Transcripts For FOXNEWSW Happening Now 20170119

Strongly believe and understand that there are very, very important tools within the Treasury Department that can combat terrorism. And that many of these tools, such as sanctions, are extremely effective and keep our Armed Services out of harm. So i am fully committed to the maximum amount of law to both enforce the existing sanctions in a very strict way, and i will work with the president elect as he sees fit on additional sanctions. There are also other programs within treasury that i believe are very, very effective in fighting terrorism. Its a very important part of the treasury, and i know that that has been done very effectively under previous secretaries. We all agree its important. What were trying to do is assess your qualifications. And you havent been willing to talk about medicare, havent been willing to talk specifics on terror. Let me take one more crack on qualifications with the committee on forest investment Foreign Investments, because this is Something Else as treasury secretary you would have responsibility on to protect our country, when a foreign investor makes an investment in the United States that has National Security implications. If a foreign investor with ties to a Foreign Government invests in President Trumps business, should the committee on Foreign Investment automatically and with close scrutiny examine this transaction . Senator, first let me say, yes, i think that would be appropriate. But let me go back to your other question, because i apologize if i didnt answer the specifics on your terrorism sanctions. I was searching for any specifics in order to be able to assess your qualifications. Well, senator, again, i believe there are some very important sanctions as it relates to the sanctions against iran and other countries. I would absolutely enforce those and i would encourage the president to use additional sanctions when appropriate. And i also understand that there are certain classified programs that i will be part of at the nsa, and will also use that and work with the National Security group to the maximum amount that is available by law. So we didnt hear what you would do to fight isis parade we didnt get any specifics on medicare. So now lets hear about this most current question with respect to the committee on Foreign Investment. What would you do if you were dealing with President Trumps business . I would deal with President Trumps business no deal than i would no different than i would deal with any business that comes before the committee and i would take my role as chair of the committee very, very significantly. I think its a very important issue. I think in perhaps previous secretaries have not enforced some of these things necessarily as much as perhaps they should have in protecting the American Workers and the American People and american technology. I think this is one of the most important jobs that i would have as secretary of treasury. Mr. Minh nguyen mnuchin, the president does not like anybody else. So i would reflect on that answer as well. Can i pursue one other additional question, senator . Mr. Mnuchin, you run a hedge fund for two years starting in 2004, and ive been trying to get my arms around the mnuchin web of Bank Accounts and Shell Companies that were in the Cayman Islands, how many employees did you have there . We didnt have any employees in anguilla. How many customers did you have there . We didnt have any customers that resided in anguilla. Did you have an office there . We did not have an office ourselves there. So you just had a po box. Senator, let me explain to you just a yes or no answer, did you just have a post office . Hopefully some other senators will defer some time so i can answer this for you, because i think its an important issue. I think you should go ahead and answer it right now. Thats a legitimate question. You go ahead and answer. I, like all other hedge funds and many, many private equity funds set up offshore entities that are primarily intended to accommodate nonprofit and pensions that want to invest through these offshore entities. As it relates to my own tax situation, these entities were either taxed as u. S. Corporations or u. S. Partnerships, and in no way did i use them whatsoever to avoid any u. S. Taxes. They were merely as an accommodation to Pension Funds and nonprofit institutions, and a small number of foreign investors. And as treasury secretary, if im confirmed, i would look at these rules and make sure. I think that you did a good job in stopping one of the abuses of offshore deferred fees, but i would diligently look at these things, and i can assure you i paid all my taxes as was required. Welcome back to this question of offshore deals, they are commonly called walkers. Again, im very troubled about this question of how you are going to on rig the system if youve got a record of taking advantage of tax shelters that in effect have 0 pass rate. Thank you, mr. Chairman. Mr. Mnuchin, as you can see youre going to get questions like this, and what was legal at the time is still being criticized. But im sure you have heard of allegations that you profited from predatory, predatory lending during the housing crisis. An Investor Group that you headed, formed, a failed institution, responsible for many low endo doc Mortgage Loans into a viable institution called one west. Would you have described here. Which offered Loan Modifications, often above and beyond what other institutions were doing to more than 100,000 borrowers. At least thats the way looks to me. Meanwhile, during all of the foreclosure turmoil, the Obama Administration officials set up a National Loan Modification Program called hanp. Many members of congress on both sides of the aisle have repeatedly fallen short and have significant design flaws. In testimony before congress in 2011, then the special Inspector General neil identified that there have been countless published reports of participants who end up worse off for having engaged in a futile effort to obtain sustainable relief that the program promise. Failed modifications often leave borrowers with more principal outstanding on their loans, less on equity, depleted savings, and worse credit scores. Using provocative language that we have heard supporting your actions in the foreclosure crisis, i guess you could say that then secretary guyton or was a predatory loan modifier using that type of logic. Now mr. Mnuchin, did one west have any interplay with the Obama Administrations program, and was at program always successful in preventing for foreclosures on struggling American Home owners, or could moore have been done by the administration . Senator, thank you very much for that question, and that is a very important issue. When we did the nd mack deal with the fdic, we committed to the fdics, that we would continue the fdics Loan Modification Program. It was after that that the Obama Administration came up with that program, and we had no obligation to do hamp, we could have continued to do fdics Loan Modifications, but we felt that was the appropriate thing to voluntarily go into the u. S. Treasury hamper major banks. So we voluntarily went into that program. The hamp Loan Modification Program was a very prescriptive program, including us having to follow net present value calculations that were determined by the treasury models to see which was better, either foreclosing on a home or providing a loan modification. And to the extent that the net present value was higher on foreclosing, we unfortunately had to follow the hamp rules, or we would have been severely penalized if we had not proceeded with foreclosures. These were not your rules. No, they were not our rules, senator, these were rules that were driven by the administration under hamp. Which administration . The Obama Administration. Let me ask one more question. There is a wide agreement that the tax law has become much too complicated. And stories of people getting their Tax Liability incorrectly calculated are commonplace, thus reducing cynicism of the tax law and thus creating an ever greater tax gap or difference between what is owed versus what is actually paid. It is clear that there is a major problem and something needs to be done to address the problem. To your credit, mr. Mnuchin, you have talked about your desire to simplify the tax code. Thank you. Im glad you are talking about that, because i very much agree with you. So my question to you, mr. Mnuchin, is how to address this problem. Do you have any suggestions for how to make the Internal Revenue code less complex, or at least keep it from getting more complicated, and would you recommend a moratorium on either tax legislation or tax regulations, and should the tax laws simply tried to raise revenue for the government and stop trying to achieve so many other social goals or societal goals . Yes, senator, i agree with you completely. On one of the things, it has been a great honor to travel with the president elect, and ive been one of the chief architects of his economic plans. We believe the most critical issue is creating Economic Growth and passing tax reform is a major component of that. And our tax reform plan we believe the tax simplification and fewer deductions are absolutely critical. Now you mentioned about the tax gap, and that is something that ive been reading about and studying and something that im actually quite interested in. I was particularly surprised that at looking at the irs numbers, that the irs headcount has gone down quite dramatically. Almost 30 over the last number of years. I dont think theres any other Government Agency that has gone down 30 , and especially for an agency that collects revenues, this is something that im concerned about. Now perhaps the irs just started with way too many people, but i am concerned about the staffing of the irs, that is an important part of fixing the tax gap. And im also very concerned about the lack of firstrates technology at the irs. The issue of making sure that we protect the american publics privacy when they give information to the irs. Cyber security around that. And also, Customer Service for the many hardworking americans that are paying taxes. Senator grassley, youre next. Like i told you when we met in our office, i dont have any gotcha questions or i would let you know. So let me go along the line of the first statement i want to make. I dont expect you to answer unless you, unless i have some misunderstanding of our position discussed in my office. Progrowth tax reform will be a top priority for you. I agree and look forward to working with you and president elect trump on that point. As part of any tax reform proposal it will be important that adequate transition rules are included to provide a smooth transition for businesses that may be unpredictably negative negatively impacted. As we discussed in our meeting, congress has already effectively put in place transition rules for some alternative energy, including wind. The production tax credit is currently scheduled to phase out over the next few years, ending in 2020. Based upon our conversation, i believe that we are in agreement that you would support the current phaseout as part of any tax reform proposal. Question number two. My been a strong proponent of the irs private Debt Collection program, as has senator schumer. In 2015, Congress Updated and made mandatory the irs private Debt Collection program. This program is designed to chip away at the tax gap by requiring the irs to contract with private debt collectors to collect inactive tax debt owed. These are the tax debts not being worked by the irs. And absent this program would likely never be collected. Adding up to 187 million in 2017. Out of that 187 million, the Treasury Department has provided debt collectors to collect a net of 8 million. This certainly is not due to the lack of inactive tax debt available for the irs to assign. According to the Government Accountability office report, the irs has over 130 billion of outstanding debt on its books. So hamstringing this program by refusing to release inactive debt for the program ought to be considered unacceptable by anybody. So can you give me assurances that the department of treasury, under your leadership, will work to implement the program to the full extent of authorized law and bring in this tax money that is not being collected . Yes, senator, and first of all if you are just joining us, welcome to happening now, as we are taking in a couple of very important Live Event Center program. 11 15 eastern time, as we head toward a very historic day, that is Inauguration Day tomorrow in washington, d. C. That is Steven Mnuchin, who is trumps nominee for secretary of the treasury. He is currently before the Senate Finance committee, this is part of his hearing in order to be approved for that position. The other live picture that you are seeing, and perhaps we can go back to that unless we lost it in the control room, we have been watching the journey of president elect donald trump from trump tower to laguardia airport, and it is our understanding, this is the picture we have from wnyw, our affiliate in new york city, that this is a plane that donald trump will be on as he heads to washington, d. C. , today. On his schedule, a wreathlaying at Arlington National cemetery, as well as a concert in the afternoon, again, in celebration of the inauguration, which will we will all be watching together tomorrow. So historic happenings here, we are so glad you are joining us. Also joining us as aaron blake, the senior policy reporter for the washington post. It is interesting to see these two moments together, here we are awaiting the president elect to go to washington, d. C. , where he will become the president , as we also are watching the screening process, if you will, for a key member of his team. What you make of this moment . Talk to us a little bit about the significance of where we are today just before noon eastern time. Well i think the confluence of those two things is a pretty good indicator of where we sit right here. Just about 45 minutes ago in the hearing that weve been seeing here, there was kind of a little bit of a blowup between the democrats on the republicans on the Senate Finance committee. We saw a lengthy Opening Statement from the Ranking Member of that committee, ron wyden, from oregon, and basically going after Steven Mnuchin for his work on foreclosures after the housing crash. After that we saw senator pat roberts, a republican from kansas, offer senator wyden a valium pill, which i think goes against a lot of the protocols of senate decorum. I imagine we will hear more about that in the days to come. I think this is a really good example of how basically all of these Trump Nominees have been targeted for one thing or another, and democrats really want to send a signal that theyre not going to just let these nominees go through. Theyre not going to bend to the will of president elect trump, even the day before his inauguration. Jenna did he actually have a valium . That might explain some things. You dont have to answer that, of course. I am curious if you could comment on this for our viewers. Sean spicer, the incoming press secretary, held a press briefing today, and he took the democrats to task over the speed of this process. Can you give our viewers some context about how unusual this is . Is this typical for an incoming president to have this sort of pushback from members of the opposing party . Is it Something Different . How would you describe it . It certainly seems to be more pitched than it has been in the past. Im not sure you can draw direct historical comparisons here. But it does seem like almost every Trump Nominee has these stories coming out, has democrats making these stands in the hearings. Generally a lot of these nominees sail through pretty easily with some bipartisan support. Democrats would certainly say that the nominees trump has picked just arent as qualified, have liabilities that need to be pointed out. But like i said before, i think a lot of this is just the new normal of the polarization that we have. I think democrats feel a lot of pressure to be tough on these nominees. It is their first chance to fight back against donald trump. In the Democratic Base certainly wants their party to fight back in a very significant way. So i think we are going to be seeing this not just with the cabinet picks and the confirmation hearings going forward, but with pretty much everything that donald trump and his administration do put forward as far as policy goals. Jenna u underscore an important point, thank you very much. Its that everybody is finding their voice in this new period, this new administration, and we know donald trump will be setting the tone tomorrow as well. Steven mnuchin has a background that involves banking, but if you have seen avatar, a popular movie, he helped finance at movie as well. So he has a wide range of experience in the business world, some like that and some dont. We will dip back into the hearing on capitol hill to hear a little bit more from the man who we expect to be our next secretary of treasury. But the amount of paperwork and filling out the forms, even for me, having experience in business, was quite a job. In an effort to get the Committee Information early, we submitted a preliminary questionnaire prior to us having the 278 form finished and prior to signing the agreement with the ethics office. Let me first say that any oversight, it was unintentional, you did mention that there was 100 million of real estate. I was advised by my lawyer that we didnt need to disclose that on the questionnaire because it didnt need to be disclosed on the 278. There was some confusion about the complexity. We worked tirelessly with the committee staff, and i want to thank all of the staff. I know they worked very, very long hours peered as i said, they were extremely thorough. I appreciate their work. We delivered over 5,000 pages. And i can assure you they actually read all those 5,000 pages, because when i had the opportunity to meet with those staff with my lawyers and accountants, we answered some very specific, some very specific questions. Mr. Mnuchin, i dont want to interrupt, but i have very limited time, and i appreciate the Additional Information and the clarification and all that. But my question goes to what you are actually disclosing. And particularly the Cayman Islands. Did you use the Cayman Island corporation to avoid paying taxes . Would you support closing tax loopholes that very wealthy people have consistently used in the Cayman Islands to avoid paying taxes, that really is my question. Let me just be clear, again, i did not use a Cayman Island entity in any way to avoid taxes for myself. I paid u. S. Taxes on all of that income, okay. So there was no benefit to me from the cayman entity, as i said. The cayman entity was set up to accommodate nonprofit and Pension Funds that want to invest through offshore in a certain number of offshore so you help others avoid paying taxes. Again, im not going to make a comic, they didnt avoid, they followed the law. Because i have experience as a hedge fund manager, i am committed to tax simplification. I think it makes no sense that we would encourage Hedge Fund Managers to set up entities in the Cayman Islands or anywhere else, where as you pointed out, i didnt have any physical people. There are people who set up offshore businesses and put all their people offshore, and youve heard of inversions, and those types of things. They are perfectly legal and hurt the American Workers. In the hedge fund world, these are all just set up to make the accountants rich, and i would love to work with the irs to close these tax issues that make no sense and make sure that we are collecting the proper amount of taxes. So you would support closing those loopholes. I would support changing the tax laws to make sure that they are simpler and more effective, yes. Thank you very much, senator hatch, and mr. Mnuchin i appreciate your being here, your willingness to go through this and to serve the american peopl people. We truly need the kind of vision that President Trump has enunciated for the country and that youve committed to help work with him to achieve. As a part of that, one of the things that youve already mentioned today is, and im paraphrasing you here, but i believe you said in essence that we have a regulatory excess in the United States in many circumstances that can, and is, inhibiting lending and inhibiting capital formation, the two very important things that i think are critical to a progrowth economy. Could you elaborate on that . Sure, let me first say that i absolutely believe in proper regulation. And before i have the opportunity to put in the bid for indy mack bank, i had to be issued a charter, and i worked very closely with what was the otf at the time, and by the way, i was a big fan of you merging that with the occ and getting rid of another regulatory agency, but at the time i worked with them and the fed, and the regulators explained to me at the time, and i told them that i understood the responsibility of being given a banking charter. I took that very, very seriously, i must say that i enjoyed working with very, very smart regulators, and i have tremendous respect for them. As a matter of fact, in one of the few things that the wall street journal actually wrote nice about me, they made a comment that i told everybody we have to treat the regulators like our best client, which i believe. The regulators and the relationships with them and following the regulations, nothing was more important given the trust they had put in us. Having said that, i witnessed firsthand multiple regulators, the occ, the fdic, the Consumer Protection bureau, the federal reserve, and in certain cases there was overlapping regulation. My biggest concern, and i fully support regulation for banks with fdic insurance, but my biggest concern is that this regulation is killing community banks. We are losing the Community Banking business. We are losing the ability for small and mediumsized banks to make good loans to small and mediumsized businesses in the community where they understand those credit risks better than anybody else. And i think that we all appreciate the engine of growth. With small and mediumsize businesses. And in my role and working with the different regulatory, regulators, excuse me, i would make sure that we did what we could to have proper regulation but eliminate overlap as well as make sure that the banks are lending to small and mediumsized businesses and we dont end up with a world where we only have four big banks in this country. Thank you, and you actually lead right into my next question, because in a very closely related matter, as you know, as the secretary of treasury you will have a very Important Role as the chairperson of epsoc. Jenna i want to point out what is happening in new york city, you are watching laguardia airport, it is our understanding and our beliefthat president elect donald trump is on the plate that you see about to take off to laguardia headed for washington, d. C. We say we believe he is on this plane. As you know there is a great deal of security around the president elect and this travel as well, and it is our understanding that he is on this plane with his team of people as well. The plane is a u. S. Military plane. It has its own unique markings, and a short flight. Eric shawn is with me as well, as you join happening now. A short flight for washington, d. C. , and an important jersey. What strikes me as at that as a boeing 727, which is a same kind of plane he owns. It is probably not gold, but it may have a bed, as the Vice President of the United States uses this plane, this type, as air force 2, so certainly not as luxurious as the boeing 757 that mr. Trump has own, but he will have to park his own private plane at laguardia for at least the next four years and of course he is air force one trend when he does become resident. Jenna you are looking out the window taking a trip somewhere, whatever city you are in across the country, thinking about what that journey is going to hold for you, and one can only imagine what is going through president elect Donald Trumps mind right now. So many months, nearly two years in the making in the campaign to become president of the United States. That whole time he kept with his campaign slogan, make America Great again, and it is our understanding this is a theme he will touch upon as well as he lands in washington, d. C. , again today. We know a little bit of his schedule that we can share with you. Over the next few hours he will visit Arlington National cemetery, where he will participate in a wreathlaying to honor those who have served our country and paid the ultimate sacrifice. A few hours later from that he will be at the concert at the lincoln memorial, and according to the schedule, he will address the crowd there before his inauguration address, which the country is looking forward to tomorrow. So again, a short flight from new york city to washington, d. C. , and while this is all happening in the air, we have to also mention what is happening down in the capital, which is the remainder of Donald Trumps team is attempting to get through some of the processes in congress, the procedures that have to happen, so they can officially join his cabinet. As you might know, there has been a contentious debate between the republicans and democrats as to the speed of this happening. And weve been watching Steven Mnuchin, who is the nominee of treasury secretary. In fact we can bring up that live shot if we still have it. It is something that we are watching closely, because of course the account economy is such a focus for everyone, it is at the center of his campaign. There are some issues that Steven Mnuchin is being challenged on, including his background as a banker, as a hedge fund owner, tax policy as well. So we are watching this hearing for any sort of headlines i can give us some daylight as to the policies we will see from donald trump. The years passed and our leader has change, we know that to be true, but the traditions of the president ial inauguration do live on, and mr. Trump, following those traditions, staying overnight at the president s guesthouse and on and not duration eve custom that dates back to 1977. Jon scott took a look back at the history of Inauguration Day. I, Harry S Truman do solemnly swear that i will face faithfully execute the office of the president of the United States into the best of my ability preserve, protect, and defend the constitution of the United States. A timehonored tradition for every chief executive of the United States. So help me god. Congratulations, mr. President. Taken a formal oath of office at the president ial inauguration, some more memorable than others. Let me lift my firm belief that the only thing we have to fear is fear itself. 1933, Franklin D Roosevelt offering solace during the great depression, when tough Economic Times weighed heavily on americans across the country. This great nation will endure as it has endured. Will revive and will prosper. Fdr went on to pull the country out of the depression and was reelected again and again and again. The only president in our history voted into office four times. I, Harry S Truman, do solemnly swear that you will faithfully execute the office of the president of the United States. That i will faithfully execute the office of president of the United States. January 20th, 1949, the first time the entire nation could see its president sworn in. Harry truman, the first televised inauguration. A vast crowd assembles in the Nations Capital for the president ial inauguration. 1961, John Fitzgerald kennedy delivers a soaring inaugural address, stirring the country with a passion that emphasized youth and vigor. The torch has been passed to a new generation of americans, born in this century. But after less than three years in office, our young president is gunned down in dallas. The nation stunned at the killing of our 35th president. I, Richard Milhouse nixon, do solemnly swear. When Richard Nixon took the oath in 19629, it brought a first in president ial history, as his inaugural parade was interrupted by demonstrators. Another first in 1981. Im going to make that old man chase change his attitude if it takes until im 90. A Hollywood Star who became a political star was sworn into the nations highest office. I, ronald reagan, do solemnly swear. Ronald reagan elected in 80 and reelected in 84 became the first leader to take the oath for his second term in the capitol rotunda. His was the coldest inauguration on record at just 7 degrees at high noon. President barack obama, the first africanamerican president , was celebrated by the largest inaugural crowd in history. And now, as president obama goes from the heights of power to the history books, a new leader emerges. We await president elect trumps first words to the nation as our elected leader who follows the footsteps of the 44 president s whose time in the white house began with the inaugural addres address. You know, when you watch that litany in our history you just realize the awe e inspiring stature, the peaceful transition of power in our country, or public traditions continue all through these years relevant to politics. Jenna that is absolutely true, and something we will watch for tomorrow, one of the traditions, i shouldnt say traditions, but customs, is that the nomination of the cabinet posts and the confirmations as well. Lets go back to washington, d. C. On anybody. I completely understand that the hardship that created, as i mentioned, we did go through an independent foreclosure review, and unfortunately there were some issues, very, very low rates relative to everybody else, but there were some issues, and we paid money to those people to make them hole. And i earnestly feel terrible for any mistakes at the bank. Let me comment on also that once a week i chaired an internal committee that dealt with customer complaints. So any complaint went to our regulators, that went to a senator, went to a member of the house or went to what we called came through those, we had a special group of people that reviewed every single one of those complaints, responded to all of your offices, and responded directly to the borrower. We also routinely had the occ come in and monitor and test us and go through all those complaints. It was a very, very big concern, because as you can imagine from both the fdics and occ come on when we took over indymac, the amount of complaints spiked dramatically. As i shared with you, the reverse Mortgage Business isnt thing we did not want to buy, we agreed to by that is part of an overall solution that what we were really trying to do was create a regional bank, and that business really had no part of it. There were about a billion and a half reverse mortgages at the bank owned. There were over 20 billion of reverse mortgages that we didnt own that we serviced for third parties. In the majority of all of those third parties were hudguaranteed mortgages. And as i pointed out, i think there are some very significant issues with the hud program. One, as ive mentioned, is a problem with taxes and insurance that if there is a shortage on taxes and insurance because so many outlives their expectancy that hud forced us to foreclose. There is another problem called the nonborrower spouse, where if the spouse wasnt on the mortgage at the time that you would have to foreclose on the spouse. We discussed these issues with hud. If im confirmed, i would look forward to discussing these with dr. Carson and hope that hud would seriously consider looking at these things, although its not under my responsibilities. I would share my concerns. These are governmentguaranteed programs where we are foreclosing on senior citizens, and i can assure you nothing was more painstaking to me in the whole place, okay. And i will tell you, i cant talk about specific loans, because of privacy, but there are certain things that were in the press, and the most troubling loan we had was actually to the octomom, and we worked very, very hard, that was a terrible situation, and we worked very, very hard to move her to another home that they could afford. But i can assure you that as chairman of the bank i took these issues very seriously. Its not to say that we didnt have certain mistakes, there were mistakes, we regret those mistakes. As i mentioned we had hundreds of thousands of delinquent loans. And just as an aside, when you talk about Loan Modifications, banks are highly in scented to do Loan Modifications. Anybody who thinks that we made more money foreclosing on a loan then modifying alone has no understanding of this. We were highly incentivized, foreclosing on people is a very, very terrible thing to do, but its also very costly to the bank. So we believed in Loan Modifications and we were financially incentivized to offer them when we could, so thank you, senator. Mr. Chairman, i look forward to a second round. Thank you, mr. Chairman, mr. Mnuchin, congratulations on your nomination bread i had a different line of question, but i have to be honest, the information that came to us this morning makes me concerned. You have addressed some but not all. On december 19th of last year, you signed a notarized affidavit on your questionnaire to the finance committee certifying that it was true, accurate, and complete. Question 11 of this questionnaire asks nominees to list all positions held as an officer, director, trustee, partner, proprietor, agent, representative of any consultant, corporation, or other institution. That seems to be pretty pervasive. So its almost like an open book test. And yet you did not answer and that questionnaire listing your position as director of the Cayman Islands Corporation Read as manager, chairman, and director of eight additional shell corporations and holding companies, and nearly 100 million in real estate. And that questionnaire was corrected only after the committee staff, having done their due diligence, brought the missing information to your attention. Now after that, you admitted to being the director of the offshore entity, doing Capital International limited, a Cayman Island corporation. You admitted to moving your hedge fund, doing Capital Partners llc offshore to anguilla in 2005, even though all the business was conducted in new york city. So i have a ton of other questions on policy, but first and foremost is truth and velocity, with the americans need in their treasures treasury secretary, to know if they are going to be asked to do difficult things are challenging things that they understand that there is a system. In essence, isnt it true that what you did here is take these companies, put them offshore, so you could help your clients, who you were making money from, avoid u. S. Taxation . No, that is not true at all. Then why would you, you just described, you just described that the purposes of creating these offshore entities were to help pensions and other entities, and the only reason to go offshore, as senator grassley said when he was i think the chairman of the committee, is the difference between investing in the United States or the Cayman Islands is the possibility of avoiding u. S. Taxes. Your clients, you have made a very clear that you paid your taxes, okay, i will accept your word on that. But the people, or the entities that you are helping in that you are making money from, you were helping them avoid u. S. Taxes. Otherwise they could have invested here. Senator, let me first answer the first part of your question, which i will tell you, and ive said this before and i will repeat it again. I assure you that these forms were very catholic at it. I dont have the form in front of me, but i believed it said to the best of my knowledge it is true. And when i certified these forms i thought it was correct. Perhaps it was a mistake in giving the Committee Information early, and i should have waited until i had finished the 278 and the ethics office. It was not just a function of your office, we were in the process of correcting things. But it doesnt take a Rocket Scientist to understand a word list all positions. Senator, in all due respect, i had a lot of complicated entities. You are referring to i didnt lest the director, i listen to the eye listed the entity. The fact that i didnt list director was not intended to hide anything, and as i mentioned, in regards to my hundreds of millions of dollars in real estate, my lawyer, who is quite sophisticated and this stuff, and actually has done this for many, many nominees before, believed that we filled out the form correctly. Lets get to the heart of my question. The heart of my question is, didnt you create these offshore entities that most americans cant create or take advantage of, in order to help your clients, who you are making money from, avoid u. S. Taxes . No, not necessarily. Okay . So, first of all i want to say, its important that the committee what were you doing it for then . That this was done so that different entities could invest. So sometimes it had nothing to do with taxes, it had to do with what they could investing and couldnt invest in, and as ive said to you, if you want to put me on for the entire hedge fund and pension fund, we should have an irs session to go through these issues, and i would be more than happy to work with you and your offices to go through. These are very complicated issues. I appreciate that, but let me make this simple. One does not go into create offshore entities at the end of the day other than to avoid, in some form or fashion, the tax laws of the United States, that is pretty simple. And so that may even be legal. In which case we should definitely close it. But you have to question whether or not that is the essence of what we want as leadership. And so id like to hear you be more affirmative of saying yes, we are going to close all those down if i could convince the president elect and congress to do so, because what you did may have been legal, but it certainly was to help people and entities avoid u. S. Taxes. First of all, im absolutely committed to work with you and your offices, as ive said, andn tax simplification and to cut down and make sure that we dont let anybody avoid taxes. In certain cases, it was not a function of avoiding taxes, it was to create eligible investments for certain nonprofits. But i agree with you completely, im on board with what you said. Id be happy to work with your office to simplify the tax code. Whose investments were ultimately eligible to avoid taxes. Jenna Steven Mnuchin answering questions to a become the next secretary of treasury. We wanted to talk a little bit more about this and a few other news items, we will continue to keep that live shot up at washington, d. C. , and go back as news warrants, because this hearing is important and we will continue on we suspect for the next several hours. Tom johnson, the senior fellow at the foundation for the defense of democracy, and the Senior Editor of the long word journal, and one of the things that Steven Mnuchin talked about that might be surprising because its not what we initially think about when we think of our treasury secretary, is terror. He talked about being strong and using the treasury to make sure to keep terrorists at bay, essentially. What is the role of the Treasury Department when it comes to fighting terror . Thats right, the Treasury Department plays a key role in identifying assets that need to be targeted for sanctions and fortions. And they regularly release statements and designations targeting iranian assets, targeting alqaeda, alqaeda Senior Leaders and members. Also isis members and leaders. This is a very important part of what the u. S. Government does because a lot of times these designations and announcement by the Treasury Department provide us with a map of what is actually going on and who is who. And it says the u. S. Government is recognizing these organizations, identifying key leadership figures, and is targeting them for financial sanctions. Jenna Interest Income of the u. S. Government also find places like guantanamo bay, for example. Correct, but as you can see we are down to about 45 detainees, as president obama has been desperately trying to transfer as many detainees as we can pray jenna it is one of the things we are watching for, to see if we see more release. I wanted ask you based on your writing this week, of one particular detainee that caught your attention that i think are viewers should know a little bit about. A Yemeni National captured in pakistan all the way back in 2001. He was released this week, why is that significant . This guy was identified by u. S. Officials consistently through the years as being a member of this plot that was aborted on 9 11. Originally, alqaeda wanted to hijack planes leaving from Southeast Asia and do something with them, basically blow them up or ram them into targets, as part of the 9 11 plot. Osama bin laden actually canceled as part of the plot for operational simplicity, he thought he got to couple made it, located in compromise security. But this guy according to u. S. Officials and multiple documents was one of the guys who was elected to take part in a plot. And now since 2015, we count at least three members of this plot have been transferred by the Obama Administration. And its important to note that the Obama Administration itself determined that mohamed and some of these other guys were very dangerous. And yet over time, what is happened is that the Obama Administrations review board, which is going through these cases, has decided to take on more and more risk and transferring them. So the idea that the skies being transferred because hes an innocent or is basically not a threat is incorrect. Whats happened is that the u. S. Government under president obama has decided they are willing to take on more risk and they think they could ship this guy off somewhere and prevent him from getting back into the game, at least in the short term. Jenna all right, that that is something we want to take Pay Attention to. Stick around, because you mentioned isis and funding, we are seeing this new era of terrorism and funding, especially with online, so i want to bring those topics together with the news that weve got on our fight against isis earlier this morning. But we want to go back to the hearing just briefly, it is our understanding that senator wyden is speaking again, not send or wide enough, the questioning of Steven Mnuchin is continuing and we just want to dip back in for a moment. Ive always said that every business looks really simple unless you are the one who estimate the decisions on it. And how far ahead you have to make the decisions and how you find employees and how you train employees and how you meet all of the federal regulations. Well, youve actually worked with those rules. Youve actually been forced to learn some things that are going to be essential to your job. And its a pretty unique situation. This is the biggest business in the world, and we dont even make decisions timely. We are still working on last october 1st spending bills. There are a lot of things around you that have to change. Jenna back now on set in new york city, we want to continue our conversation with tom a little bit about terrorism, as we mentioned part of the Treasury Departments responsibility is to go after terrorists and attempt money. If you dont have money you cant operate, we know that to be true. Anton, back with us, one of the headlines that we saw this morning, big news coming from the white house, from this current demonstration. As a bombing on a key isis stronghold inside libya, which we havent heard a lot about recently. What is significant about that now at this point in the administration . Why was it done, what do you make of the timing and how, quite frankly, effective it is . Well, going back to last year, what happened is that isis had been maintaining this stronghold in sirte, libya, around the mediterranean coast, and the obama administer asian and local libyan partners organize an offensive to kick them out of sirte. To put this in perspective, you hear a lot about muzzle, they refer to sirte is the third most important city, so thats a very important stronghold in north africa that they lost in december, they were basically eradicated after putting up a fight. What happens is that some of these fighters have basically fled to the desert regions south and west of sirte, so these bombings overnight were targeting two Training Camps at the Defense Department says were basically being used to reorganize operations and try to launch themselves back into more Populated Areas of libya. Jenna our current secretary of defense was speaking a few moments ago, and our very own Jennifer Griffin shouted a question at him and asked carter. Because one of the parts of the story that is raising some eyebrows, or at least getting some attention, is the way that we went after these isis fighters using b2. So Jennifer Griffin shouted this to asked carter and say, why does he use the b2 . And he responded it was a decision made by the commander. It was a best capability to use. There were other options. Why the attention on using a b2 or not, tom . I think its pretty strange grade i think the b2 has a pretty long flight radius, coming from far away, not really clear to me where they came from. I saw some reports and it came all the way from missouri or Something Like that or were refueled in missouri. Im not really sure, but the bottom line is it is sort of a strange way to go about this bombing. Also what the defense barman said is that drones were used in the air strikes, which are of course more typical. You think there would be more assets that were closed by other than the longrange b2 bombers to carry the cell. The bottom line for my perspective is hopefully they are doing the most costeffective thing, strategically wise thing, but unfortunately we have seen time and again that is not the case. Jenna some are speculating, going back to the timing, this is the day before the inauguration of a new president , and there is a lot of uncertainty around the world. Some are speculating that the reason why these particular vehicles, if you will, were used, was to send a message to people, i shouldnt say people come about countries like russia, for example. Is there a message that could be sent by using a b2 . I dont know, the way i look at this is that president obamas way out, if you think about it, i dont doubt his intention to try to bring an end to the 9 11 wars, he wanted to take america off of war footing. That is an understandable sentiment. However, what we saw four years now from president obama was his constant insistence on downplaying or dismissing the threat. As he leaves office, today is his last full day, think about this. The u. S. Is at war in more countries today than they were in january, 2,900 yes, we dont have largescale troop deployments like we did in iraq and afghanistan, but the u. S. Is bombing in libya, somalia, syria, iraq, afghanistan, around the world. Where we are not bombing, we are relying on our allies. The bottom line is the trumpet administration inherits a global war, war that president obama didnt want to be and honest about. Jenna that gets us an idea of again what president elect donald trump is inheriting as far as our actual security. You bottom lined it, thank you very much, it is something we will pay close attention to. Obviously over the next several days and several weeks bread one of the areas there is a lot of focus is the inauguration parade we are going to return to capitol hill, Steven Mnuchin again, the nominee for treasury secretary. Ive talked to the president elect, he believes we can bring trillions of dollars back on shore so that that money is invested in american businesses and creating jobs, and i absolutely look forward to working with you and your office on tax reform, bringing down Business Rates for big businesses and small businesses, and making America Business the most competitive in the world. So that we are not shipping jobs overseas and money overseas. Thank you, and i have some questions about the debt, and how we are going to handle that and as budget chairman im interested, but again, it gets into those number minutia, so i will submit that. Welcome, mr. Mnuchin. Recovering governor from delaware, and a lot of my time as governor, and even now, i think about how we create a nurturing environment for job creation and job preservation bread i want to talk about that in just a moment. But before i do, some of my colleagues who raise tax havens, Cayman Island, a gorilla, you have mentioned the irs. In the past years, several times in the past several years, the commissioner of the irs, its a position that he has been selected to serve, its a fiveyear term, i think he has maybe another year to run on it. He has in his 70s, he took his job not because theres something inspired to do, but he was asked to do it for his country. He is one of the finest Public Servants i know, he is often operated, there was an attempt to impeach him in the house of representatives which i that was lunacy. He said to us many times, as has the general accountability office, and you have said here today, we give the irs less money than they need, they dont have the people they need, they dont have the technology that they need, for every dollar we invest in the irs, we get at least 4 back, i have seen some estimates as much as 10. This is not so much a message for you, i think youve got it. But the message is really for us, who are interested in raising some revenues and not having to raise taxes, that is a good place to start. I was encouraged by what you had to say. Cfpb, just real quickly, your take on that and are they doing were worth keeping . Well, first of all, okay, its a complicated issue. But, yes. The Biggest Issue i have with the cfpb is that i dont believe that they should be funded out of profits from the federal reserve. I think they should be funded out of an appropriation process. Thats good, thanks very much. When i think of that nurturing environment i mentioned earlier for job creation and job preservation, there are a lot of components to it. Among them are funding research, actually making sure that were doing a good job protecting intellectual property. Sensible tax code, common sense regulation. Affordable health care, finding ways to get better results may be for a little bit less money. We have had people who have suggested to us that one of the components to grow gdp is a substantial investment in infrastructure. I have suggested for a number of years that we use, an approach we have taken for years, and that is the people, the businesses that use our Transportation System would actually pay for them, we have done that for half a century and i think that makes sense. There are other ideas as well, vehicle miles traveled, where sort of like we figure out how many miles the vehicle is traveling and assess a fee. There are different approaches to that. But there is some interest in the incoming a administration in infrastructure investment. Theres another time to talk about that. One of the ways to grow gdp or grow jobs is to export, do a better job of exporting our products and getting into other markets. The Transpacific Trade Partnership proposed to take on a lot of barriers overseas and enable us to have better sx to those markets. Also at the same time, renegotiated nafta, as you may know. That seemed to me like a pretty good deal. And i understand that there is an interest in the administration in renegotiating nafta. We did that in tpp, but your thoughts on the trade policy, especially the tpp . First of all, thank you, youve raised a bunch of very, very important issues. Im just going to ask you to go to that one issue if you would. Its not a trick question. I wrote down five of them i wanted to comment on. Just on trade agreements. I think as you know, the president elect is very much interested in free and fair trade, and as you commented on, this is not about limiting imports, this is about growing exports as much as we can be. Youve also commented on intellectual property, i think one of the biggest problems, an and, our American Intellectual property is not being kept, and it is being taken in foreign countries. Youve mentioned nafta, the president elect is very much interested in renegotiating nafta, so that we can keep more jobs here. I think, as you know, he has picked up the phone and called many ceos, i cant member the last time a president or president elect did that and worked for the American People. Jenna Steven Mnuchin answering questions in the Senate Hearing to assume his new position, potentially, as treasury secretary. We do expect his approval despite the opposition. Rick perry is also on capitol hill, the nominee for energy secretary. Quite a lot of news happening down in the capital, eric, about 24 hours before we will see the president inaugurated. A eric but first they have some pretty sharp questions from the democrats with mr. Mnuchin especially dealing with the fact that he seemed to leave information out of his Financial Disclosure forms, the 100 million in real estate he has, he said that was his lawyer, and he also fought back against the criticism over the foreclosures with one west bank that he bought, saying that that was the system and that he very much regretted many of those disclosures. Jenna as a reminder, we are in somewhat of uncharted territory when it comes to the nominees for trumps cabinet. You have these individuals that are not public officers that have operated very much in the private sector that are entering into this New Territory for the first time. And there are growing pains at that. Some regulations as well. Eric exactly, for the one who wasnt who was in the public sector, rick perry said he regrets having said that the department of energy that he is slated to lead, that he talked about eliminating that five years ago. Jenna we all say things we dont mean now and again. We are very grateful you are joining us, we will see you back here in an hour, outnumbered starts right now. Fox news alert, we are awaiting president elect Donald Trumps arrival in washington, the president elect now in the air after leaving his home in new york city just a short time ago. This is outnumbered, and sandra smith, and here today is meghan mccain, host of after the bell on fox business, melissa francis. A democratic static strategist julie roginsky, and todays oneluckyguy, fox news analyst and host of media buzz, howard kurtz is here and you sir are outnumbered. Howard great to see you. Sandra its been a while, youre talking about the last time you were run accounts, what were we doing question work you are plain the part of donald trump . Howard i got talked into doing that by you. [laughter]