As Treasury secretary, Steve Mnuchin is overseeing a $500 billion corporate bailout package that Congress included in the CARES Act. It’s been called a “slush fund” by Democrats such as Sen. Bob Menendez of New Jersey. Experts such as the nonpartisan Brookings Institution have questioned whether there’s robust enough oversight of Mnuchin’s agency. “I’ll be the oversight,” President Donald Trump said back in March.

So we thought we’d take you back this week to a story we first aired in the fall, about what happened the last time Mnuchin and several of Trump’s other friends got involved in the aftermath of a financial crisis. Our reporter Aaron Glantz spent several years looking into this story for his book “Homewreckers: How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream.” 

Our story focuses on a 1,500-square-foot single-family house in western Los Angeles, the home of Dick and Patricia Hickerson and their oldest daughter, Sandy Jolley. Sandy had moved in with her ailing parents so she could look after them. Soon, though, Dick, a terminal cancer patient, went to the hospital for surgery and didn’t make it out of intensive care. 

While going through their parents’ affairs, Sandy and her sister discovered that their parents had signed something called a reverse mortgage on their home. It allowed them to take money out of the house, which would then revert to the bank’s ownership after they died. 

That bank, IndyMac, was one of the failing banks overloaded with toxic assets that the government took over and hurried to offload after the financial crisis. The government was so eager to get rid of the bank that it gave a pretty amazing deal to the one buyer it found. 

The buyer paid nothing for IndyMac, including its headquarters in Pasadena, 33 branches across Southern California, $6 billion worth of deposits and billions of dollars more in assets, among which was Dick and Patricia Hickerson’s reverse mortgage. In return for all this, the buyer agreed to take on IndyMac’s liabilities. 

But here’s the thing – the government also agreed to recoup the buyer for many of the losses it might incur on IndyMac’s bad loans, such as the cost of foreclosure. In exchange, the buyer agreed to work with the many people on the other end of those loans to help them stay on their feet during the economic collapse. 

After her parents died, Sandy Jolley was one of those people. And that buyer was Steve Mnuchin and his colleagues.

To hear the rest of the story, as well as an update from Aaron on what’s happening now, listen to this week’s episode.
 

Today, Reveal launches an illustrated series, created in collaboration with The Nib and illustrated by Thi Bui, about the shared and unequal experiences of the coronavirus pandemic. 

The first comic in the series, reported by Laura C. Morel, follows the story of Manuel Rodriguez Ruiz, an asylum seeker who’s been detained by U.S. Immigration and Customs Enforcement in Louisiana for nearly a year. As COVID-19 spreads, it poses tremendous risk to people in detention. “Every day, it gets closer to us,” Ruiz says.

What we’re reading

Starbucks demands landlords lower its rent for the next year, citing ‘staggering economic crisis’ of coronavirus

“With more U.S. locations than nearly any other chain, Starbucks’ rent relief ask could have widespread ripple effects on commercial property and mortgage markets if implemented.“ – Emily Schwing, reporter

University of Utah police officer showed off explicit photos of Lauren McCluskey to his co-worker

Days before a university student was killed by an ex-boyfriend who was blackmailing her, the police officer working her case saved the explicit photos of her to his personal phone, bragged about having them and “showed them off” to at least one co-worker. Logan police are now investigating Officer Miguel Deras in response to this article. Fantastic impact and investigative reporting from @CourtneyLTanner.  – Shoshana Walter (@shoeshine), reporter

N.J. failed to fix unemployment system for 19 years, records show. Now Murphy pleads patience.

As the economic devastation unleashed by the pandemic widens, long-forewarned catastrophes – such as the failure of aging, broken systems – are piling onto the damage. Sophie Nieto-Muñoz is one of many local reporters across the country looking at the impact of these failures on their communities. Among many things, this crisis has been a reminder that long-term planning and preparation can feel expendable until precisely the moment it’s most needed. – Matt Thompson (@RevealerInChief), editor in chief

Food that offers more than comfort

This essay by Reveal alumna Sinduja Rangarajan might make your mouth water, your eyes well up or both. 

Fact-based journalism is worth fighting for.