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Treasury Secretary Steven Mnuchin’s Hollywood ties spark ethics questions in China trade talks

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/ Source: CNBC.com

By Emma Newburger/CNBC

Treasury Secretary Steven Mnuchin, one of President Donald Trump’s key negotiators in the U.S.-China trade talks, has pushed Beijing to grant the American film industry greater access to its markets.

But now, Mnuchin’s ties to Hollywood are raising ethical questions about his role in those negotiations. Mnuchin had been a producer in a raft of successful films prior to joining the Trump administration.

In 2017, he divested his stake in a film production company after joining the White House. But he sold that position to his wife, filmmaker and actress Louise Linton, for between $1 million and $2 million, The New York Times reported on Thursday. At the time, she was his fiancée.

That company, StormChaser Partners, helped produce the mega-hit movie “Wonder Woman,” which grossed $90 million in China, according to the Times. Yet, because of China’s restrictions on foreign films, the producers received a small portion of that money. Mnuchin has been personally engaged in trying to ease those rules, which could be a boon to the industry, according to the Times.

Mnuchin’s 2018 disclosure, which was obtained by the Times, shows StormChaser listed as one of Linton’s assets. Because the couple is now married, the asset is considered Mnuchin’s. And he is owed that same $1 million to $2 million, with additional interest, from the company in 2026, the 2018 form disclosed.

Senate Democrats on Thursday questioned Mnuchin about his financial holdings. He responded during the hearing that he has complied with rules of career ethics officials inside the Treasury Department, but declined to discuss details of the transaction.

“I am advised by people at Treasury that I am fully in compliance and I have no ethical issues,” Mnuchin said at the hearing. The Office of Government Ethics has not yet certified his 2018 financial disclosure, the first since his marriage to Linton, the Times reported.

Since trade talks began last year, film lobbyists have met with Mnuchin’s top deputies and officials from the Commerce Department and the office of the U.S. Trade Representative. Mnuchin has reportedly been particularly responsive to lobbying from the film industry.

StormChaser did not immediately respond to CNBC’s request for comment.

A Treasury Department spokesperson said in a statement: “Treasury’s career ethics lawyers certified the Secretary’s financial disclosure on June 27, 2018 and identified no outstanding conflicts of interest. The Secretary is in full compliance with his ethics agreement. We continue to work with the Office of Government Ethics to obtain certification of the disclosure.”

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Bank CEO Stephen Calk charged with soliciting Manafort for Trump admin job

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By Tom Winter, Joe Valiquette and Adiel Kaplan

Bank CEO Stephen Calk tried to exchange $16 million in loans to Paul Manafort for a top position within the Trump administration, according to an indictment against the banking executive unsealed Thursday.

Calk, the president of the Federal Savings Bank, approved millions in “high-risk loans in an effort to secure a personal benefit, namely to an appointment as Secretary of the Army, or another similar high-level position in the incoming presidential administration,” said Deputy U.S. attorney Audrey Strauss of the Southern District of New York.

Stephen CalkThe Federal Savings Bank

Federal investigators were probing last year whether Manafort, the former Trump campaign chair, promised Calk a job in the White House in return for $16 million in home loans, NBC News first reported in February 2018.

Calk, who surrendered to the FBI Thursday morning, allegedly approved multiple high-risk loans for Manafort, who urgently needed them to avoid foreclosure. While the loans were pending approval, Calk allegedly provided Manafort with a ranked list of positions he desired. At its head were the two top positions at the U.S. Treasury, followed by Secretary of Commerce and Secretary of Defense. The list also included 19 high-level ambassadorships, among them ambassador to the United Kingdom, France, Germany and Italy.

Manafort received three separate loans in December 2016 and January 2017 from Federal Savings Bank for homes in New York City, Virginia and the Hamptons. The three loans were questioned by other officials at the bank, two sources with direct knowledge of the matter told NBC News last February.

The loans raised red flags at the bank in part because of Manafort’s history of defaulting on prior loans and that the size made Manafort’s debt the single largest lending relationship at the bank, according to prosecutors. Calk was required to authorize an unusual lending scheme to avoid passing the lending cap to a single borrower.

In exchange, Manafort provided Calk with personal benefits, prosecutors said. The bank CEO was appointed to Trump’s Council of Economic Advisers in August 2016, just days after the bank approved a proposed $9.5 million loan to Manafort.

According to the indictment, Manafort and his son-in-law, Jeffrey Yohai, approached the bank in an effort to refinance loans tied to a construction project in Los Angeles.

During a meeting held on July 27, 2016 — while Manafort was Trump campaign chairman — Calk allegedly broached the idea of him joint the Trump campaign. By the next day, the first loan of $5.7 million was approved. Less than a week later, Manafort offered Calk a position on the economic advisory committee for Donald Trump, according to the indictment.

Calk issued another loan for over $9 million later in the fall of 2016. Then, Calk reached out to Manafort asking him if he was involved in the Trump presidential transition following the election, according to the indictment.

Manafort allegedly responded, “total background but involved directly.”

Shortly after the election, in November or December 2016, Manafort recommended Calk for an administrative position, leading to a formal interview of Calk for Under Secretary of the Army at the transition team headquarters in Trump Tower in 2017. When Manafort made the recommendation, he had more than $6 million in loans pending approval at Calk’s bank.

Calk ultimately was not hired for the position.

Months later, the loans to Manafort were downgraded by the banks regulator, the Office of the Comptroller of the Currency. Calk allegedly lied to regulators, telling them he never desired a position in the presidential administration.

A November 14, 2016 email Calk sent to Manafort that included his resume and list of desired positions in ranked order was as exhibit in the Manafort trial.

Charlie Gile contributed.



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European elections UK results time: What time is the result of EU election due?

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THE EUROPEAN elections kicked off in the UK this morning, with polling stations open from 7am. What time is the result of the EU election due?

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Trump lashes out at Rex Tillerson for saying Putin out-prepared him

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By Allan Smith

President Donald Trump lashed out at Rex Tillerson on Thursday morning after his former secretary of state reportedly told a House committee that the president was ill-prepared for a 2017 meeting with Russian President Vladimir Putin.

“Rex Tillerson, a man who is ‘dumb as a rock’ and totally ill prepared and ill equipped to be Secretary of State, made up a story (he got fired) that I was out-prepared by Vladimir Putin at a meeting in Hamburg, Germany,” Trump tweeted. “I don’t think Putin would agree. Look how the U.S. is doing!”

The tweet followed a Washington Post report that Tillerson told the House Foreign Affairs Committee that Putin out-prepared Trump for the meeting at the 2017 G-20 summit. Tillerson said Putin’s higher level of preparation put Trump at a disadvantage during the meeting.

The U.S. had anticipated a shorter meeting between the two leaders, but it instead turned into a two-hour plus discussion of geopolitical issues, committee aides told the Post. Tillerson spoke before the committee for seven hours in a closed-door session on Tuesday.

“We spent a lot of time in the conversation talking about how Putin seized every opportunity to push what he wanted,” a committee aide told the Post. “There was a discrepancy in preparation, and it created an unequal footing.”

Tillerson spoke with a bipartisan group of lawmakers and staff at the request of the panel’s chairman, Rep. Eliot Engel, D-N.Y., the newspaper reported. Unlike Trump’s solo meeting with Putin in Helsinki last summer, advisers — including Tillerson — were present alongside him at the meeting with the Russian president in Germany.

Tillerson and Trump had sparred for months before the president fired him in March of last year. The former secretary of state nearly resigned in the summer of 2017 amid mounting policy disputes and clashes with the White House, NBC News reported, citing senior administration officials. As tensions came to a head, Tillerson called Trump a “moron” following a meeting at the Pentagon with Cabinet officials and members of Trump’s national security team, three officials familiar with the incident said.

In December, Tillerson told CBS News that Trump was “undisciplined,” didn’t read much and tried to do things that would violate the law. In response, Trump said Tillerson “didn’t have the mental capacity needed” to be secretary of state.

“He was dumb as a rock and I couldn’t get rid of him fast enough,” Trump tweeted. “He was lazy as hell.”

In hiring Tillerson to run the State Department, Trump pointed to the former Exxon Mobil executive’s “vast experience at dealing successfully with all types of foreign governments” and called him “a world class player and dealmaker.”

“He will be a star,” Trump tweeted after Tillerson was sworn in.



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