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On Tuesday, former Treasury Secretary Steve Mnuchin closed a $1 billion equity deal to rescue the faltering New York Community Bank. On Thursday, he said he was working to buy TikTok with a group of investors after the House passed a bill demanding that Chinese firm ByteDance sell the app.\u00a0It\u2019s been the source of considerable Gen Z (and probably a lot of millennial) panic, as the realization dawns that the defining social-media platform of the 2020s really could go away.<\/p>\n
After leaving the public eye for years after Joe Biden\u2019s electoral defeat of Donald Trump in 2020, Mnuchin is back in the business pages. It\u2019s just the latest in a wide-ranging career that\u2019s brought him from the Goldman Sachs<\/a> trading floor to Hollywood\u2014Mnuchin has production credits on \u201cAvatar\u201d and \u201cThe Lego<\/a> Batman Movie.\u201d<\/p>\n Mnuchin\u2019s interest in TikTok dates back at least to his time in Trump\u2019s cabinet, when he urged the then-president to block Chinese company ByteDance from acquiring TikTok<\/a>, back when it was called musical.ly. Mnuchin\u2019s experience as a dealmaker and fundraiser, though, goes back much further, to the very beginnings of his career in business.<\/p>\n Mnuchin is a Wall Street veteran through and through. His father, Robert Mnuchin, was a partner at Goldman Sachs who worked at the bank for over three decades<\/a>. After Steve graduated from Yale in 1985<\/a>, he took a job at his father\u2019s company, working in Goldman\u2019s mortgage-backed securities department.\u00a0<\/p>\n Working his way up to partner and Chief Information Officer, Mnuchin left Goldman in 2002 and spent over a decade bouncing around between various management roles, ranging from film to California-based OneWest Bank to serving on the Sears board<\/a>. (Dune Capital, a hedge fund that Mnuchin co-founded with seed money from George Soros, put up some of the money for David Cameron\u2019s 2009 movie Avatar, <\/em>alongside other hits such as Magic Mike XXL<\/em>.)<\/p>\n Donald Trump tapped Mnuchin to lead the finance arm of his presidential campaign in 2016, and nominated him to be Secretary of the Treasury after the election<\/a>\u2014the first Wall Street vet to hold the role since his old Goldman Sachs boss Hank Paulson nearly a decade earlier. Democrats were unanimously opposed to Mnuchin, pointing to his allegedly predatory track record of foreclosing on California homeowners<\/a> while serving as OneWest Bank\u2019s CEO. But Mnuchin was narrowly confirmed by the Senate, and was one of the few Trump cabinet members to remain in office for all four years of Trump\u2019s term.<\/p>\n As Treasury Secretary, Mnuchin stuck close to the party line, emerging as an unflinching Trump ally: he pushed to enact Trump\u2019s tax cuts and supported rolling back the Dodd-Frank Act passed after the 2008 financial crisis, which weakened the Consumer Financial Protection Bureau. But his work across the aisle during a crisis will likely be his legacy, as he worked with Speaker Nancy Pelosi to shepherd the Covid-19 stimulus bill that he helped through Congress<\/a>: allocating nearly $1 trillion in federal aid and temporarily expanding the social safety net at a sorely needed time.<\/p>\n In 2021, after leaving office, Mnuchin founded Liberty Strategic Capital, a $3.1 billion private equity firm focusing on tech and fintech<\/a>. By far its highest-profile investment to date came earlier this week, when it handed New York Community Bank a $1 billion lifeline<\/a> to keep it afloat after the bank\u2019s shares plummeted off ratings downgrades and concerns over its struggling commercial real estate portfolio<\/a>.\u00a0<\/p>\n \u201cIt\u2019s a top-20 bank. We put up a lot of capital which will stabilize the business, brought in Joseph Otting as CEO, and I think there\u2019s going to be a great turnaround,\u201d Mnuchin said of the deal on CNBC on Thursday<\/a>.<\/p>\n A potential TikTok purchase would be a far bigger\u2014and far more complicated\u2014prize. In a deal with high geopolitical stakes, Mnuchin\u2019s fundraising ability can only take him so far.<\/p>\n \u201cI\u2019m assuming he can raise the money easily enough\u2026I don\u2019t know what the price would be. [But] I think the identity of the CEO of the buyer is a pretty low level consideration,\u201d Columbia Law professor and corporate governance expert John C. Coffee told Fortune<\/em>. \u201cThis is not an ordinary business transaction between a buyer and a seller. It\u2019s two sovereigns facing off, and one may want to say, \u2018You can\u2019t do that to us. Go ahead and do it, and we\u2019ll engage in economic reprisals of our own.\u2019\u201d<\/p>\n The House of Representatives voted 352-65<\/a> on Wednesday to pass a bill that would ban TikTok unless the app\u2019s Chinese parent company, ByteDance, sells it. The bill isn\u2019t expected to pass the Senate, but it\u2019s reignited debate over the risks of a Chinese company potentially having access to over 170 million American users\u2019 data\u2014as well as control over what they\u2019re seeing on an app where close to a third of adults age 13-29 get their news, according to Pew Research Center data<\/a>.<\/p>\n \u201cI had President Trump sign an order that TikTok had to be sold, and I continue to believe that. So I think the legislation should pass\u2026It\u2019s a great business, and I\u2019m going to put together a group to buy TikTok,\u201d said Mnuchin on CNBC on Thursday<\/a>. \u201cIt should be owned by U.S. businesses. There\u2019s no way that the Chinese would ever let a U.S. company own something like this in China.\u201d<\/p>\n Buying TikTok would be a huge get for Mnuchin. The app reported $16 billion in annual sales on Friday<\/a>, and an Oxford Economics report<\/a> found that it contributed $24.2 billion to US GDP last year (TikTok contributed funding for the study). Bloomberg Intelligence recently valued TikTok\u2019s U.S. business<\/a> at an estimated $40-50 billion.<\/p>\n The last major social media buyout was Elon Musk\u2019s Twitter takeover in 2022. Musk has taken a central role in Twitter (now X.com)\u2019s operations ever since, dictating content moderation policies and experimenting with payment models. NYU Business professor and former Obama Assistant Secretary of State Michael H. Posner told Fortune<\/em> that he wasn\u2019t concerned about Mnuchin potentially exerting Musk-like control over TikTok.<\/p>\n \u201cIt\u2019s a very different thing than Elon Musk owning X, or even Mark Zuckerberg effectively having operational control of Meta. So, you know, I would be less concerned,\u201d Posner said. \u201cElon Musk\u00a0 at X has inserted himself in a way that I think is very detrimental to the company and not good for our society\u2026I think Mnuchin probably wouldn\u2019t have that kind of control.\u201d<\/p>\n Posner pointed out that if legislators are concerned about Chinese influence over TikTok, forcing a sale is only one half of the equation: it would also be necessary to remove that all of the app\u2019s data centers and engineering staff from any Chinese oversight, a process that could take a long time.<\/p>\n \u201cMnuchin and his group, if they had the money, and they were able to buy [TikTok], and separate not only ownership but the technology\u2014making sure that the algorithms, all the engineering was also taken out of China\u2014that would obviously, to me at least, be a very positive development,\u201d Posner said.<\/p>\n<\/div>\nWhat has Mnuchin been up to during the Biden administration?<\/h2>\n
Another feather in the cap<\/h2>\n
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