donald trump<u+2019>s choice for treasury secretary, steven mnuchin, earned tens of millions of dollars from a 2015 bank sale that got a boost from an array of nonprofit groups that had one thing in common <u+2014> they had received tens of thousands of dollars each from the bank<u+2019>s foundation, which was run by mnuchin. the sale of onewest, a bank that mnuchin co-founded and chaired, to cit group for $3.4 billion drew significant opposition from public interest groups because onewest had been accused of wrongful foreclosures and racial discrimination in its mortgages and small-business loans. story continued below but a parade of community-based nonprofits stepped forward to testify to the federal regulators considering the merger about the good corporate citizenship of onewest. all of the groups <u+2014> ranging from a pair of local boys &girls clubs to a pair of junior achievement clubs <u+2014> were beneficiaries of grants from the bank<u+2019>s charitable arm, the onewest foundation, which mnuchin chaired, according to a politico review of filings with the internal revenue service and the federal reserve. in all, 14 groups that sent letters to the fed in support of the merger received a combined total of $2.5 million from the onewest foundation in the four years leading up to the merger. in their letters, the groups lauded onewest<u+2019>s support for community groups. in seven of the letters, the groups acknowledged the dollar amounts they received from mnuchin<u+2019>s charity arm; in the other seven, they referenced only having enjoyed the support of the bank. but at least two of the nonprofits acknowledged to politico that it was explicitly asked by onewest to write a supportive letter. in addition, when the fed convened public panels to debate whether the merger should be approved, representatives of eight of the nonprofits that received foundation money are listed as having spoken in its favor. by victoria guida , ben white and zachary warmbrodt the support paid off. the federal reserve cited the testimony about the bank<u+2019>s charitable contributions and community service in its decision to approve the merger, which led to mnuchin reportedly receiving a $10.9 million payout when he left cit in march. he still owns an estimated $97 million worth of cit stock, which he could sell tax-free if he becomes treasury secretary. and, after the merger, seven of the groups that supported it received an additional $3.45 million from the foundation. the role of onewest foundation beneficiaries in advocating the sale could become an issue for mnuchin during his confirmation process. the relationship opens mnuchin to allegations that charitable funds he controlled were used to boost his businesses <u+2014> a dynamic that could raise concerns about the same prohibition on self-dealing that trump<u+2019>s own foundation recently admitted to violating. <u+201c>this is exactly what appeared to happen with the trump foundation,<u+201d> said rosemary fei, a lawyer with adler & colvin in san francisco who advises nonprofit organizations. <u+201c>it is not an appropriate use of charitable assets to benefit an affiliated business.<u+201d> trump came under fire when it was revealed that his foundation had used charitable funds to settle his business<u+2019> legal disputes and buy a portrait of trump, though it<u+2019>s unclear if that<u+2019>s the violation the foundation acknowledged in irs filings made public last week. mnuchin and representatives from trump<u+2019>s transition team did not respond to messages seeking comment. neither did representatives for onewest or former officers of the onewest foundation, which ceased operating not long after the merger. the foundation formed in december 2009 with $10 million donated by onewest bank, according to tax filings. as a private foundation, it didn<u+2019>t solicit donations and gave only to other charities. it contributed to 29 charities primarily in and around los angeles, ranging from the ucla foundation to la neighborhood housing services, irs records show. a majority of the funds <u+2014> $6 million <u+2014> went to groups that supported the merger. according to tax returns filed this year, the foundation was <u+201c>liquidated<u+201d> at the end of last year, and <u+201c>all assets were distributed to qualified charitable organizations and/or were related to operating and administrative expenses as reported on the tax return.<u+201d> by louis nelson and darren samuelsohn cedars-sinai, a nonprofit hospital in los angeles that received $301,000 from the onewest foundation before the merger, <u+201c>was asked by onewest bank to send a letter describing its philanthropic contributions to cedars-sinai, which we were pleased to do,<u+201d> said a spokesman. but the spokesman, who requested not to be named, said, <u+201c>the request that cedars-sinai send a letter was not in any way a condition for any donations cedars-sinai received from onewest bank.<u+201d> the other nonprofit groups that received grants and advocated for the merger didn<u+2019>t respond to requests for comment. but the groups were effusive in their praise of the bank in their letters to the fed. <u+201c>we would like to also congratulate you on the proposed merger with cit bank, and look forward to providing any information or assistance in the transition that supports the efforts and your overall objectives,<u+201d> two leaders of the boys & girls clubs of santa monica wrote to regulators. the organization received $75,000 from the bank<u+2019>s foundation in the preceding three years. the year after it sent the letter, it received $125,000. <u+201c>we are also supportive of the merger of onewest and cit,<u+201d> wrote mary jane stevenson, executive director of city year los angeles, which received $300,000 in the previous three years. the year after sending the letter, city year received $1 million from the foundation. a city year spokeswoman said onewest asked the organization to submit the letter but it wasn't a condition for a donation. stevenson suggested the letter was not abnormal for her nonprofit. <u+201c>city year has on occasion contributed letters describing our partnership with corporate supporters,<u+201d> she told politico. <u+201c>onewest bank has been a longtime community partner to city year los angeles and we have witnessed their commitment to high-need communities.<u+201d> in a separate letter to the fed, the president and ceo of junior achievement of southern california, which received $301,000 from onewest foundation from 2011 to 2014, wrote, <u+201c>i am writing to lend my voice in support of the proposed onewest bank merger with the cit group.<u+201d> in 2015, the year after the letter, it got $1 million. companies commonly use philanthropy to advance their interests, but they are not allowed to demand favors in exchange for donations, according to will brown, a professor and director of the nonprofit management program at the bush school of government and public service at texas a&m university. by cogan schneier and timothy noah jordan libowitz, a spokesman for citizens for responsibility and ethics in washington, a watchdog group that predominantly criticizes republicans, said: <u+201c>this raises some serious questions about the use of the bank<u+2019>s foundation<u+2019>s money. were they being used solely for charitable purposes or for the benefit of the bank? it makes you question how this testimony came about.<u+201d> crew has previously called out companies such as comcast and time warner cable for using affiliated charities in ways that seemed to promote their proposed merger. their charities honored a federal regulator who was considering their merger in 2014. at least one critic of onewest<u+2019>s merger at the time asked regulators to investigate whether there was any connection between the foundation<u+2019>s donations to the nonprofits and their support for the merger, but there<u+2019>s no evidence the fed looked into it. meanwhile, opponents of the merger zeroed in on another source of support. the fed received 593 petitions in support of the banks<u+2019> request to forgo a public hearing on the merger, which could have slowed down the process. but all of the petitions came from yahoo email accounts, even though yahoo<u+2019>s share of the email market at the time was 3 percent, according to a letter to regulators from the california reinvestment coalition, an advocacy group that opposed the merger. the letter claimed that when attempts were made to contact those 593 petitioners about their support, 30 percent of the emails bounced back, and other petitioners replied saying they did not in fact support the merger, according to the letter. in addition, many of the messages were time-stamped around 2 a.m. on the night of feb. 13, 2015. <u+201c>there is no reasonable explanation for all of these oddities,<u+201d> the california reinvestment coalition said in the letter, which was addressed to the office of the comptroller of the currency <u+2014> part of the department mnuchin is now being nominated to lead. earlier this month, the california reinvestment coalition and the fair housing advocates of northern california asked the u.s. department of housing and urban development to investigate onewest bank for allegations of violating the fair housing act by <u+201c>redlining,<u+201d> such as failing to locate branches in minority neighborhoods and making fewer loans to borrowers of color. by ben white and jake sherman the organizations vowed tuesday to mount a tough confirmation battle against mnuchin. <u+201c>mnuchin<u+2019>s nomination and his track record, detailed in a redlining complaint filed with hud earlier this month, make it clear, the fox has been nominated to guard the henhouse,<u+201d> paulina gonzalez, executive director at the california reinvestment coalition, said in a statement. <u+201c>the many families who lost their homes at the hands of onewest will be watching closely and will also want to share their experiences as part of any confirmation hearings.<u+201d> mnuchin led a group of investors, including george soros and john paulson, in buying onewest, then known as indymac, in a 2009 fire sale, with a promise from the federal deposit insurance corporation to shoulder loan losses, bloomberg reported . he quickly returned the bank to profitability, but not without extensive accusations of wrongful foreclosures. in october 2011, about 100 people protested at mnuchin<u+2019>s home in los angeles. one held a sign that said, <u+201c>steve mnuchin, stop taking our homes.<u+201d> by michael grunwald by bill scher by thomas wright by joshua zeitz
mnuchin foundation donated to groups that vouched for his bank - politico
isaac arnsdorf kenneth p. vogel victoria guida ben white zachary warmbrodt louis nelson darren samuelsohn ben white jake sherman michael grunwald