Steven mnuchin let me first say that i strongly believe and understand that there are very important tools within the Treasury Department that can combat terrorism. Of these tools, such as sanctions, are extremely effective and keep our Armed Services out of harm. So i am fully committed to the maximum amount of law to both in force the existing sanctions in a very strict way. And i will work with the president elect as cc fit on additional sanctions and there are also other programs within the treasury that i believe are very effective in fighting terrorism. It is a very important part of the treasury. And i know that it has been done very effectively. We all agree it is important. What we are trying to do is assess your qualifications. And you are not willing to talk a medicare. You are not going to talk about specifics on terror. Let me take one more crack on qualifications. This is something else. Or you wouldsector have responsibilities on when a foreign investor makes an investment in the United States in a way that has National Security applications. If a foreign investor with ties to a Foreign Government invests in president trumps, should the committee on Foreign Investment automatically and with close scrutiny examine the transaction . Let me say yes, i think that would be appropriate. Let me go back to the other question because i apologize if i didnt answer the specifics on your terrorism. Are searching for any specifics in order to be able to assess your qualifications. Senator, ihin well, believe there are important sanctions as it relates to the sanctions in iran and other countries. I would absolutely enforce those and i would encourage the president to use additional sanctions when appropriate. I also understand that there are certain classified programs that i will be part of with the nsa and will also use that and work with the National Security group to the maximum amount that is available by law. We didnt hear what he would do to fight isis. We didnt get specifics on medicare. The currentbout question with respect to the committee on Foreign Investment. You wered you do if dealing with president trumps business . Steven mnuchin i would deal with president trumps business no different than i would deal with any business that comes before the committee. And i would take my role as chair of that committee very seriously and significantly. I think it is an important issue. I think that perhaps previous secretaries have not enforced some of these things. Necessarily, as much as they should have in protecting the American Workers and people and technology. I think this is one of the most important jobs that i would have as secretary. The president is not like everybody else. He is the commanderinchief and Foreign Government involvement in a business could compromise National Security. So i will reflect on that answer as well. Can i pursue one other additional question. Go ahead. You ran a hedge fund in 2004 and ive been trying to get my bankaround the web of accounts and companies that were in the Cayman Islands. How many employees did you have . Steven mnuchin we didnt have any employees in anguilla. We didnt have any customers that resided in anguilla. Did you have an office there . Haven mnuchin we did not an office ourselves there. So you just had a post office . Hopefully other senators will defer times i can answer this for you because this is an important issue. I think he should have a chance to answer the question. That is a legitimate question you asked. Go ahead and answer it. Steven mnuchin icon alike all other hedge funds and many private equity funds set up offshore entities that are primarily intended to accommodate nonprofits with intentions that want to invest in the offshore entities. As it relates to my own tax situation, these entities were taxed as u. S. Corporations or u. S. Partnerships and in no way did i use them, whatsoever, to avoid any u. S. Taxes. They were merely as an accommodation to Pension Funds and nonprofit institutions. And a small number of foreign investors. As treasury secretary, if i am confirmed, i would look at these rules and make sure. I think you did a good job in stopping one of the abuses of offshore deferred fees. But i would diligently look at these things. And i can assure you, i paid all my taxes as was required. We will come back to this ,uestion of offshore deals lockers. Again, im troubled by this question of how you will on rig the system if you have a record of taking advantage of tax shelters that in effect have a 0 tax rate. Thank you. You can see,n, as you are going to get questions what was legal at the time is still being criticized. But im sure you have heard allegations of predatory lending during the housing crisis. And an Investor Group that you had reformed in america failed institutions responsible for many low and no doc Mortgage Loans including one west. Which was described here. Which offered modifications above and beyond what other institutions were doing to more than 100,000 borrowers. At least that is the way it looks to me. Meanwhile, during the foreclosure turmoil, the Obama Administration officials set up a National LoanModification Program called 8 00 a. M. P. That, many members of congress men on both sides of the aisle have repeatedly fell far short of the goals and have had significant design flaws. In testimony before congress in 2011, the special inspector identifiedl borofsky that there have been countless published reports of who end up worse off or who have engaged in the civil effort to obtain the sustainable relief that the program promised. Failed trial modifications often leave borrowers with more principal outstanding on their loans with deflated savings and a worse credit savings. Using provocative language that we have heard supporting your actions, i guess you could say that the treasury secretary was a predatory loan modifier. Using that type of logic. Now mr. Mnuchin. Did one west have any interference with the program and was that Program Successful in preventing foreclosures on struggling american homeowners or could more have been done by the administration . Thank you for that question. It is a very important issue. When we did see the deal, we to continue the Modification Program. Was after that that the Obama Administration came up with and we had no obligation. We felt it was the appropriate thing to go into the u. S. Treasury program as were the other major banks. So we voluntarily went into the program. The Loan Modification Program was a very prescriptive program, including us having to follow net present value calculations that were discovered by the treasury models to see which was atter, either foreclosing on home or providing a loan modification. And to the extent that the net present value was higher on foreclosing, we unfortunately had to follow the rules or we would have been severely penalized if we had not proceeded with foreclosures. These were not your rules . Mr. Mnuchin no, these were driven by the mnuchin these were driven by the Obama Administration. Let me ask one more question. There is an agreement that the tax has become more, located. When people get their Tax Liability incorrectly calculated are commonplace, reducing sentences, and creating an ever greater tax gap and the difference between what is owed it is clearpaid, that there is a major problem and something needs to be done. You have talked about your desire to simplify the tax code. Thank you. Im glad were talking about that because i very much agree with you. So my question to you is, how do you address this problem . Do you have any suggestions for how to make the revenue code less complex . Or keep it from getting more complicated . Would you recommend a moratorium on tax legislation or registration or should it be to raise revenue for the government and stop trying to achieve other social or societal goals . I agree withn you, completely. One of the things it has been a great honor to travel with the president elect. I have been the chief architecture of his economic plans. We believe the critical issue is creating Economic Growth and passing tax reform is a major component of that. The tax reform plan, we believe that taxable vocation and fewer deductions are critical. You mentioned about the tax gap and that is something i have been studying and it is something im quite interested in. Particularly surprised when looking at the irs numbers, that the irs headcount has gone down dramatically, almost 30 over the last number of years. I dont think there is any other Government Agency that has gone down already percent. And especially an agency that collects revenues, this is something im concerned about. Perhaps, the irs started with way too many people. Thei am concerned about staffing of the irs. It is an important part of fixing the tax gap. And im also concerned about the lack of first Rate Technology at the irs. The issue of making sure that we protect the american publics privacy when they give information to the irs, cyber alsoity around that, and customer service. For the hardworking americans who are paying taxes. You are next. Like i told you when we met in the office, i dont have any gotcha questions or would let you know. Let me go along the lines of the first statement i want to make. I dont expect you to answer unless you have some misunderstanding of our position discussed in our office. Progrowth tax reform will be a top priority for you. I agree and look forward to working with you and donald trump on that point. As part of any tax reform proposal, it will be important that adequate transition rules are included to provide transition smooth transitions for businesses that may be negatively impacted. Our meeting,ed in congress has already effectively put in place transition rules some alternative veteran including the production tax credit, it is schedule to phase out over the next few years, ending in 2020. Based on our conversation i believe we are in agreement that you would support the current phase out as part of any tax reform proposal. Question two, i have been a strong proponent of the irs private Debt Collection program, as has senator schumer. In 2015, Congress Updated and made mandatory the irs private Debt Collection program. This program is designed to chip away at the tax gap by requiring the irs to contract with private debt collectors. These are the tax debts not being worked by the irs. And absent this program would likely never be collected. Adding up to 187 million in 2017. That 187 million, the Treasury Department has provided debt collectors to provide a net of 8 billion. This is not due to the lack of inactive tax debt available for the irs to assume to assign. According to the Government Accountability office report, the irs has over 130 billion of outstanding debt on its books. So hamstringing this program by refusing to release an active debt for the program ought to be considered unacceptable by anybody. Can you give me assurances that the department of treasury, under your leadership, will work to implement the program to the full extent of authorized law and bring in this tax money that is not being collected . Steven mnuchin yes. Thank you for having spent time with me. I appreciate the opportunity to speak to you about a lot of important issues. On these issues, i absolutely agree with you that we do need to have phase out rulings will we change things and i support the phaseout of that as you suggested. And on the irs, i think that most aspects of taxes should be handled by the irs but as you described, to the extent that we have 100 plus billion dollars of receivables that are just sitting there and that we can collect tens of millions of dollars are hundreds of millions of dollars for the american public, particularly in an environment where we are looking for money for so many programs, i agree with you, it seems like a theory obvious thing to do. This will be my last question. In 2006 i was successful in enacting legislation or to the irs Whistleblower Program. The program has been one of the most effective programs in addressing tax evasion, leading to the recovery of more than three point 4 million 3. 4 billion that would be last to taxes. There is ongoing concern with poor communication with whistleblowers who wait in the dark years with no feedback from the bureaucracy. Another concern is that the irs has chosen to interpret the whistleblower law ordinarily to the depths of was the depth of whistleblowers in several instances. Her example, the irs has interpreted the terms collected proceeds, which is a base for determining the amount of an award to exclude criminal penalties and other proceeds such as penalties assessed for Undisclosed Foreign Bank accounts. Two questions and i will say them both. Should you be confirmed, can i count on you to be supportive of the Whistleblower Program and work to ensure its success . Would you be willing to review the irs Administration Program including its a very narrow interpretation of the words collected proceeds . Absolutely. In you have my assurance. And let me further go on to say that the majority of americans voluntarily file their tax returns honestly. But we are all aware that there is tax fraud. And there is tax evasion, as youve said. And we need to be diligent. And i believe he was a blower laws are very important, a very important part of that. I will work hard on that. Thank you. Thank you. Welcome. Congratulations on your nomination. Welcome to your beautiful family as well. I want to follow up on information we just received in addition to your recent Financial Disclosures i havent had a lot of time to take a look at that, we received it last night. You failed to include your position as the director of the Cayman Islands corporation as well as manager chairman or director of seven additional corporations and holding companies, nearly 100 million in real estate, as well as a number of other things, artwork held by your children. So a number of things. As treasury secretary, and as we go into tax reform, would you support closing tax loopholes in the u. S. Tax code that is extremely wealthy people use, such as yourself, to avoid paying taxes . Weve heard about the Cayman Islands for years and the buildings that have had thousands of companies that have used them as addresses. Would you be willing to close the loopholes . Steven mnuchin let me comment. I appreciated the opportunity to meet with you and ive traveled to your state many times and have great admiration for your state. The president elect had a very significant economic speech in veryit and we have been focused on time in your state so i appreciate everything that you have done there. I realized on last night you did get a memo on changes to my senate questionnaire. Thank you for giving me the opportunity to comment on that. I think, as you all can appreciate, filling up these government forms is quite, located. There were many things i expected in this job, including having to sell everything. Of the amount of paperwork and filling out the forms, even for me, having experience in business was quite a job. In effort to get the Committee Information early, we submitted a preliminary questionnaire prior to us having the 278 form finished and prior to signing to the agreement with the ethics office. So let me say, any oversight was unintentional. We were understanding that it completed ono be that. We worked tirelessly with the committee staff. They works really thorough and i appreciate their work and we delivered over 5000 pages. I can assure you they read all of the page is because when i had the opportunity to meet with the staff with my lawyers and accountants, we had very specific questions. I appreciate the additional information. My question goes to what you are actually disclosing. Particularly, the Cayman Islands. Did you use the Cayman Island corporations towards paying taxes . Would you support closing tax loopholes that wealthy people have consistently used in the Cayman Islands to avoid paying taxes . Steven mnuchin let me be clear. I did not use a Cayman Island and deceit in any way to avoid taxes for myself. I paid taxes on all of that income. There was no benefit to me. It was set up to benefit nonprofit funds that want to invest through offshore. So you helped others avoid paying taxes . Steven mnuchin again, they followed the law. I am committed to tax symbols occasion. I think it makes no sense that we would in courage Hedge Fund Managers to set up entities in the Cayman Islands or anywhere else, where i didnt have physical people. Set upre people who offshore businesses and cut their people offshore and you have heard of inversions and those types of things. They are perfectly legal and they hurt the American Workers. In the hedge fund world, these are set up to make accountants rich. And i would love to work with the irs to close these tax issues that make no sense and make sure that we are collecting the proper amount of taxes. See you support closing those loopholes . I support changing the tax laws