Senate panel approves Mnuchin for Treasury secretary after Republicans change the rules
The Senate Finance Committee advanced Steve Mnuchin’s nomination for Treasury secretary Wednesday after Republicans changed rules to stymie a boycott by Democrats. The panel approved Mnuchin despite sharp objections from Democrats about the wealthy Wall Street executive’s tenure as head of Pasadena’s OneWest Bank and a dispute over whether he misled the panel in answering questions about foreclosures.
The committee approved Mnuchin’s nomination by a 14-0 tally; the next step for him is a vote by the full Republican-controlled Senate. The committee also voted 14-0 on Wednesday to approve the nomination of Tom Price to be secretary of Health and Human Services.
The two are among President Trump’s most controversial Cabinet nominees. And the votes came after Republicans changed committee rules allowing the vote to take place with no Democrats present.
Democrats had boycotted a Tuesday committee meeting, scuttling plans for votes on Mnuchin and Price because of allegations they gave false answers to senators’ questions.
The boycott was cheered by liberal activists but infuriated Senate Finance Committee Chairman Orrin Hatch (R-Utah), who called the tactic “pathetic” and Democrats “idiots.”
Committee rules require at least one member from each party to be present for a meeting. But the committee’s Republicans changed the rules Wednesday to allow for confirmation votes, Hatch said.
“We took some unprecedented actions today due to the unprecedented obstruction on the part of our colleagues,” Hatch said.
Democrats wrote to Hatch on Wednesday requesting Mnuchin and Price “submit complete, accurate responses to repeated requests for information.”
Democratic senators said Mnuchin misled the committee in his response to written questions about foreclosures after his contentious Jan. 19 confirmation hearing.
They cited a report Sunday by the Columbus Dispatch that said Mnuchin denied OneWest engaged in “robo-signing” of mortgage documents. The paper said its analysis of nearly four dozen foreclosure cases in Ohio’s Franklin County in 2010 showed that the bank “frequently used robo-signers.”
The practice, prevalent throughout the mortgage industry in the aftermath of the financial crisis, involved employees at financial firms signing foreclosure documents en masse without properly reviewing them.
The Columbus Dispatch cited a foreclosure involving a mortgage signed by Erica Johnson-Seck, a OneWest vice president who said in a deposition in a 2009 Florida case that she signed an average of 750 documents a week.
Barney Keller, a spokesman for Mnuchin, said Monday that several courts had dismissed cases involving allegations of robo-signing by Johnson-Seck.
“The media is picking on a hard-working bank employee whose reputation has been maligned but whose work has been upheld by numerous courts all around the country in the face of scurrilous and false allegations,” Keller said.
“It is a vague label casually thrown around to refer to a broad set of practices,” Hatch said. “Therefore, any question that simply throws out the term without specifically explaining what is meant by it is not only poorly written, it is inherently vague.”
In their request to Hatch for more information from Mnuchin, they referred to a regulatory definition of robo-signing.
Democrats have accused Mnuchin of foreclosing on the homes of thousands of struggling Americans while he was the head of OneWest from 2009 to 2015 while at the same time helping rich hedge fund clients shelter their wealth offshore.
Democrats complained that Mnuchin has failed to provide senators with detailed foreclosure information.
Mnuchin has blamed the large amount of foreclosures on bad loans inherited from IndyMac Bank. Mnuchin and other investors put up nearly $1.6 billion to buy IndyMac and renamed it OneWest. They sold the bank to CIT Group in 2015 for $3.4 billion.
Mnuchin, who spent 17 years at Goldman Sachs Group Inc. before going into the hedge fund business, would be the third former executive of the prominent Wall Street firm to become Treasury secretary in recent years, following Robert Rubin under President Clinton and Henry M. Paulson under President George W. Bush.
Mnuchin also would join other Goldman alumni in the Trump administration, including Steve Bannon, the president’s chief strategist, Anthonoy Scaramucci, a senior White House advisor, and Gary Cohn, director of the National Economic Council.
The 54-year-old hedge fund manager and former Hollywood movie producer served as Trump’s campaign finance chairman. If confirmed, he would be a key player in the administration’s plans to boost economic growth by reducing taxes and regulations.
Democrats also have problems with Health and Human Services nominee Price, a six-term congressman and former orthopedic surgeon who has distinguished himself in conservative circles for his staunch opposition to the Affordable Care Act and his plans to slash federal healthcare spending.
His nomination has become among Trump’s most controversial, in part because of his hostility to government safety net programs, including Medicaid and Medicare.
Democrats have also been critical of Price’s extensive trading in healthcare stocks while he has been in Congress, and in some cases while he has pushed legislation that would benefit his portfolio.
Price has denied any wrongdoing.
Also drawing criticism was Price’s purchase of discounted shares in an Australian biotech firm, Innate Immunotherapeutics, which the Wall Street Journal says he was offered through a private deal not available to general shareholders.
Price denied that his purchase of the shares was improper, and Senate Republicans have rallied to his side, saying he did not violate any ethics rules.
Staff writer Noam Levey contributed to this report.
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