Threaten strengthening how the department fights terror. I strongly believe and understand that there are very, very important tools within the Treasury Department that can come pat terrorism and that many of these tools such as sanctions are extremely effective and keep our Armed Service out of harm. So i am fully committed to the maximum amount of law to both enforce the existing sanctions in a very strict way and i will work with the president elect as he sees fit on additional sanctions and there are also other programs within treasury that i believe are very, very effective in fighting terrorism. Its a very important part of the treasury. And i know that that has been done very effectively. We all agree its important. What were trying to do is assess your qualifications. You havent been willing to talk medicare, havent been willing to talk specifics on terror. Lets talk about qualifications on the committee on Foreign Investment because this is Something Else you would have responsibilities on to protect our country on when a foreign investor makes an investment in the United States in a way which has National Security implications. If a foreign investor with ties in a Foreign Government invests in President Trumps business should the committee examine this transaction . Senator, first let me say i think that would be appropriate. Let me go back to your other question because i apologize if i didnt answer the specifics on your terrorism i was searching for any specifics in toward be able to assess your qualifications. Well, senator, again, i believe there are some important sanction as it relates to sanction against iran and other countries. I would absolutely enforce those and encourage the president to use additional sanctions when appropriate. I also understand that there are certain classified programs that i will be part of as the nsa and also use that and work with the National Security group to the maximum amount available bylaw. So we didnt hear what you would do to fight isis, we didnt get any specifics on medicare. Lets had hear about this most current question with respect to the committee on Foreign Investment. What would you do if youre dealing with President Trumps business. Ill deal with President Trumps business no different than ideal with any business that comes before the committee. I would take my role as chair of that committee very significantly. I think its a very important issue. I think in perhaps previous secretaries have not enforced some of these things. Innocently as much as perhaps they should have in protecting the American Workers and American People and american technology. I think this is one of the most important jobs that i would have as secretary mr. Mnuchin the president is not like everybody else. Hes the commanderinchief and any Foreign Government involvement in his business could compromise National Security. Ill reflect on that answer as well. Can i pursue one other additional question mr. Chairman. Mr. Mnuchin you ran a hedge fund for a few years starting in 2004 and ive been trying to get my arms around the mnuchin web of Bank Accounts and Shell Companies that were in the Cayman Islands. How many employees did you have in anguila. We didnt have any employees. How many customers did you have . We didnt have any customers that resided in agguila. Did you have an office there we did not have an office ourselves there. So you just had a post office box . Senator, let me explain to you just yes or no answer. Im already over my time. Hopefully the other senators will defer you some time so i can answer this for you. Mr. Chairman wait. Should go ahead and answer. He should have a chance to answer the question. Its a legitimate question. You go ahead and answer it. Okay. I like, all other hedge funds and many, many private equity funds set up offshore entities that are primarily intended to accommodate nonprofits and pensions that want to invest through these offshore entities. As it reflects my own tax situation these entities were either 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 and as treasury secretary if im 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, diligen things and i paid all my taxes as required. Well come back to this question of offshore deals that are commonly called the blockers. Again, im very troubled about this question of how youre going to unrig the system if youve got at that record of taking advantage of tax shelters that in effect have zero percent tax rate. Thank you, mr. Chairman. Mr. Mnuchin, as you can see youre going to get questions like this, and what was legal at the time still being criticized. But im sure you heard about allegations you profited from predatory lending during the housing crisis. An Investor Group you headed formed by reformed indymac failed institution responsible for many low and no doc Mortgage Loans to a viable institution called one west which you described which offered Loan Modifications often above and beyond what other institutions were doing to more than 100,000 borrowers. At least thats what it looks to me. During all the foreclosure turmoil, the Obama Administration official set up a National LoanModification Program called hhm prcphhmp. Many members of congress on the other side and aisle fell short of its goals and had significant design flaws. In testimony before congress in 2011, special Inspector General identified that quote there have been countless publ lesless pubs of participants having worse off for engaging in a futile effort to obtain sustainable relief that the program promised. Failed modifications left borrowers with more owing on their loans. Worse credit scores. Using provocative language weve heard supporting your axes during the foreclosure crisis i guess you could say then secretary treasury secretary geithner was at that predatory loan modifier. Using that type of logic. Now, mr. Mnuchin did one west have any interplay with obama mr. Stations program and was that Program Successful in preventing foreclosures on struggling american homeowners or could more have been done by the administration . Senator, thank you very much for that question. That is a very important issue. When we did the indymac deal with the fdic we committed to the fdic we would continue the Loan Modification Program. It was after that that the Obama Administration came up with hhmp. We had no obligation to do that. We could have continued to do fdic Loan Modifications but we felt it was the appropriate thing to do voluntarily go into u. S. Treasury hhmp program. So we voluntarily went into that program. That Loan Modification Program was a Prescriptive Program to see which was better either foreclosuring on a home or providing a loan modification. To the extent the net present value was higher on foreclosuring we, unfortunately, had to follow the hhmp rules or severe lly penalized if we didn proceed with foreclosures. Those were not your rules. These were rules driven by the administration. Which administration . The Obama Administration. Let me ask one more question. The tax law has become much too complicated. Stories of people getting their Tax Liability incorrectly calculated is commonplace. Creating a tax gap between a difference of whats owed versus whats paid. Its clear that theres a major problem and something needs done address the problem. To your credit, mr. Mnuchin you talked about your desire to simplify the tax code. Thank you. Im glad youre talking about that. My question to you is how to address this problem. Do you have any suggestions for how to make the Internal Revenue code less complex or at least keep it from getting more complicated and would you realm moratorium on tax regulations and should the tax laws raise revenue for the government and stop trying to achieve so many other social goals or societal goals . Yes, senator i agree with you completely. One of the things its bean great honor to travel with the president elect and ive been one of the chief architects of his economic plans. We believe the most critical issue is creating economic growth, and passing tax reform is major component of that. And our tax reform plan we believe the tax simplification and fewer deductions are absolutely critical. You mentioned about the tax gap and thats something ive been reading about and studying. I was particularly surprised that at looking at the irs numbers the irs head count has gone down dramatically, almost 30 over the last number of years. I dont think theres any other Government Agency thats gone down 30 especially for an agency that collects revenue this is something im concerned about. Now, perhaps the irs just started with way too many people, but i am concerned about the staffing of the irs. Thats an important part of fixing the tax gap and im also very 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 Security around that and also Customer Service for the many hardworking americans hat are paying taxes. Senator grassley, youre next. Like i told you when we met in our office, i dont have any gotcha questions so i would let you know. Let me go along the line of the first statement i want to make. I dont expect to you answer unless you have some misunderstanding of our position discussed in my office. Pro growth tax reform will be a top priority for you. I agree and look forward to working with you and president elect trump on that point. As part of any tax reform proposal it will be important that adequate transition rules are included to provide a smooth transition for businesses that may be unpredictably negatively impacted. As we discussed in our meeting, congress has already effectively put in place transition rules for some alternate energy cluing wind, the production tax credit is currently scheduled to phase out over the next few years ending in 2020. Based upon our conversation i believe that we are in agreement that you would support the current phase out as part of any tax reform proposal. Question two. Ive been a strong proponent of the irs private Debt Collection as 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 to collect inactive tax debt owed. 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. Out of that 187 million the Treasury Department has provide debt collectors to collect a net of 8 million. This certainly is not due to the lack of inactive tax debt available for the irs to assign. According to the Government AccountabilityOffice Report the irs has over 130 billion of outstanding debt on its books. So hamstringing this program by refusing to release inactive debt for the programming ought to be considered unacceptable by anybody. So 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 thats not being collected . Yes, senator. First of all, thank you for having spend time with me. I appreciate the opportunity to speak fwou a lot of important issues. On these issues i absolutely agree with you that we do need to have phase out rules when we change thing and i support the phase out of that as you suggested and then on the irs, i think that most aspects of taxes should be handled. As youve described to the extent we have 100 plus billion of receivables that are just sitting there and that we can collect tens of millions or hundreds of millions of dollars for the American Public, particularly an environment where were looking for money for so many programs, this to me i agree with you seems like a very obvious thing to do. This will have to be my last question. In 2006 i was successful in enacting legislation to enhance the irs Whistle Blower Program. The program has been one of the most effective programs in addressing tax evasion. Leading to the recovery of more than three and four tenths in billion dollars in taxes that would have been lost to fraud. Theres resistance in the irs to the Whistle Blower Program and ongoing concern has been poor communication with whistle blowers who often wait in the dark years with no feedback from the bureaucracy. Another concern is that the irs has chosen to interpret the whistle blower law narrowly to the detriment of whistle blowers in several instance. For example, the irs has interpreted the terms collected proceeds, which is the base for determining the amount of an award to exclude criminal penalties and certain other proposeds such aspen analyticals assessed for undisclosed foreign Bank Accounts. Two questions and ill state them both. Should you be yirmconfirmed can count on you to be supportist of the whistle blower and would you be willing to review the irs Administration Program including its very narrow interpretation of the words collected proceeds . Absolutely, senator. You have my you a suassurance. 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 tibl whistle blower laws are a very important part of that. So i will work very hard with you on that. Thank you, senator. Thank you very much. Senator stabenow. Thank you very much mr. Chairman and welcome. And congratulations on your nomination and welcome to your beautiful family as well. I do want to follow up on information that we just received last night that were additions to your recent financial disclosures. I havent had a lot of time to take a look at that. We just received it last night. But you failed to include your position as director of Cayman Islands corporation as well as manager chairman or director of seven additional shell corporations and holding companies, nearly 100 million in real estate. As well as a number of other things including 906,556 worth of artwork held by children. As treasury secretary and as we go into tax reform, would you support closing tax loopholes in the u. S. Tax code that extremely wealthy people use such as yourself have used to avoid paying tax. We heard about the Cayman Islands for years and the buildings that have had thousands of companies that have used it as addresses, and would you be willing to close those loopholes . First of all let me comment i very much appreciated the opportunity to meet with you and i traveled to your state many times and have great admiration for your state. The president elect had a very significant economic speech in detroit and weve been very focused on time in your state. So i appreciate everything that youve done there. Let me just comment on i realized last night you got a memo on some changes to my Senate Questionnaire so thank you for giving me the opportunity to comment on that. I think as you all can appreciate, filling out these government forms is quite complicated. There were many things i expected in this job including having to sell everything. But the amount of paper work in filling out the forms even for me having experience in business was quite a job. In an effort to get the Committee Information early, we submited a preliminary questionnaire prior to us having the 278 form finished and prior to signing the agreement with the ethics office. Let me first say any oversight, it was unintentional. You did mention that there was 100 million of real estate. I was advised by my lawyer that we didnt need to disclose that on the questionnaire because it didnt need to be disclosed on the 278. There was some confusion about the complexity. We worked tirelessly with the kmeelt sta need staff and i want to thank the staff they worked very long hours. They were extremely thorough. I appreciate their work. We delivered over 5,000 pages. I can assure you they actually read all those 5,000 pages because when i had an opportunity meet with the staff with my lawyers and accountants we answered some very specific, some very speci