Memo to Steven Mnuchin: How to Get Yourself Confirmed
Your upcoming Senate confirmation hearing to be President-elect Donald Trump’s Treasury secretary is going to be ugly.
Your problem is that you have too little and too much experience. Senators will assail you for having no record in government but a 17-year tenure at Goldman Sachs -- a firm Trump criticized on the campaign trail. And you made a personal fortune investing in underwater home loans during the financial crisis.
As Bloomberg’s Zachary Mider put it, your hearing “promises to dredge up every controversy of the U.S. mortgage meltdown almost a decade ago.” Senate Democrats have already created a website calling you the “foreclosure king” and asking Americans to submit personal stories online about how you have hurt them. The Progressive Change Campaign Committee is going to run ads pressuring Republican senators to oppose your nomination. This is an issue because you need 51 votes to get confirmed and there are just 52 Republican senators (plus a Republican vice president to break a tie).
Republican political consultant Ed Rollins, who served as President Ronald Reagan’s White House political director, warned that senators are likely to have lots of questions for you because you’re essentially unknown to them. Unlike nominees like Senator Jeff Sessions, Trump's choice for attorney general, and James Mattis, the ex-general chosen to be secretary of defense who has worked with Congress for years, "no one knows who this guy is who raised money for Trump,” Rollins said in an interview.
As a former Treasury spokesperson, I helped prepare President Barack Obama's nominees and officials for combat on Capitol Hill. Here’s the best advice I can give you.
Don’t fight with members of Congress. Some senators will put on truculent performances for the benefit of cable TV.
If you think I’m being hyperbolic, check out this video of former Treasury Secretary Tim Geithner’s April 2009 hearing before the Congressional Oversight Panel. An hour and 22 minutes into his testimony, panel member Damon Silvers insists to Geithner not once, not twice, but three times that Geithner -- who had until that time dedicated his life to public service -- had previously been a banker.
Don’t argue back.
Andrea Ambriz, a former acting deputy assistant secretary for legislative affairs in the Treasury department who briefed current Treasury Secretary Jack Lew for his Senate confirmation hearings, said “the nominee who does the best is the one who respectfully and directly answers members of Congress and doesn’t try to play games, because members of Congress see through that.” Just as you’d be polite in a job interview, you should be deferential to senators who question you. Thank them for their questions and answer them calmly regardless of their tone.
“At the end, they have to like you,” Ambriz said. “You have to present yourself as a person they actually want to work with in the future. Washington is built on relationships.”
Acknowledge the damage caused by the financial crisis, but don’t apologize for it.
Rollins said you needn't take personal blame for the financial crisis because it was caused by the policies of so many people on Wall Street and in government. What you must do is explain the lessons you learned from it, and what you’ll do to prevent future crises.
Don’t pretend to have all the answers.
Rollins said you should remember that you’re not on Wall Street anymore. On Capitol Hill, humility will work in your favor.
In fact, Ambriz said, you're not expected to know the answer to every question. “The job at this stage isn’t to know every single detail but to be prepared, thoughtful and able to handle curveballs gracefully,” she said. “Ultimately, this is a control test to see how well you do under pressure.”
Rather than risk a mistake, the best thing to do if you can’t fully answer a question is to promise to follow up with a written response -- something known as a “question for the record,” or “QFR,” in Washington-speak.
Here’s how to apply this strategy to some of the meanest questions you’re likely to face.
Question: You joined other investors to buy a company that made money off foreclosures of the homes of poor Americans during the financial crisis. According to calculations by Bloomberg, you may have made $200 million from this deal. Why should Americans trust someone who schemed to make a profit off their suffering?
Answer: The company I co-owned, OneWest, purchased mortgages that were in delinquency and worked to modify loans to make it possible for people to stay in their homes. The Treasury department and Federal Deposit Insurance Corporation gave positive reviews of our practices. Having seen firsthand how American families struggled during the 2008 crisis, I can tell you that my priority as Treasury secretary would be making sure that the fundamentals of our banking system are sound so that something like this never happens again.
Q: Senator Elizabeth Warren said that in the 17 years you worked for Goldman Sachs, you were responsible for “helping the bank peddle the same kind of mortgage products that blew up the economy and sucked down billions in taxpayer bailout money.” How can we trust someone who was part of the industry that helped cause the 2008 financial crisis to foresee and prevent future crises?
A: I think everyone -- Republicans and Democrats, those in government and those in the private sector -- wishes that the financial crisis had been predicted beforehand. It was a result of bad policy on Wall Street that was incentivized by bad government policies. What I can tell you is that my private sector experience has given me deep insight into how financial markets work and I’m committed to using that knowledge to forecast and eliminate risks so that we don’t face future crises.
Q: On the campaign trail, President-elect Trump said: “I know the guys at Goldman Sachs. They have total, total control over (Ted Cruz). Just like they have total control over Hillary Clinton.” You worked at Goldman for 17 years. How can we trust that Goldman won’t control you?
A: I haven’t worked at Goldman Sachs in 15 years, so if confirmed, I would need to meet with the leaders of the firm -- and all other major institutions on Wall Street -- to learn more about their particular areas of concern and priority. My priority would always be serving the interests of the American people and driving an economy that creates more and better jobs here at home.
Q: What previous government experience do you have that makes you qualified to advise a president who has no previous government experience?
A: Like prior extraordinary Treasury secretaries such as Bob Rubin, I haven’t worked in government before. When President-elect Trump ran for office, he promised the American people that he’d bring business acumen to government. If confirmed, that’s exactly what I’ll do. I know how our financial system works, and I’ll use that knowledge to help create jobs and grow our economy.
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