Trump’s pick for Treasury Secretary is Steven Mnuchin, a former Goldman Sachs executive and hedge fund manager. Mnuchin has been receiving critical coverage for his role as chairman of OneWest, a California lender that became notorious for its predatory foreclosure practices, which disproportionately affected communities of color.
His close ties to the Los Angeles Police Department also deserve more scrutiny – and reveal mechanisms through which Wall Street curries favor with the police.
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Even among the many bad actors in the national foreclosure crisis, OneWest stood out. It routinely jumped to foreclosure rather than pursue options to keep borrowers in their homes; used fabricated and “robo-signed” documents to secure the evictions; and had a particular talent for dispossessing the homes of senior citizens and people of color.
This “foreclosure machine,” as the California Reinvestment Coalition has dubbed it, was good to Mnuchin. In 2015 he made over $6.5 million in his role as vice chairman of CIT Bank, which now owns OneWest. When he stepped down from that position he was awarded an additional $10.9 million. His net worth is estimated at $40 million.
The folks he foreclosed on, of course, were much less fortunate. In 2011, a group of protesters sought to hold Mnuchin accountable for OneWest’s foreclosure operation and turned the tables on him, assembling outside his $26 million Bel Air mansion with signs that read “Stop Taking Our Homes” and “Make Banks Pay.” The protests specifically sought to block a foreclosure action against Rose Gudiel, who later got a loan modification and kept her home.
Mnuchin later said that he had gotten early word of the protest and “was forced to have the LAPD on scene to disperse the crowd.”
It is unclear if Mnuchin paid for that special protection, which included a helicopter. But notably, OneWest had made a major contribution to the Los Angeles Police Foundation (LAPF) the year before. Mnuchin has also been a major supporter of the foundation, serving on its board and co-chairing and sponsoring LAPF events and fundraisers. He has given at least $34,500 to the LAPF through his foundation since 2012.
Police foundations like the LAPF raise money from private sources to provide additional support to police departments, in some cases donating equipment so that the standard procurement process can be bypassed. In Los Angeles, foundation money has been used to buy controversial equipment such as license plate readers and cell phone tracking devices.
In 2010, OneWest had made a three-year, $300,000 commitment to fund the LAPD’s Juvenile Impact Program, a “scared straight”-style boot camp that focuses on at-risk youth. Mnuchin himself announced the grant, saying “OneWest is proud to be a partner of the Los Angeles Police Foundation and to be sponsoring a program so vital to the health of the communities we serve.”
A 2012 Los Angeles Daily News article on the program is less clear on its merits. It describes a video from the program in which an LAPD officer yells “You want to throw up? Stop lagging!” at a youth experiencing stomach pains. A different program, privately run by LAPD officers but modeled on JIP, came under investigation for its harsh tactics.
Mnuchin would later describe the protest at his home as something that could have caused “psychological harm” to his children if he had not gotten early word of it and evacuated them. Apparently, this concern did not extend to children experiencing foreclosure evictions or going through the OneWest-funded LAPD boot camp.
OneWest seems to have reaped at least one significant benefit as a result of its support of LAPF: in 2014, when the bank was seeking to merge with CIT Bank, LAPD Chief Charlie Beck wrote a personal letter of support for the merger to the Federal Reserve.