Treasury Secretary Steven Mnuchin is trying to fill a leadership vacuum in his department by increasingly recruiting financial industry executives for senior positions that come with a perk: a title that doesn’t require Senate confirmation.
Mnuchin has so far hired four people as top aides with the title “counselor,” including Craig Phillips, an ex-BlackRock Inc. executive and Hillary Clinton fundraiser. The Senate won’t vote on any of them, even though Mnuchin’s own party is in charge.
The hiring tactic is driven to some degree by necessity. The Goldman Sachs Group Inc. banker Mnuchin wanted as his deputy, Jim Donovan, pulled out on Friday, shortly before his Senate confirmation hearing was to be scheduled. Donovan said his withdrawal stemmed from a family matter.
Between a personnel shortage at the Treasury and a political crisis at the White House, where a special prosecutor is investigating Russia’s meddling with U.S. elections, Mnuchin faces difficulty fulfilling President Donald Trump’s ambitious economic agenda. The Treasury chief’s goals include the biggest tax overhaul since the Reagan administration, the unwinding of financial regulations and revamping Fannie Mae and Freddie Mac — all with the objective of doubling the pace of U.S. growth.
Mnuchin was already leaning on Donovan to help manage the department, even though he had not officially left Goldman Sachs. One of Donovan’s tasks was to recruit people for other senior positions in the agency.
Both Republican and Democratic administrations have used counselor positions to bring on top aides without the Senate’s scrutiny. Former Treasury Secretary Jacob Lew, for example, gave the title to Antonio Weiss, a Lazard Ltd. banker who withdrew his nomination to be an undersecretary after Democratic lawmakers raised concerns about his Wall Street ties. Henry Paulson, who ran the department under President George W. Bush, hired senior advisers from Goldman Sachs, where he had been CEO, without seeking Senate confirmation.
But Paulson and Lew both faced a Senate that was controlled by the opposition party during much of their terms. Mnuchin is employing the same end-run despite Republicans controlling all branches of the government.