This Is Still Happening: Steven Mnuchin

An ongoing roundup of Trump administration malfeasance…

In 2008 the Office of Thrift Supervision closed IndyMac, appointed the #FDIC as receiver, created IndyMac Federal, and appointed the FDIC as conservator (FDIC-C) of IndyMac Federal. #OneWest Bank then purchased #IndyMac @stevenmnuchin1 https://t.co/QGWyUbcjoa #DeutscheBank pic.twitter.com/wlBvvlIxBv

— LawsInTexas (@lawsintexasusa) October 15, 2019

The State Commission on Judicial Conduct should be embarrassed by the wrist slap it gave 3 current and eight former Harris County #judges who routinely denied no-cost bail to thousands of poor defendants between 2009 and 2017. #ethics #AuditTexas #Houstonhttps://t.co/23mnNsa8vp pic.twitter.com/XTcwRZtmKE

— LawsInTexas (@lawsintexasusa) October 14, 2019

This Is Still Happening is a new feature in which Slate will attempt to offer an update on Cabinet-level corruption, what could be done to bring the officials to account, and what Democrats are doing in response (generally, nothing). The second installment is about a figure who has been at the center of many Trump-era scandals, Steven Mnuchin.

The Official: Secretary of the Treasury Steven Mnuchin

What Is Still Happening: Mnuchin has been implicated in many, many, many scandals—big, medium, and small—since President Donald Trump first nominated the former Goldman Sachs chief information officer, hedge fund manager, foreclosure specialist, and film executive to be secretary of the treasury. He has been most recently in the news not for any of that early-term malfeasance, but for his current and ongoing efforts to cover up Trump’s tax returns.

In April, House Ways and Means Committee Chairman Richard Neal issued a formal request to the Internal Revenue Service for Trump’s tax returns under a 1924 update to the tax code, which commanded that “upon written request” from the chairmen of the relevant committees, the Treasury “Secretary shall furnish such committee with any return or return information specified in such request.”

Mnuchin, fulfilling an earlier promise to defy any such request, responded in May that he would not be furnishing the tax returns as the statute obligated. This came after Mnuchin acknowledged that his department had communicated with the White House about how it should handle the issue. As the Washington Post noted, the tax request “process is designed to be walled off from White House interference, in part because of corruption that took place during the Teapot Dome scandal in the 1920s.” Oh, well!

In his response to Neal, Mnuchin argued that he could ignore both the spirit and the letter of the law, making an unsupported claim that the request for tax information “lacks a legitimate legislative purpose.” Even though the law says that “the Secretary shall furnish” the requested tax information, no questions asked, Neal had offered a legitimate legislative purpose for the request, namely to ensure that IRS policies subjecting presidential tax returns to “mandatory examinations” were being carried out properly.

That legislative purpose only grew more urgent this past July when, according to a letter Neal sent Mnuchin in August, a federal whistleblower presented the committee with “credible allegations of ‘evidence of possible misconduct’—specifically, potential ‘inappropriate efforts to influence’ the mandatory [presidential and vice presidential] audit program.”

On Thursday, the Washington Post reported that the whistleblower was an IRS official who reported that he was told that at least one Treasury Department political appointee attempted to interfere in the mandatory audit of the president’s or vice president’s returns.

Mnuchin’s refusal to turn over requested tax returns in direct violation of the law should clearly be a really big deal! Besides Neal’s stated legislative purpose, there are open questions about whether foreign-backed lenders provided financing to Trump at a time when the self-declared bankruptcy king struggled to entice other lenders, and the returns could clarify to what extent foreign actors might have financial leverage over the president. Further, because he failed to divest from his businesses, a tax return could illuminate how much money Trump continues to receive from foreign governments potentially seeking to curry his favor in direct violation of the Constitution’s foreign emoluments clause. The returns could also help Congress find out if the president cheated on his taxes. Finally, all of this could be part of a case for impeachment.

But it would be unfair to Mnuchin to focus strictly on his misconduct as an appendage of the president’s misconduct. The treasury secretary has done plenty of sketchy to unlawful things on his own, in apparent service of his own interests. Whether helping himself or his boss, he’s accumulated a remarkable list of grifting accomplishments:

Before Mnuchin’s confirmation he acknowledged that he had failed to disclose to the Senate Finance Committee nearly $100 million in assets, as well as his role as a director of an investment fund incorporated in the Cayman Islands, a notorious tax shelter.

As part of that confirmation process, Mnuchin lied to Congress: He denied that under his management, OneWest Bank—an institution that specialized in foreclosures in the aftermath of the financial crisis—had participated in the practice of “robo-signing” foreclosure documents without doing the necessary diligence. Contrary to Mnuchin’s Senate testimony, a former vice president of OneWest testified in court that she signed 750 foreclosure documents a week without reviewing many of them; that she took 30 seconds per document; and that she had “changed my signature considerably” to accommodate her OneWest signing practices, adding that “it’s just an E now.”

It’s worth noting that shortly after Mnuchin entered office, the bank offered $89 million to settle claims that it had abused the foreclosure process. Just one example of that abuse involved the firm’s attempts to foreclose on the home of a 90-year-old woman who had made a 27-cent payment error. Mnuchin and his fellow investors, for their parts, made $1.6 billion in the 2009 deal to take over the failed bank that would become OneWest, and Mnuchin personally took a $10.9 million payout after OneWest merged with a different bank in 2015.

Mnuchin was chastised in early 2017 by career ethics officials for violating laws against self-dealing when he promoted The Lego Batman Movie, which was financed by his production company.

Earlier this year, that same federal ethics watchdog agency refused to certify Mnuchin’s 2018 financial disclosure after it learned that he had “sold” his stake in a film production business to his then-fiancée and current wife, Louise Linton.

This “sale” came after Mnuchin signed an ethics agreement promising to divest from the company.

Linton was a key player in a separate scandal involving the secretary. In 2017, she posted Instagram photos of herself disembarking from a military plane in Kentucky just prior to a solar eclipse, including the hashtags for high-end fashion brands that she was wearing at the time. When a mother of three from Portland, Oregon, posted a comment on Linton’s Instagram page expressing dismay over the fact that taxpayers had funded what seemed like a personal glamour trip, Linton responded:

Aw!!! Did you think this was a personal trip?! Adorable! Do you think the US govt paid for our honeymoon or personal travel?! Lololol. Have you given more to the economy than me and my husband? Either as an individual earner in taxes OR in self sacrifice to your country? I’m pretty sure we paid more taxes toward our day “trip” than you did.

What great #patriotism!

Linton’s question about government-funded honeymoon travel was more than rhetorical: It was later reported that Mnuchin had requested use of a government jet for himself and Linton to travel on their 2017 European honeymoon, but the request had been denied. It was also later reported that between the spring and fall of 2017, Mnuchin had taken eight trips on military aircraft, costing taxpayers $1 million, when he could have flown commercial airlines as had been the practice of his predecessors, and with his wife as his regular flight companion. (Linton recently joked about having been described as the “Marie Antoinette, Darth Vader, and Cruella de Vil” of the Trump administration entourage.)

Mnuchin managed to entangle himself in perhaps the most convoluted scandal of the Trump presidency: the Russia affair. As lawmakers left town for the winter holidays last year, Mnuchin announced a decision to undo sanctions against Oleg Deripaska, a Vladimir Putin–aligned Russian oligarch at the center of the Mueller investigation. Special counsel Robert Mueller would find that Deripaska had been promised “private briefings” and had likely been provided Trump internal polling data by former Trump campaign chairman and current federal prison inmate Paul Manafort. But Mnuchin determined that congressionally approved sanctions against Deripaska should be significantly lessened. Mnuchin also reportedly misled Congress about the terms of the deal the Treasury Department struck with Deripaska to cut those sanctions. Mnuchin also failed to address his own conflict of interest revolving around a direct business connection to a top shareholder at Deripaska’s firm. No collusion, though!

Mnuchin was accused of using his Jewish identity to help shield the president after Trump said there were “very fine people” among the attendees of a white supremacist rally in Charlottesville, Virginia, that included participants who wielded flaming torches and chanted neo-Nazi slogans.

Mnuchin postponed the Treasury Department’s previously announced move to put abolitionist and Underground Railroad conductor Harriet Tubman on the $20 bill, reportedly because he understood the change would upset the president, who is a big fan of the current face of the $20 bill, virulent racist Andrew Jackson.

How Long It Has Been Going On

Mnuchin’s abuse of corporate positions of power stretches back at least a decade, as evidenced by the validated charges of foreclosure misconduct against OneWest. He extended his corruption to the public sector the moment he set out to enter government service in late 2016, through his lies and withholding of information during his confirmation process, and began abusing his office in the first months after he’d obtained it. His latest efforts to cover up Trump’s tax returns can be dated at least back to March, when he promised that he would “protect the president” before the request for Trump’s returns had even been made.

What Would Normally Happen

Normally, the president would just hand over his tax returns, as every previous modern candidate had done prior to Trump. Because there’s no precedent for what Trump has done, it’s hard to think of a parallel case and a “normal” response. After the Teapot Dome scandal, Congress tried to solve the problem of the executive branch preventing congressional financial investigations and blocking access to tax returns—in that case, it had been Mnuchin predecessor at the Treasury Department Andrew Mellon who had come under scrutiny—by passing the law saying that the secretary “shall furnish” requested returns. But Mnuchin is simply ignoring that law.

As for Mnuchin’s various conflicts of interest, self-dealing, and ethics lapses, that’s also a highly unusual situation. There’s no real enforcement mechanism on those issues aside from impeachment. As the Times noted of the failure to get his 2018 disclosure certified following the revelations that he had attempted to “divest” one of his investments by “selling” it to Linton:

It is extremely rare for cabinet officials to not have their financial records certified, said Virginia Canter, a former senior ethics counsel at the Treasury Department. In 2001, Paul H. O’Neill, President George W. Bush’s Treasury secretary, divested his holdings in Alcoa, an aluminum producer, because of conflicts of interest.

Of course, all of this is nothing compared with the president’s own failure to divest from his businesses, which is perhaps why Mnuchin’s conflicts might not matter so much to the public.

In regard to the apparent abuses of government resources surrounding the $1 million in noncommercial travel, there is some very recent precedent there. Trump’s first health and human services secretary, Tom Price, was forced to resign that job for spending $400,000 on private planes for official business travel. Apparently, though, the norm that abuses of government resources might result in removal from office or resignation only applied to the first couple of Trump Cabinet officials who were caught doing that.

What Democrats Have Done

Issued stern verbal warnings, sent out subpoenas, and gone to court. None of these efforts have accomplished anything so far. Given the breadth and scope of Mnuchin’s abuses, the Democratic timidity in confronting him seems particularly pathetic.

That timidity is not relegated just to the House of Representatives. Shortly after she entered federal office, Sen. Kamala Harris of California struggled to explain why she had failed to prosecute OneWest Bank’s foreclosure violations as California attorney general back in 2013.

Senate Democrats, meanwhile, tried to vote to overturn the Deripaska sanctions relief with the support of many Republicans, but Majority Leader Mitch McConnell blocked that effort. Sen. Ron Wyden, for his part, has been harshly critical of Mnuchin’s various past abusive business practices and more recent violations of federal ethics statutes, but nobody has actually done anything about either of those issues.

As for the tax returns, Neal has taken a route that even many of his colleagues in the generally sheepish Democratic caucus have found to be meek. In May, after Mnuchin refused to hand over Trump’s tax returns as required by law, Neal escalated by issuing a subpoena. A week later, when Mnuchin said he would not be complying with the subpoena, Neal decided not to seek to hold him in contempt of Congress, but instead simply went to court. “I don’t see what good it would do at this particular time,” Neal told CNN, when asked about contempt. “I think that if both sides have made up their minds, better to move it over to the next branch of government, the judiciary.”

The case landed in front of Trump-appointed D.C. District Judge Trevor McFadden, and when Neal requested that the case be fast-tracked because of the urgency of the matter, McFadden said no.

Meanwhile, Neal said earlier this month that he hadn’t determined yet whether to even release the whistleblower complaint about the alleged abuse of the audit system to the public. He also couldn’t say whether an allegation of political interference in the audit process, on top of the total nullification of the law requiring tax records be turned over to his committee, on top of Mnuchin ignoring congressional subpoenas, deserved being drawn into the Democrats’ newly launched impeachment inquiry.

“That’s hard to speculate about,” Neal said. “I think that certainly you believe as we go down this road, that the inquiry could entail a lot of different things. You can see, I’m very guarded about what I have to say because this is an active court case.” Fellow lawmakers are apparently growing impatient with Neal’s handling of the whistleblower complaint, with one telling the Post that Neal had “been almost entirely silent about the whole matter” in private meetings with Democrats on his committee.

Great work, Richard Neal!

What Is Likely to Be Done

As with the Ukraine scandal, Democrats could play their one big card and initiate impeachment proceedings against Mnuchin. They could also consider exercising their long-dormant inherent contempt powers, perhaps in new ways such as issuing fines, though such fines might be impossible to enforce and also would likely be a drop in the bucket to Mnuchin. It seems unlikely that they will do either of these things. You would think that Trump’s tax returns would be a critical part of any impeachment inquiry, but so far they’re not critical enough for the Democrats to really fight for them.

One thing Democrats might—and should—do about Mnuchin is this: make sure he at least answers for whatever his role might have been in the Ukraine scandal. Mnuchin has said repeatedly that he wasn’t on the call on which Trump pressured Ukraine’s president to investigate his political rival Joe Biden (Mnuchin argued against releasing the summary of that call and claimed publicly “it was largely a congratulatory call” before that release showed otherwise). He has, however, said that he was involved in the process of blocking $250 million in military aid to Ukraine while Trump’s pressure campaign was happening. Mnuchin has further claimed “there was no connection” between the military aid being withheld and the pressure campaign to investigate Biden.

If House Democrats have any sense, they’ll subpoena the treasury secretary for documents related to his work on the aid issue and seek to compel him to testify on the things he has already discussed publicly. Do they have any sense? We’ll see!

How Impeachable This Stuff Is: Mnuchin’s involvement in Trump’s scandals and ability to participate in his own personal ones seems nearly unsurpassed in this administration. 8 out of 10.

Wilbur Ross @SecretaryRoss Puffed Up Bill Erbey and then Criminally Sold His Ocwen Stocks via Insider Trading Knowledge. @MarthaStewart wasn’t so lucky #TrumpCabinet – https://t.co/7UEJVkTULH

— LawsInTexas (@lawsintexasusa) June 17, 2020