of the world’s largest steel company, Arcelor Mittal, and sits on its board of directors.
His various business interests, which also include automotive components and textiles, could make avoiding conflicts of interest a complicated prospect as the head of an agency with broad influence over trade cases and U.S. industrial policies.
Arcelor Mittal has benefited from several recent anti-dumping and anti-subsidy duties imposed by the Commerce Department against a wide range of steel products from China, South Korea, Japan, Britain, Turkey and other countries. Those have helped lift domestic steel prices, boosting the company’s bottom line.
Ross may also face questions from lawmakers over the January 2006 Sago coal mine disaster in West Virginia that killed 12 miners in an explosion and collapse. Owned by a subsidiary of one of his companies, International Coal Group, the mine had been cited for more than 200 safety violations
International Coal was sold for $3.4 billion in 2011 to No. 2 U.S. coal miner Arch Coal, which filed for bankruptcy protection in January amid plummeting coal prices.
He could be questioned as well over a $2.3 million fine his firm agreed to pay in August to the Securities and Exchange Commission to settle accusations it did not properly disclose some fees that it charged investors.