Category Archives: Treasury

Treasury Secretary Mnuchin requested $25,000 per hour government jet for European honeymoon

ABC News reports: Secretary Steven Mnuchin requested use of a government jet to take him and his wife on their honeymoon in Scotland, France and Italy earlier this summer, sparking an “inquiry” by the Treasury Department’s Office of Inspector General, sources tell ABC News.

Officials familiar with the matter say the highly unusual ask for a U.S. Air Force jet, which according to an Air Force spokesman could cost roughly $25,000 per hour to operate, was put in writing by the secretary’s office but eventually deemed unnecessary after further consideration of by Treasury Department officials.

Senator Ron Wyden (D-Oregon), the top Democrat on the Senate Finance Committee, said in an interview with ABC News that Mnuchin’s request for a government jet on his honeymoon defies common sense. [Continue reading…]

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Mnuchin defends Trump’s comments on Charlottesville, rebuffs calls to resign

The Washington Post reports: Treasury Secretary Steven Mnuchin, who faced calls from his Yale University classmates to resign in the wake of President Trump’s controversial comments about last weekend’s violence in Charlottesville, defended the president Saturday and said he intends to stay in office.

“While I find it hard to believe I should have to defend myself on this, or the president, I feel compelled to let you know that the president in no way, shape or form believes that neo-Nazi and other hate groups who endorse violence are equivalent to groups that demonstrate in peaceful and lawful ways,” Mnuchin, who is Jewish, said in a statement released by the Treasury Department. [Continue reading…]

Mnuchin’s classmates wrote:

President Trump has declared himself a sympathizer with groups whose values are antithetical to those values we consider fundamental to our sacred honor as Americans, as men and women of Yale, and as decent human beings. President Trump made those declarations loudly, clearly, and unequivocally, and he said them as you stood next to him. We can be Republicans, Democrats, Libertarians, Greens, and a number of other things and still be friends, classmates, and patriots, but we cannot be Nazis and white supremacists. We can disagree on the means of promoting the general welfare of the country, on the size and role of government, on the nature of freedom and security, but we cannot take the side of what we know to be evil.

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Rep. Dana Rohrabacher accused of violating U.S. sanctions on Russia

Business Insider reports: A new complaint filed with the Treasury’s Office of Foreign Asset Control alleges that California Rep. Dana Rohrabacher and his staff director, Paul Behrends, violated the Magnitsky Act when they tried to get Russia’s deputy general prosecutor, Victor Grin, removed from the US sanctions list last year.

The complaint was filed by US financier Bill Browder, the founder of Hermitage Capital Management, who spearheaded the Magnitsky Act in 2012 to punish Russian officials suspected of being involved in the death of his accountant, Sergey Magnitsky.

Magnitsky uncovered a $230 million tax fraud scheme in 2008 when he was working for Hermitage that implicated high-level Kremlin officials and allies of President Vladimir Putin. He was later thrown in jail by the same Interior Ministry officers he testified against during criminal proceedings to punish those involved in the tax scheme, Browder said in 2015, and died in custody after being held for 358 days.

Browder’s complaint rests largely on a Daily Beast report published last week alleging that Rohrabacher, a staunch defender of Russia and Putin, met with officials from the prosecutor general’s office in Moscow in April 2016. The report said he accepted a “confidential” document that Rohrabacher then used to try to undermine the Magnitsky Act on Capitol Hill. [Continue reading…]

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Exxon sues U.S. over fine levied for Russia deal under Tillerson

Reuters reports: Exxon Mobil Corp sued the U.S. government on Thursday, blasting as “unlawful” and “capricious” a $2 million fine levied against it for a three-year-old oil joint venture with Russia’s Rosneft.

The U.S. Treasury Department on Thursday morning slapped the world’s largest publicly traded oil producer with the fine for “reckless disregard” of U.S. sanctions in dealings with Russia in 2014 when Secretary of State Rex Tillerson was Exxon’s chief executive.

The lawsuit and the Treasury’s unusually detailed statement on Exxon’s conduct represented an extraordinary confrontation between a major American company and the U.S. government, made all the more striking because Exxon’s former CEO is now in President Donald Trump’s Cabinet.

Exxon took the government to court despite the fact that the fine, the maximum allowed, would have a minor impact on the company, which made $7.84 billion in profit last year.

The fine came after a U.S. review of deals Exxon signed with Rosneft, Russia’s largest oil producer, weeks after Washington imposed sanctions on Moscow for annexing Ukraine’s Crimea region. [Continue reading…]

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Trump’s casino was a money laundering concern shortly after it opened

CNN reports: The Trump Taj Mahal casino broke anti-money laundering rules 106 times in its first year and a half of operation in the early 1990s, according to the IRS in a 1998 settlement agreement.

It’s a bit of forgotten history that’s buried in federal records held by an investigative unit of the Treasury Department, records that congressional committees investigating Trump’s ties to Russia have obtained access to, CNN has learned.

The casino repeatedly failed to properly report gamblers who cashed out $10,000 or more in a single day, the government said.

Trump’s casino ended up paying the Treasury Department a $477,000 fine in 1998 without admitting any liability under the Bank Secrecy Act.

CNN obtained 417 pages of Treasury Department documents under the Freedom of Information Act. The records included the 1998 settlement, draft and final copies of a similar settlement in 2015, and exchanges between the Trump casino lawyers and federal regulators.

The 1998 settlement was publicly reported at the time, and the Associated Press noted it was the largest fine the federal government ever slapped on a casino for violating the Bank Secrecy Act.

But key details of the casino’s cash reporting violations are missing from the publicly released documents, including the identities of the gamblers and casino employees involved in the transactions. [Continue reading…]

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Michael Flynn’s ties to Russia under investigation

The Wall Street Journal reports: U.S. counterintelligence agents have investigated communications that President Donald Trump’s national security adviser had with Russian officials, according to people familiar with the matter.

Michael Flynn is the first person inside the White House under Mr. Trump whose communications are known to have faced scrutiny as part of investigations by the Federal Bureau of Investigation, Central Intelligence Agency, National Security Agency and Treasury Department to determine the extent of Russian government contacts with people close to Mr. Trump.

It isn’t clear when the counterintelligence inquiry began, whether it produced any incriminating evidence or if it is continuing. Mr. Flynn, a retired general who became national security adviser with Mr. Trump’s inauguration, plays a key role in setting U.S. policy toward Russia.

The counterintelligence inquiry aimed to determine the nature of Mr. Flynn’s contact with Russian officials and whether such contacts may have violated laws, people familiar with the matter said.

A key issue in the investigation is a series of telephone calls Mr. Flynn made to Sergey Kislyak, the Russian ambassador to the U.S., on Dec. 29. That day, the Obama administration announced sanctions and other measures against Russia in retaliation for its alleged use of cyberattacks to interfere with the 2016 U.S. election. U.S. intelligence officials have said Russian President Vladimir Putin ordered the hacks on Democratic Party officials to try to harm Hillary Clinton’s presidential bid.

Officials also have examined earlier conversations between Mr. Flynn and Russian figures, the people familiar with the matter said. Russia has previously denied involvement in election-related hacking.

In a statement Sunday night, White House spokeswoman Sarah Sanders said: “We have absolutely no knowledge of any investigation or even a basis for such an investigation.” [Continue reading…]

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FBI, CIA, NSA, Justice, and Treasury departments probe possible covert Kremlin aid to Trump

McClatchy reports: The FBI and five other law enforcement and intelligence agencies have collaborated for months in an investigation into Russian attempts to influence the November election, including whether money from the Kremlin covertly aided President-elect Donald Trump, two people familiar with the matter said.

The agencies involved in the inquiry are the FBI, the CIA, the National Security Agency, the Justice Department, the Treasury Department’s Financial Crimes Enforcement Network and representatives of the director of national intelligence, the sources said.

Investigators are examining how money may have moved from the Kremlin to covertly help Trump win, the two sources said. One of the allegations involves whether a system for routinely paying thousands of Russian-American pensioners may have been used to pay some email hackers in the United States or to supply money to intermediaries who would then pay the hackers, the two sources said.

The informal, inter-agency working group began to explore possible Russian interference last spring, long before the FBI received information from a former British spy hired to develop politically damaging and unverified research about Trump, according to the sources, who spoke on the condition of anonymity because of the sensitive nature of the inquiry. [Continue reading…]

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To avoid a 2016 crash, the major powers need to pull in the same direction

By Anton Muscatelli, University of Glasgow

It looks already as if 2016 will be a pivotal year for the world economy. RBS has advised investors to “sell everything except for high-quality bonds” as turmoil has returned to stock markets. The Dow Jones and S&P indices have fallen by more than 6% since the start of the year, which is the worst ever yearly start. There is a similar story in other major markets, with the FTSE leading companies losing some £72bn of value in the same period.

These declines have come on the back of a major shock to the Chinese stock market. China’s stock exchange is very different from that of other major economies, as Chinese companies don’t rely on it to fund themselves to the same extent, using debt instead. All the same, the repeated suspensions of trading as the Chinese circuit-breakers came into operation (as they do when share prices fall too sharply) spooked investors around the world.

On top of that we are seeing commodity prices continuing to retreat. Oil prices have dropped towards $30 per barrel and don’t look likely to increase soon, with Iranian and Saudi oil production continuing to sustain supply. We are seeing many emerging economies dependent on petroleum revenues suffering (Brazil, Russia), and there is speculation that many oil producers (and perhaps even Saudi Arabia) are having to abandon their currencies’ link with the US dollar.

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The $7 trillion secret loan program. The government and big banks should be punished

Eliot Spitzer writes: Imagine you walked into a bank, applied for a personal line of credit, and filled out all the paperwork claiming to have no debts and an income of $200,000 per year. The bank, based on these representations, extended you the line of credit. Then, three years later, after fighting disclosure all the way, you were forced by a court to tell the truth: At the time you made the statements to the bank, you actually were unemployed, you had a $1 million mortgage on your house on which you had failed to make payments for six months, and you hadn’t paid even the minimum on your credit-card bills for three months. Do you think the bank would just say: Never mind, don’t worry about it? Of course not. Whether or not you had paid back the personal line of credit, three FBI agents would be at your door within hours.

Yet this is exactly what the major American banks have done to the public. During the deepest, darkest period of the financial cataclysm, the CEOs of major banks maintained in statements to the public, to the market at large, and to their own shareholders that the banks were in good financial shape, didn’t want to take TARP funds, and that the regulatory framework governing our banking system should not be altered. Trust us, they said. Yet, unknown to the public and the Congress, these same banks had been borrowing massive amounts from the government to remain afloat. The total numbers are staggering: $7.7 trillion of credit—one-half of the GDP of the entire nation. $460 billion was lent to J.P. Morgan, Bank of America, Citibank, Wells Fargo, Goldman Sachs, and Morgan Stanley alone — without anybody other than a few select officials at the Fed and the Treasury knowing. This was perhaps the single most massive allocation of capital from public to private hands in our history, and nobody was told. This was not TARP: This was secret Fed lending. And although it has since been repaid, it is clear why the banks didn’t want us to know about it: They didn’t want to admit the magnitude of their financial distress.

The banks’ claims of financial stability and solvency appear at a minimum to have been misleading—and may have been worse. Misleading statements and deception of this sort would ordinarily put a small-market player or borrower on the wrong end of a criminal investigation.

So where are the inquiries into the false statements made by the bank CEOs? And where are the inquiries about the Fed and Treasury officials who stood by silently as bank representatives made claims that were false, misleading, or worse?

Only now, because of superb analysis done by Bloomberg reporters — who litigated against the Fed and the banks for years to get the information — are we getting a full picture of the Fed and Treasury lending. The reporters also calculated that recipient banks and other borrowers benefited by approximately $13 billion simply by taking advantage of the “spread” between their cost of capital in these almost interest-free loans and their ability to lend the capital.

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