Nerve Center
Malpass's division is the nerve center within Treasury on tradepolicy and oversees the Committee for Foreign Investment in theU.S., Trump's key tool for limiting Chinese investments intoAmerican technology. The attrition complicates Treasury's effortsto carry out Trump's economic agenda as the U.S. levies new tariffsagainst China and allies in Europe, and the president threatens totear up a longstanding NAFTA agreement with neighbors Canada andMexico.The Trump administration's hiring freeze at federal agencieshas compounded the impact of the departures, contributing to ashrinking headcount in the division, according to two peoplefamiliar with the matter.But even with full staffing, some peoplesay that Malpass, who was confirmed by the Senate, is mismanagingthe unit. They note that Treasury Secretary Steven Mnuchin hasdressed down Malpass for striking too hard a tone in publicstatements about China—an episode that harmed morale throughout theunit.Malpass, 62, worked in the Treasury and State Departmentsduring the administrations of Ronald Reagan and George H.W. Bushand later became chief economist at the now-defunct Bear Stearns.Malpass was a senior economic adviser on Trump's presidentialcampaign. At Treasury, he succeeded Nathan Sheets, who held thepost under Obama.In one incident, Malpass erroneously said on theeve of the March G-20 finance summit in Buenos Aires that the U.S.had ended formal economic talks with Beijing. Mnuchin privatelyreprimanded Malpass after the incident, according to three peoplefamiliar with the matter. Malpass had to correct the record, sayinghe “misspoke.”Some paint a different picture of Malpass'leadership, with a current Treasury official saying he is open tonew ideas and input from civil servants.Among the staff to departwas Mark Sobel, a 40-year veteran at Treasury, who sped up hisplans to retire from his post as deputy assistant secretary forinternational monetary and financial policy, deciding to resign inApril, according to three people familiar with his thinking. Sobel,64, had risen to be part of a group of influential career officialswho worked in administrations of both parties. Sobel declined tocomment.Sobel is seen as having the most institutional and culturalknowledge of international affairs at Treasury. He was known in thebuilding and among foreign counterparts over the past four decadesas a tireless and at times uncompromising negotiator who has been akey U.S. representative behind the scenes at dozens of G-20 and G-7finance officials meetings.Weeks after retiring, Sobel wrote acolumn called “America's currency confusion” for a London-basedthink tank, chastising Mnuchin and the rest of Trump's economicteam for eroding U.S. credibility by having too many officialstalking about the dollar policy.Sobel moved forward his departurein part because of Malpass's move to install his chief of staff,Mauricio Claver-Carone, at the IMF as executive director whileTrump's nominee awaits Senate confirmation. Sobel, according to thethree people, didn't want to work for Claver-Carone, an attorneywho previously led a group that promoted embargoes againstCuba.
Next Generation
Several younger staffers—seen as the next generation ofnon-political brain power—have also left, according to the people,who spoke on condition of anonymity.Other departures orearlier-than-planned retirements include Robert Dohner, an Asiaspecialist who led the push for China to allow the yuan tostrengthen; Aimen Mir, deputy assistant secretary for investmentsecurity overseeing work on the CFIUS; John Weeks, head of theglobal economics office; and Ben Cushman, a Mandarin speaker.All ofthose officials either declined to comment or did not respond toinquiries.“For those who had spent their careers advocating thevirtues of openness and integration and collaboration, thetrajectory of policy under this administration probably made itmore challenging for them,” said Sheets, Malpass's predecessor inthe Obama administrationWhile Malpass' leadership style has gratedon many Treasury officials, Mnuchin is seen as respectful of theirexpertise and a good listener, according to the six people. Mnuchinhas repeatedly complimented Treasury career staff, an uncommondisplay of trust in an administration where the president hastweeted about his skepticism of the “deep state” of non-partisancivil servants.The department is expected to hire at least a dozenpeople for CFIUS, which is housed in Treasury's internationalaffairs unit. CFIUS reviews foreign investments for nationalsecurity risks and is expected to be revamped soon with abipartisan bill in Congress.
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