Don Bauder

Don Bauder is a Reader contributor. See staff page for published articles.

Trump treasury pick Mnuchin tied to smelly banking

Fulano de Tal: What difference does it make that Mnuchin left Goldman Sachs in 2002? The point is that throughout his campaign, Trump blasted Hillary for her relationship with Goldman Sachs, then nominated his campaign manager, Mnuchin, a 17-year Goldman Sachs veteran, as treasury secretary. Trump's e-mail blasts had served to demonize Goldman Sachs. It interests me that Mnuchin spent his time at Goldman Sachs specializing in trading distressed bank assets. Then he left, spearheading a group of billionaires that got sweetheart deals from the FDIC for taking over scandal-plagued banks. IndyMac had specialized in shaky loans, and the inevitable happened when housing collapsed. So Mnuchin and his billionaire buddies induced the FDIC to give them a special deal for taking over the institution: subsidizing them for costs of foreclosing. So foreclosures zoomed. The group paid a very low $1.5 billion for the bank, and having raked in bucks from the "shared loss" agreement, sold it last year for $3.4 billion. When the bank, renamed OneWest, bought La Jolla Bank, it got another "shared loss" agreement. The Justice Department prosecuted a number of La Jolla Bank officials who admitted having set up loans that they knew would not be paid back. Yes, the FDIC claims that it is funded through premiums paid by banks and federal or state taxes are not involved. Ha! The Treasury Department investigated IndyMac, concluding that the Office of Thrift Supervision saw the bad loans but did little about them. The FBI investigated IndyMac. The Justice Department successfully prosecuted wrongdoers at La Jolla Bank. Taxpayers picked up the tab for this work by federal agencies. These slimy deals must be stressed when Congress holds hearings on Mnuchin. As a taxpayer, I will be happy to chip in for those investigations, in addition to chipping in earlier for the work of the Treasury and Justice Department in these dubious deals. Best, Don Bauder, delighted to be called "a hack."
— December 3, 2016 8:58 a.m.

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