TRUMP'S GOLDMAN SACHS CRONY
Goldman Sachs Bankster “King of the Foreclosures” Treasury
Secretary Steven Mnuchin vows that the Goldman Sachs infested Trump Admin will
hand no-strings massive socialist bailouts to Trump Hotels. Mnuchin says the
welfare will exceed the Bankster-owned Democrat Party’s massive bailout of
Obama crony Jamie Dimon of J P Morgan’s bailout in 2008
OBAMA CRONY DONORS Goldman Sachs, JPMorgan Chase, Bank of America and every other major US bank have been implicated in a web of scandals, including the sale of toxic mortgage securities on false pretenses, the rigging of international interest rates and global foreign exchange markets, the laundering of Mexican drug money, accounting fraud and lying to bank regulators, illegally foreclosing on the homes of delinquent borrowers, credit card fraud, illegal debt-collection practices, rigging of energy markets, and complicity in the Bernie Madoff Ponzi scheme.
Companies Return Virus Loans as Treasury Threatens Criminal Prosecutions
WASHINGTON (AP) — More than 40 public companies are pledging to return money to the government’s now that Treasury Secretary Steven Mnuchin is threatening criminal prosecutions for violating the rules of the program.
The administration has given companies until May 14 to give back money without penalty. It’s a key test for President Donald Trump’s administration as it tries to ensure the $600 billion-plus emergency lending program preserve jobs in an economy .
The challenge is considerable. The is pushing out unprecedented federal assistance at a rapid clip, but the pace of the program has raised questions about how thoroughly applications are vetted.
“You’ve got to do it both efficiently and responsibly, and it’s hard,” said James Thurber, a professor of government at American University who founded its Center for Congressional and Presidential Studies. He said Mnuchin “is using the bully pulpit to scare companies.”
Loans given to restaurant chains and the NBA’s Los Angeles Lakers The large loans left less money available for that applied.
Questions about the loans have led Mnuchin, a chief architect of the rescue plan, to take on the role of enforcer. He spoken of criminal prosecution and warned companies they must reimburse the Treasury if they falsely certified that they needed federal aid to operate and could not get it elsewhere.
The SBA also says it will audit every loan exceeding $2 million and if problems are found, it will withhold the program’s offer to forgive the loan.
“So anybody that took the money that shouldn’t have taken the money, one, it won’t be forgiven, and two, they may be subject to criminal liability, which is a big deal,” Mnuchin said in an interview on Fox Business Network.
According to the data analytics company FactSquared, had agreed as of Wednesday to return loans totaling $337.1 million. None explicitly mentioned the possibility of criminal prosecution as a reason for their decision.
In his warning, Mnuchin is probably leaning on a section of the U.S. criminal code that’s been used to prosecute companies and individuals for making false statements to federal agencies. Among those who’ve felt its sting: homemaking tycoon Martha Stewart and former Gov. Rod Blagojevich, D-Ill.
A recent found that at least 147 public companies received $555 million of the potentially forgivable loans. Some had market values well over $100 million, and many had executives earning millions annually.
National restaurant chains — Shake Shack, Ruth’s Chris Steakhouse and Potbelly Sandwich Shop — are among those that have committed to returning their loans. In securing the money, the chains had used an exception in the law allowing hotel and restaurant companies with more than 500 employees to receive help if they have fewer workers than that in any one location. All three said they could get money elsewhere.
Other companies aren’t giving up the money quietly. They blame the administration for what they call shifting and confusing rules.
The SBA and the Treasury Department issued new guidance on April 23, after the program was underway, stating that publicly traded companies with substantial market value and access to private sources of credit probably would not be certifying accurately that they qualified.
It was that change in the guidelines that prompted many of the 40 or so companies returning the money to do so, they said. The “returners” are out of more than 300 public companies that got an estimated $1.16 billion in loans under the Payroll Protection Program. Most have not said publicly what their plans are.
Ashford Hospitality Group and BK Technologies, a maker of two-way radios, criticized the Treasury Department for the revised guidelines. They said they believed they qualified under the original rules, then came the revisions creating “uncertainty” and “confusion.” So they said they were returning the money out of “an abundance of caution.”
Other companies are keeping their money. Biolase, a maker of dental lasers that has not reported an annual profit since 2003, said that “given the current economic situation” it doubts it could raise money in a stock sale to make up for lost revenue. As a company with 150 employees, well under the maximum allowed 500, Biolase believes it qualifies for the loan of just under $3 million that it received.
“The PPP was essential in helping maintain Biolase as a viable business moving forward,” the company said in an email response to an AP inquiry.
Some legal experts are skeptical of Mnuchin’s threat of criminal penalties. They say it is not a good way to recover taxpayer money that may have gone to big, deep-pocketed companies because of the government’s own missteps.
Stephen Gillers, a professor at New York University Law School who specializes in government ethics, says criminal punishment of companies “isn’t a promising route” for recouping money that may have been distributed as a result of the government’s incompetence.
“Any prosecution would have to prove that the recipients understood what the government was really asking with an ambiguous question and intentionally gave a misleading answer,” Gillers said.
The small business program opened with $349 billion on April 3. The money was exhausted in less than two weeks. Congress replenished the program with $310 billion for a second round starting last week.
Rep. Nydia Velazquez, D-N.Y., who heads the House Small Business Committee, said she welcomes more scrutiny of the loans. But she said the administration shoulders some of the blame for the problems.
“It doesn’t excuse that poor implementation and sloppy rulemaking likely allowed bad loans to be lent, depriving deserving small businesses of help,” she said.
Treasury
Secretary Steven Mnuchin embodies the plutocratic principle that a crisis is a
terrible thing to waste.
Treasury
Secretary Steven Mnuchin embodies the plutocratic principle that a crisis is a
terrible thing to waste.
Illustration: Joe Darrow
Steve Mnuchin knows his way around
a crisis. Twelve years ago, the Treasury secretary was still a middling
multi-millionaire of little renown or historical import. But whenever God
closes a door on an underwater home-owner, he opens a window to an unscrupulous
speculator, and in 2008, the Big Man began closing a lot of doors. Mnuchin
didn’t miss his opening. He may have been just a humble Goldman Sachs nepotism
hire turned Hollywood financier back then, but he had a few million dollars to
play with and a few friends with many millions more. Together, they bought up a
failing mortgage lender, rapidly foreclosed on thousands of borrowers, and
resold the homes at a nifty profit. By the end of his tenure as a bank CEO,
Mnuchin had earned himself the title “Foreclosure King” — and a return of $200
million. That’s the kind of money that can buy you entrance into the good
graces of a Republican nominee, especially if he’s already alienating a lot of
the party’s biggest donors. And from there, it’s walking distance to the White
House.
Thus far, the
COVID-19 crash has been as kind to Mnuchin as the Great Recession once was. If
the last global economic crisis made him rich enough to purchase a lofty perch
in our government, this one is making the Treasury secretary powerful enough to
claim a prominent place in U.S. history. Before the novel coronavirus made its
presence felt, Mnuchin’s most memorable achievement as a public servant may
have been commandeering a government plane for a solar-eclipse-themed day trip.
Since the pandemic sickened global markets, he has brokered the largest
stimulus legislation ever passed and won control of a multi-trillion-dollar bailout fund.
Which is to say:
We’ve put one of the primary beneficiaries of America’s inequitable response to
the last economic crisis in charge of crafting our nation’s response to this
one.
Of course, it wasn’t really God who
opened the window to Mnuchin’s foreclosure profiteering or the profiteering of
all the well-heeled investors who bought low during the financial crisis, then
sold high amid the bailout-buoyed recovery (the Almighty contracts out those
jobs to protect his brand integrity). Rather, it was an economic system that
keeps a wide swath of Americans one bad break from financial ruin — and another
tiny class draped in gold-plated armor.
From the first
capital-gains-tax cut of the modern era in Jimmy Carter’s day to the
supply-side bonanza of Donald Trump’s, this system’s essential rationale has
remained the same: If capitalists cannot reap big rewards from their winning
bets, they will have no incentive to take the great personal risks that fuel
collective prosperity.
Mnuchin’s career and
the pandemic response he has overseen belie most of that sentence’s premises.
In truth, the Treasury secretary owes his success to a series of low-risk,
high-reward bets of little-to-negative social value. Which makes sense. After
all, if America’s brand of capitalism actually required the superrich to assume
great personal risk in order to reap outsize returns, they wouldn’t be so
invested in it.
Steve Mnuchin wasn’t born on third
base so much as a few inches to the left of home plate. His grandfather co-founded
a yacht club in the Hamptons. His father was a Yale-educated partner at Goldman
Sachs. If his family’s name didn’t secure Steve’s own Yale admission, its
wealth certainly covered his tuition, books, personal Porsche, and “dorm” at
New Haven’s Taft Hotel. From this perch, it would have been harder for Mnuchin
to tumble down America’s class ladder than to climb higher still. The former
would have required prodigious acts of self-destruction; the latter mere
fluency in ruling-class social mores and the art of strategic sycophancy — and
the wallflower cipher Steve Mnuchin is a master of both.
At Goldman, Mnuchin’s
colleagues did not consider him “especially book smart.” And some have
suggested that his steady ascent at the firm was fueled less by merit than
pedigree (Mnuchin’s elevation to partner in 1996 came at the expense of Kevin
Ingram, an African-American trader who’d risen from a working-class childhood
up through MIT’s engineering school, then Goldman’s ranks, where he struck one
colleague as both “much smarter than Steven” and more “accomplished”).
After Mnuchin paid
his dues at Goldman, he founded a hedge fund called Dune Capital and a
motion-picture-financing company called Dune Entertainment (both named after a
stretch of beach near his house in the Hamptons). He helped bankroll Avatar and the X-Men
franchise, hobnobbed in Beverly Hills, and hoarded his investment profits in a
tax haven. He had everything America’s “temporarily embarrassed millionaires”
imagine a person could want. But Mnuchin longed for higher things. And when the
housing market collapsed, he knew he was in luck.
Early in his career,
Mnuchin had watched his superiors turn America’s savings-and-loan crisis into
their own buying-and-selling bonanza. In the summer of 2008, Mnuchin was
watching television in his New York office when an invitation to emulate his
old mentors flashed across the screen: Out in California, frightened depositors
were lined up outside IndyMac, one of the nation’s largest mortgage lenders,
waiting to withdraw their cash. “This bank is going to end up failing, and we
need to figure out how to buy it,” Mnuchin told a colleague. “I’ve seen this
game before.”
He played it like a
natural. Mnuchin reached out to George Soros, John Paulson, and other
billionaires whose trust he’d cultivated. They marshaled a $1.6 billion bid.
Eager to unload the bank — whose balance sheet was chock-full of toxic assets —
the FDIC agreed to cover any losses that might accrue to the investors above a
certain threshold. Which is to say, the government agreed to partially
socialize Mnuchin & Co.’s downside risk. This public aid came with one
major condition: The new bank, which Mnuchin dubbed OneWest, would need to make
a good-faith effort to help homeowners avoid foreclosure. The FDIC would
ultimately pay OneWest more than $1.2 billion.
This was not enough
to buy Steve Mnuchin’s good faith.
Purchasing IndyMac secured
OneWest a claim on a lot of undervalued housing. The catch, of course, was that
much of it was full of broke people. And California’s foreclosure laws make the
process of separating low-net-worth humans from high-value housing stock long
and arduous. But this was nothing a little entrepreneurship couldn’t solve:
Mnuchin’s bank (ostensibly) bet it could get away with “robo signing” and
backdating documents to expedite foreclosures. One-West got caught red-handed
on the first count but emerged with a slap on the wrist. Investigators at the
California attorney general’s office concluded the bank was guilty on the
second and requested authorization to pursue an enforcement action. It’s
unclear exactly why then–Attorney General Kamala Harris denied this request.
But as the investigators themselves noted, to pursue legal action against an
entity with OneWest’s resources would mean investing years of time — and large
sums of the public’s money — in a deeply uncertain enterprise. The government
could afford to take only so many risks, which meant the idea that the state
could hold all its superrich residents accountable to its laws was a bluff.
Mnuchin called it.
In the spring of 2016, another promising investment opportunity caught the eye of the
now-former One-West CEO. Mnuchin had crossed paths with Trump several times
over the years; his hedge fund had invested in (at least) two of the mogul’s
projects. So when Donald invited Steve to swing by his tower on the night he
won the New York primary, Mnuchin obliged. A dozenish hours (and a glass or two
of Trump-branded wine) later, Mnuchin agreed to become the finance chairman of
the future GOP nominee’s campaign.
This decision baffled
some of Mnuchin’s Hollywood pals. The bankroller of The LEGO Batman Movie didn’t strike them as a political animal, let alone a
Trumpist. But his motives weren’t mysterious. For someone in Mnuchin’s
socioeconomic position, Trump’s presidential campaign was just another
low-risk, high-reward bet. Or, as Mnuchin himself put it in an interview in August
2016, “Nobody’s going to be like, ‘Well, why did he do this?,’ if I end up in
the administration.”
Mnuchin is the last of the “adults
in the room” — that cabal of semi-credentialed advisers whose presence in the
West Wing eased the troubled minds of Never Trump pundits circa 2017. None of
the others — not Rex Tillerson, Gary Cohn, James Mattis, H. R. McMaster, or John Kelly — could marshal the requisite
combination of unscrupulous sycophancy and patient politicking to weather each
turn in Trump’s tempestuous moods. Only the former Foreclosure King has what it
takes to unequivocally defend the president’s kind words for alt-right marchers
in Charlottesville or echo his attacks on NFL players who dared to protest
police abuse. So when the biggest economic crisis since the Great Depression
hit, Mnuchin became — in The Wall Street Journal’s appellation — “Washington’s indispensable crisis manager.”
Unburdened by ideological conviction or economic literacy, Mnuchin has proved
to be the GOP’s most able dealmaker. Working out of a temporary office in the
Capitol’s Lyndon Baines Johnson Room, Mnuchin spent the closing weeks of March
running (and massaging) messages between the Senate’s Democratic and Republican
camps as they sought consensus on a gargantuan coronavirus relief bill.
“Mnuchin played the middleman, and he must have been in my office 20 times in
three days,” Senate Minority Leader Chuck Schumer told the Journal, going on to
praise the reliability of the Treasury secretary’s word. House Speaker Nancy
Pelosi has said that she and Mnuchin can communicate through a “shorthand”
devoid of time-wasting “niceties or anything like that.”
The soft skills
Mnuchin had once deployed to ink billion-dollar investment deals now eased the
passage of a $2.2 trillion economic-relief package. And there was much to
admire in the legislation’s headline provisions: an unprecedented expansion in
federal unemployment benefits that would leave many laid-off workers with as
much — if not more — income than they’d earned at their old jobs, forgivable
loans for small businesses that agreed to forgo layoffs during the crisis, and
onetime cash payments to all nonaffluent Americans.
But this is still a
Republican stimulus, however much schmoozing Steve has done with Chuck and
Nancy this spring. Congress’s persistent underfunding of the small-business aid
has kept America’s most vulnerable mom-and-pops out in the cold. And our
nation’s decrepit unemployment-insurance offices have struggled to administer
benefits as the ranks of the jobless grow millions stronger every week. The
Treasury Department has allowed debt collectors to garnish the relief checks of
cash-strapped Americans, and Congress has essentially refused to bail out
hospitals whose budgets have suddenly been destroyed by COVID-driven
shortfalls, meaning that over the next few years, whole essential health
systems and services could abruptly be suspended.
Most of all, the
legislation’s largest appropriation — $454 billion to backstop a $4 trillion
Federal Reserve lending program to large corporations — gives Mnuchin
significant personal discretion over which firms will have access to low-cost
credit and on what terms, thereby leaving a connoisseur in the art of
subverting federal crisis management for personal profit in charge of
preventing America’s corporate titans from subverting federal crisis management
for personal profit.
The White House’s
next big idea for promoting economic recovery is, reportedly, to formally
suspend the enforcement of labor and environmental regulations on small
businesses, a measure that would enable petit bourgeois tyrants to suspend all
pretense of concern for their workers’ health and well-being in the midst of a
pandemic.
Nevertheless, could
we have reasonably expected anything better, all things considered? A GOP
president and Senate majority were always going to comfort the comfortable and
toss crumbs to the afflicted. And when Congress approved $2.2 trillion in
coronavirus relief funds last month, nurses were intubating patients without
proper PPE, grocery-store clerks were jeopardizing their health to keep others
fed, and delivery drivers were forfeiting the security of social distancing so
others could more comfortably enjoy it. The legislation included zero dollars
in hazard-pay benefits for those workers. It did, however, provide $90 billion
in tax cuts to the owners of pass-through businesses, such as, for instance,
the Trump Organization. Such “relief” was necessary, the American Enterprise
Institute later explained, to mitigate the “penalty” on economic risk-takers.
Mnuchin Courts Goldman Advisers to
Oversee $200 Billion Bailout
By
Saleha Mohsin
and
Sridhar Natarajan
Fed Expertise
‘Government
Sachs’ Reunites When Mnuchin Dines With Goldman Pals
By
Max Abelson
and
Sridhar Natarajan
Then
Congress rushed through a record $2.2 trillion economic “rescue” bill, whose
main purpose was to provide the Treasury and the Federal Reserve the necessary
authority to bail out corporate America and Wall Street.
Coronavirus deaths in US nearing 4,000 as Trump washes his hands of
responsibility
Mnuchin Courts Goldman Advisers to
Oversee $200 Billion Bailout
By
U.S Treasury Secretary Steven Mnuchin
is seeking to tap executives from Goldman Sachs Group Inc. and other Wall Street firms to help oversee more than $200 billion in bailout packages that the Trump
administration is proposing to ease the economic damage of the coronavirus
outbreak, people familiar with the matter said.
Mnuchin’s team is considering executives with broad experience to
help administer loans to airlines, hotels and other industries suffering as the
virus shuts down parts of the economy, the people said. The government is also
considering taking equity stakes in some companies in exchange for aid, a
program that financiers and bankers could administer.
Spokesmen for the Treasury didn’t reply to a request for comment.
Goldman declined to comment.
The White House and Democrats are negotiating with Senate
Republicans over a GOP draft stimulus bill that would create the bailout
program. Senate Majority Leader Mitch McConnell has said he’d like to hold a
vote on Monday.
During the last global financial crisis more than a decade ago,
Treasury secretaries Hank Paulson and Tim Geithner brought in additional staff,
including prominent Wall Street figures, to help manage the bailouts of U.S.
banks and auto companies.
Fed Expertise
Mnuchin is also looking for expert guidance as the Treasury
Department works closely with the Federal Reserve. Mnuchin this week authorized
the Fed to launch four separate emergency lending programs to keep cash flowing
into the U.S. economy.
The Fed is expected to launch more crisis-level programs that will
require authorization and help from the Treasury Department, which would have
to group individual companies in travel-related industries together to make them
eligible for Fed assistance. President Donald Trump has already singled out
Boeing Co. as needing government assistance in some form.
Mnuchin’s Treasury Department is
short-staffed. It has more than half a dozen vacancies in its senior political
ranks. The domestic finance department, which oversees the $16 trillion Treasuries market amd the Financial
Stability Oversight Board, has no undersecretary.
Deputy Secretary Justin Muzinich has been overseeing the unit
since June when Craig Phillips departed as a counselor. Muzinich is also
serving as acting undersecretary of the Treasury’s sanctions unit.
‘Government
Sachs’ Reunites When Mnuchin Dines With Goldman Pals
By
Picture this: Treasury Secretary
Steven Mnuchin at a dinner table in New York, surrounded by Hank Paulson, Jon
Corzine and Gary Cohn, along with David Solomon. It’s not a Bernie Sanders
nightmare -- just the Goldman Sachs alumni dinner.
Goldman Sachs Group Inc. and
governments worldwide have a long history of swapping senior leaders, earning
the bank the nickname “Government Sachs.” But the firm often takes pains not to
look too chummy with its friends in high places.
That’s why some Goldman veterans said they were surprised last
month when Treasury Secretary Mnuchin, who has led the administration’s efforts
to reshape financial regulation, attended the firm’s annual dinner for retired
partners in New York’s Hudson Yards. While sitting in public office, especially
in positions that allow them to oversee Wall Street, former executives have
tended to avoid the soiree.
Mnuchin requested clearance to attend the dinner and received it,
according to a spokesman for the Treasury Department, who said he was there in
a personal capacity. A Goldman Sachs spokesman declined to comment.
The Goldman alumni dinner is less a college reunion and more a way
to maintain ties between executives who’ve moved on to some of the most
powerful spots in banking, private equity, hedge funds and government.
Mnuchin, who left the firm in 2002,
was one of the dinner guests who’ve helped shape American policy in the 21st
Century. Paulson was Treasury Secretary at the depths of the financial crisis,
Corzine was a U.S. Senator and governor of New Jersey, and Cohn was the first
director of President Donald Trump’s National Economic Council. They were joined by Solomon, the
bank’s chief executive officer, and Lloyd Blankfein, his predecessor.
Sanders and Elizabeth Warren, both senators, are among the
Democratic presidential candidates who have criticized the bank. Trump
recruited the firm’s veterans for his administration even after one of his 2016
campaign ads showed Blankfein’s face as the candidate’s voice warned about a
corrupt global power machine.
Then
Congress rushed through a record $2.2 trillion economic “rescue” bill, whose
main purpose was to provide the Treasury and the Federal Reserve the necessary
authority to bail out corporate America and Wall Street.
Coronavirus deaths in US nearing 4,000 as Trump washes his hands of
responsibility
The
coronavirus killed at least 812 people in the United States Tuesday, the
highest death toll since the pandemic began, while nearly 25,000 new cases were
reported, bringing the total number infected to more than 188,000, the largest
number in the world by far.
Along
with the unprecedented scale of the infection, its sheer speed is staggering.
On March 10, there were only 1,000 reported coronavirus infections in the
United States. Three weeks later, it is nearing 200 times that level. Another
such three weeks would see 40 million people infected in the United States.
The US
death toll has not yet reached the level of Italy (12,428) or Spain (8,464),
but that is only a matter of days. And White House officials continue to
escalate their projections of the total number of deaths in a “best-case”
scenario, setting the figure at a staggering 240,000, with Trump himself
hinting that the total could be double that.
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