Saturday, November 12, 2016

Donald Trump’s Financial Advisory Team Stocked With Wall Streeters

Many Republican policy hands and CEOs involved in past campaigns have steered clear of Mr. Trump

From left, Cerberus Capital CEO Stephen Feinberg, former SEC commissioner Paul Atkins and former Goldman Sachs banker Steven Mnuchin are advising President-elect Donald Trump during the transition period. ENLARGE
From left, Cerberus Capital CEO Stephen Feinberg, former SEC commissioner Paul Atkins and former Goldman Sachs banker Steven Mnuchin are advising President-elect Donald Trump during the transition period. Photo: L-R: Peter Reitzfeld for The Wall Street Journal; Brendan Hoffman/Getty Images; Andreas Branch/Patrick McMullan
Donald Trump’s successful insurgent bid for the White House promised to upend a global power structure that benefited large corporations. Now, several Wall Street financiers and other successful business leaders could be in line to run top posts in his presidential administration.
People close to Mr. Trump have said he is considering Steven Mnuchin, a former Goldman Sachs Group Inc. banker who became his national campaign finance chairman in May, as his pick for Treasury secretary. If tapped for the job, Mr. Mnuchin would become the third Goldman alumnus in the past 20 years to head the Treasury, following Robert Rubin and Henry Paulson, who both served as the bank’s chief executive.
After a 17-year career at Goldman, where Mr. Mnuchin led the mortgage-trading department and was the bank’s chief information officer, he turned to investing. He briefly worked for a hedge fund tied to George Soros, the big Democratic donor. In his closing campaign ad, Mr. Trump featured both Goldman and Mr. Soros as “the establishment…who control the levers of power in Washington.”

Advisers to Mr. Trump have said promptly filling senior appointments would help calm jittery markets, which saw volatility soar after it became apparent that Mr. Trump, a political outsider who broke with the political philosophy that has defined both parties, would win the election.
“Just as he comforted a lot of people when he picked Mike Pence as his running mate, they’ll be much more comfortable when they see what the team will be,” predicted Wilbur Ross, the private-equity investor who has advised Mr. Trump on economic policy. Business leaders have been “incorrectly worried about what might happen under Trump,” Mr. Ross said.
In addition to his role as the campaign’s finance head, Mr. Mnuchin became a key economic adviser along with Sen. Jeff Sessions (R., Ala.) and the senator’s former aide, Stephen Miller, who served as the campaign’s policy chief.
Mr. Trump’s campaign advisers included an eclectic mix of business associates such as Mr. Ross and Thomas Barrack, the Los Angeles-based founder and executive chairman of investment firm Colony Capital Inc.
Mr. Trump is also drawing from conservative economists and business leaders who have long championed lower taxes and less regulation, such as Stephen Moore of the Heritage Foundation and David Malpass, the former chief economist at Bear Stearns who is handling the presidential transition for the Treasury Department and economic issues.
Working under Mr. Malpass to oversee financial regulation for the transition is Paul Atkins, a former Republican commissioner of the Securities and Exchange Commission and a critic of post-financial-crisis rule making.
Critics of U.S. trade policy, including Peter Navarro, economics professor at the University of California, Irvine, and Dan DiMicco, former CEO of steelmaker Nucor Corp., also have joined Mr. Trump’s team.
Uncertainty over Mr. Trump’s executive appointments runs unusually high not only because he is a political outsider who has never served in government, but because many Republican policy hands and CEOs involved in past campaigns steered clear of Mr. Trump.
The result is that Mr. Trump’s economic group relied on a closer-knit circle of advisers animated less by an overarching political philosophy than by their faith in Mr. Trump.
Messrs. Navarro and Ross said Tuesday night revamping the health-insurance markets created by President Barack Obama’s Affordable Care Act would be a priority after Mr. Trump takes office. “That’s a No. 1 target and played a big role in his victory,” Mr. Ross said. It was unclear how high financial deregulation would rank in the Trump administration.
In August, Mr. Trump announced an economic advisory team that included Mr. Barrack, who advised the campaign on banking, regulation and international finance.
Donald Trump's unpredicted victory over Hillary Clinton in the 2016 presidential election has launched the nation’s capital into a zone of uncertainty. WSJ's Gerald F. Seib discusses the political shakeup and what needs to happen next. Photo: AP
John Paulson, a hedge-fund billionaire, was tapped as an adviser because of his understanding of housing, one adviser said. Mr. Paulson, who made a spectacularly well-timed bet shorting the U.S. subprime mortgage market in 2007, has more recently taken large stakes in the mortgage-finance companies Fannie Mae and Freddie Mac, which have been in a government-run conservatorship since the 2008 financial crisis. Shares of Fannie Mae were up nearly 17% to their highest levels of the year on Wednesday.
Stephen Feinberg, the co-founder of Cerberus Capital Management LP, had a busy morning Wednesday tracking volatile markets but was relieved by Mr. Trump’s victory, a person familiar with the matter said. Mr. Feinberg came on board as an economic adviser because he believed Mr. Trump’s proposals would reverse low capital spending by corporations and spur companies to hire more workers and increase wages, the person said.
The Trump campaign sought Mr. Feinberg’s assistance because of his experience turning around multiple businesses at Cerberus, including in the auto industry, people close to the campaign said. Cerberus became well known for buying Chrysler in 2007, only to have its equity wiped out in the car maker’s subsequent bankruptcy.
—Sharon Terlep contributed to this article