Trump’s Treasury pick appears to be part of a federal investigation

Request for FBI files on Steven Mnuchin rejected on “law enforcement proceeding” grounds

Written by Emma Best
Edited by JPat Brown

A version of this article appeared on Glomar Disclosure

UPDATE: In a press release today, Sen. Sherrod Brown (D-Ohio), the ranking member of the Senate Banking, Housing, and Urban Affairs Committee, announced that they’re asking the FBI to release its files on Relativity Media.

Citing his desire to have people who “made a fortune,” Donald Trump has selected a number of super-rich individuals with little to no government experience for his cabinet. In this case, the result is a set of picks whose combined wealth is higher than a third of American households combined.

And at least one, Steven Mnuchin, nominated to be Secretary of the Treasury, appears to tied to a federal investigation.

As part of several FOIA requests with various federal agencies on members of Trump’s transition team, a request was sent to the FBI targeting the media companies of Mnuchin, who had used his position as a Hollywood financier to buy himself Executive Producer titles on movies. One week after Mnuchn accepted the nomination for Secretary of the Treasury, the Section Chief for the FBI’s FOIA office responded with letters saying that they found no records on Mnuchin’s company RatPac-Dune Entertainment – but that they had found them for his other media company, Relativity Media.

However, those would be withheld, citing FOIA Exemption 7(A), indicating a law enforcement “proceeding.”

The requirements for the exemption are quite clear. The Department of Justice’s guide to Exemption 7(A) states that:

It is beyond question that Exemption 7(A) is temporal in nature and is not intended to “endlessly protect material simply because it [is] in an investigatory file.” Thus, as a general rule, Exemption 7(A) may be invoked so long as the law enforcement proceeding involved remains pending, or so long as an enforcement proceeding is fairly regarded as prospective or as preventative.

This investigation could be tied to the financial sleight-of-hand that surrounded Mnuchin’s tenure at Relativity Media, its declaration of bankruptcy and its relationship with OneWest Bank. Variety reported that:

Relativity agreed to let OneWest take $32 million from accounts the studio received for use of its film library. Less than two weeks before the bankruptcy, on July 17, Mnuchin’s bank swept $17.9 million more from an account normally used to pay residuals and participation fees to performers, writers and others… Mnuchin had left Relativity just days before the company reached an agreement with OneWest to extend the loan deadline and allow the bank to claim that money.

This conflict of interest which Mnuchin allegedly resigned to “avoid” is not the only investigation that Mnuchin or OneWest appear to be tied to. Mnuchin sold OneWest back to CIT Group, which informed its investors it had been served with multiple subpoenas by the Housing and Urban Development’s Office of the Inspector General. A FOIA request by the California Reinvestment Coalition determined that “CIT Group [and its reverse mortgage subsidiary] Financial Freedom were responsible for 39 percent of the 41,237 reverse mortgage foreclosures in the United States since April 2009 despite having an estimated market share of only 17 percent in the reverse mortgage market.”

Read the FBI’s full rejection letter embedded below, or on the request page.


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Image via ECO.pt