- Title: U.S. Treasury nominee Mnuchin hammered over offshore tax havens
- Date: 19th January 2017
- Summary: WASHINGTON, D.C. UNITED STATES (JANUARY 19, 2017) (UNRESTRICTED POOL) SIDE SHOT OF SENATE FINANCE COMMITTEE (SOUNDBITE) (English) TREASURY SECRETARY NOMINEE STEVE MNUCHIN SAYING: "All can appreciate filling out these government forms is quite complicated. There were many things I expected in this job, including having to sell everything. But the amount of paperwork and filling out the forms, even for me having experience in business, was was quite a job -- in an effort to get the committee information early. We submitted a preliminary questionnaire prior to us having the 278 form finished and prior to signing the agreement with the ethics office, so let me first say any oversight it was unintentional. You did mention that there was $100 million of real estate. I was advised by my lawyer that we didn't need to disclose that on the questionnaire because it didn't need to be disclosed on the 278. There was some confusion about the complexity. We worked tirelessly with the committee staff and I want to thank all the staff. I know they worked very very long hours as I said they were extremely thorough, I appreciate their work. We delivered over 5000 pages and I can assure you they actually read all those five thousand pages because when I had the opportunity to meet with the staff, with my lawyers and accountants, we answered some very specific from very specific questions." SHOT OF SEN. DEBBIE STABENOW (D-MI) LISTENING (SOUNDBITE) (English) TREASURY SECRETARY NOMINEE STEVE MNUCHIN SAYING: "Well let me just be clear again. I did not use a Cayman Island entity in any way to avoid taxes for myself. I paid U.S. taxes on all that income. OK. So there was no benefit to me from the Cayman entity as I said the Cayman entity was set up to accommodate nonprofit and pension funds that want to invest through offshore and a certain number..." SIDE SHOT OF COMMITTEE HEARING (SOUNDBITE) (English) TREASURY SECRETARY NOMINEE STEVE MNUCHIN SAYING: "They didn't avoid. They followed the law because I have experience as a hedge fund manager. I am committed to tax simplification. I think it makes no sense that we would encourage hedge fund manager to set up entities in the Cayman Islands...or anywhere else where, as you pointed out, I didn't have any physical people. This is not like there are people who set up offshore businesses and put all their people offshore. And you've heard of inversions and those types of things you know are perfectly legal and hurt the American workers. These are all just set up to make the accountants rich. And I would look to work with the IRS to close these tax issues that make no sense and make sure that we're collecting the proper amount of taxes." WIDE SIDE SHOT OF COMMITTEE (SOUNDBITE) (English) TREASURY SECRETARY NOMINEE STEVE MNUCHIN SAYING: "I would support changing the tax laws to make sure that there are simpler and more effective. Yes." WIDE SHOT OF COMMITTEE MNUCHIN GETTING UP
- Embargoed: 2nd February 2017 21:21
- Keywords: Mnuchin confirmation hearing Caymen Islands offshore tax havens
- Location: WASHINGTON, D.C., UNITED STATES
- City: WASHINGTON, D.C., UNITED STATES
- Country: USA
- Topics: Budget/Taxation/Revenue,Government/Politics
- Reuters ID: LVA0015ZR1GEF
- Aspect Ratio: 16:9
- Story Text: U.S. Treasury Secretary nominee Steven Mnuchin said on Thursday (January 19) he would work to eliminate the need for offshore tax havens, as Democratic senators accused the Wall Street veteran of using such vehicles to shelter hedge fund money from the government.
In a confirmation hearing before the Senate Finance Committee, President-elect Donald Trump's pick to lead the Treasury was attacked for failing to promptly disclose he was a director of an offshore business vehicle domiciled in the Cayman Islands and owned more than $100 million in real estate.
Offshore tax havens used to shield income have become a symbol of the growing divide between rich and average Americans. Democrats seized on the disclosures, made late on Wednesday, to question Mnuchin's qualifications to revamp the tax code.
Mnuchin, a former Goldman Sachs executive, hedge fund manager and Hollywood film financier, said he moved his Dune Capital Partners LLC registry to the Caymans to allow for some pension fund clients to invest in his funds, not to avoid taxes.
But Mnuchin, 54, added that it "makes no sense" for the U.S. tax code to encourage the use of such entities. "In the hedge fund world these are only set up to make the accountants rich and I would love to work with the IRS to close these tax issues that make no sense."
Among the incoming Trump administration's top economic priorities is a massive tax reform effort aimed at lowering rates for businesses and individuals and closing many deductions and credits.
Mnuchin, who insisted his last-minute disclosures were not intentional but due to the complexity of his holdings, complicated federal forms and a lawyer's advice that the real estate disclosure was not required, also tried to clarify Trump's recent market-moving comments on the U.S. dollar.
Democrats had gone into Mnuchin's hearing perceiving him as one of the more vulnerable Trump nominees, partly due to his involvement with OneWest Bank, which he ran in the aftermath of the 2007-2009 financial crisis.
They hammered him for the 36,000 foreclosures that the bank pursued after Mnuchin struck a lucrative deal with the Federal Deposit Insurance Corp to absorb most of the losses from such actions.
Mnuchin argued that his bank was a "loan modification machine," offering payment reductions to 101,000 borrowers to try to keep them in their homes, and said his turnaround of the failed IndyMac bank, which became OneWest, saved thousands of jobs and homes.
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