Sen. Bob Menendez (D-NJ) repeatedly pressed Trump Treasury Secretary nominee Steven Mnuchin on Thursday about his initial failure to fully disclose the extent of his involvement in an off-shore Cayman Islands hedge fund and urged him to crack down on the loophole that allows investors to avoid taxes by moving money there. But Mnuchin repeatedly dodged questions about the purpose of these funds and would only commit to working to “simplify the tax code.”
At the Senate Finance Committee confirmation hearing, Mnuchin acknowledged, amid questioning by Sen. Ron Wyden (D-OR), that corporations he had registered in Anguilla and the Cayman Islands — tax havens often used by rich investors to avoid U.S. taxes — were little more than post office boxes, with no employees or offices.
During his questions for the nominee, Menendez first asked why Mnuchin’s initial financial disclosure forms had not included nearly $100 million worth of real estate assets and the fact that he was a director of Dune Capital International Ltd. in the Cayman Islands. “It’s almost like an open-book test,” he noted, “and yet you did not answer in that questionnaire listing your position as director of a Cayman Islands corporation and as manager chairman and director of eight additional shell corporations.” The information was corrected, Menendez observed, “only after the committee staff having done their due diligence brought the missing information to your attention.”
Mnuchin explained that the forms “were very complicated” and that he had should have waited until his team could fully review his holdings.
Menendez then pressed him on why he had created the entities, noting that Mnuchin had sworn to the committee that he had paid all federal taxes on his off-shore investments but may have aided others he was “helping and making money from” avoid doing so.
Mnuchin said that his customers did not necessarily move their money to off-shore tax havens to avoid taxes, observing “these are very complicated issues.”
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