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Throughout presidential campaign, Donald Trump has criticized Wall Street bankers for their excessive political influence, attacked hedge fund managers for getting away with “murder” under the current tax code, and claimed that he would self-fund his campaign to avoid being beholden to special interests. “The hedge fund guys didn’t build this country,” Trump said on “Face the Nation” recently. “These are guys that shift paper around and they get lucky.”
But now Trump has tapped Steve Mnuchin, a 53-year-old Wall Street hedge fund and banking mogul, to be his campaign’s national finance chair.
Trump’s earlier rhetoric aside, it’s actually a good match. Mnuchin is CEO of Dune Capital Management, a hedge fund has had business dealings with Trump. Both Trump and Mnuchin earned their first fortunes the old fashion way: they inherited it. Trump took over his father Fred’s real estate empire and expanded it through questionable business practices. Mnuchin, also the scion of a wealthy and well-connected family, graduated from Yale in 1985 and soon wound up working at Goldman Sachs, where his father Robert had been a general partner.
Both Trump and Mnuchin have run businesses accused of widespread racial discrimination, and they both represent the excessive wealth and greed of the billionaire developer and banker class. And both men have hedged their political bets, donating big bucks to Democrats as well as Republicans.
Mnuchin worked at Goldman Sachs for seventeen years, where he eventually became an executive vice president. According to the Wall Street Journal, he left in 2002 “at the age of 39 with a reported $46 million stake in the bank.” He was recruited by his Yale roommate, Eddie Lampert, to join ESL, a hedge fund, as vice chairman. A few months later, he jumped to SFM Capital Management as its CEO. But within a few months he changed jobs again, leaving SFM to co-found Dune Capital with his former Goldman colleagues Daniel Neidich and Chip Seelig.
In 2009, Mnuchin helped assemble a group of investors (including computer capitalist Michael Dell, financier George Soros, private equity investor Christopher Flowers, and hedge fund titan John Paulson) to buy IndyMac Bank from the Federal Deposit Insurance Corporation (FDIC) as part of a sweetheart deal. They renamed it OneWest Bank and kept its headquarters in Pasadena.
FDIC had taken over IndyMac in July 2008. IndyMac was one of the largest lenders to collapse during the Wall Street-induced mortgage meltdown. It specialized in high-risk variable-rate mortgages and loans that didn’t require much documentation, including the income and credit history of borrowers.