Sandberg, Brainard on Clinton Treasury List as Trump Eyes Icahn

(Bloomberg) -- Democrat Hillary Clinton would likely try to make history with her choice for U.S. Treasury secretary while Republican Donald Trump would probably select someone whose biography resembles his own.

Clinton’s possible choices for Treasury include Facebook Inc.’s Sheryl Sandberg and Federal Reserve Governor Lael Brainard, people familiar with the selection process said. Another candidate is TIAA-CREF President and CEO Roger Ferguson, who would be the first African American in the job.

Potential Trump nominees include his campaign’s finance chairman, hedge fund founder Steven Mnuchin, and investors Carl Icahn and Wilbur Ross Jr., according to a person familiar with his thinking. Trump has publicly said that Icahn would be a good choice for the position.

The people the two candidates are considering as the public face for their economic policies reflect the spirit of their campaigns. Clinton would be the first female president and has declared that at least half her Cabinet will comprise women. Trump has boasted of his business acumen and has mused about awarding Cabinet jobs to fellow billionaires.

The choice is expected within weeks after the Nov. 8 election, which Clinton remains favored to win, according to polling averages.

In Clinton’s case, the nomination will also provide a first glimpse of how her administration navigates tensions between the Democratic party’s resurgent liberal wing, led by Massachusetts Senator Elizabeth Warren, and more business-friendly economic moderates. Other names under consideration by Clinton’s aides include Deputy Treasury Secretary Sarah Bloom Raskin, someone thought palatable to Warren, who campaigned for Clinton but has also threatened to obstruct appointments she considers too tight with Wall Street.

“Everyone is acutely aware that the dumbest thing anybody can do is get into a big fight that divides the Democrats,” said Dennis Kelleher, head of Better Markets, an advocacy group founded in the wake of the financial crisis. “There’s a lot of motivation to making sure that the nomination process goes smoothly. First and foremost is Treasury secretary.”

Recruiting Challenge

Filling the role of Treasury secretary is a recruiting challenge for even the savviest transition team. The job usually demands a versatility unlike other Cabinet posts: someone who can speak plainly to Main Street, with gravitas to financial markets, with diplomacy to foreign finance ministers and with restraint to members of Congress.

All of the people who discussed or confirmed the candidates’ possible Treasury picks asked not to be identified because no decisions have been made and the election isn’t over. Fox Business Network reported Thursday that Mnuchin is Trump’s top choice for the job; the Trump and Clinton campaigns did not respond to requests for comment for this story.

Sandberg and Brainard both may have problems passing Warren’s muster because of their ties to moderate Democrats such as Lawrence Summers and Timothy Geithner.

Through a spokeswoman, Sandberg pointed to a statement last month that she wants to stay at Facebook. Brainard said through a Fed spokeswoman that she is not in conversation with either campaign.

A TIAA spokesman declined to comment on Ferguson, and a Treasury spokesman said Raskin would not comment. Mnuchin, Icahn and Ross did not respond to requests for comment.

Diverse Cabinet

The Clinton camp wants to use the Treasury position to establish a pattern of diversity in her Cabinet. Her advisers also want to reach beyond the familiar Washington establishment as liberals including Warren show hostility to the titans of finance and industry who have usually filled the job.

Trump has almost no ties to Washington’s lobbying industry or the financial services sector. His top staff are largely political newcomers, and he has relied on advice from the conservative Heritage Foundation. His most prominent backer in the financial services industry, former Minnesota Governor Tim Pawlenty, withdrew his support after the release of an Access Hollywood video in which Trump made lewd remarks about women.

Mnuchin, 53, the founder of Dune Capital Management, joined Trump’s campaign only in April, after stopping by a victory party at Trump Tower in Manhattan after the New York primary. Icahn, 80, and Ross, who was born in 1937, have acted as occasional surrogates for Trump on economic matters; Icahn penned a blog post in August that called Trump "right on about our economy."

Whether Warren’s wing of the Democratic party or Republicans approve of the Treasury nominee, who is subject to Senate confirmation, will depend on who the new president appoints for other key roles such as head of the Securities and Exchange Commission and White House chief of staff. Hacked e-mails released by WikiLeaks show Clinton’s campaign advisers have been acutely aware of Warren’s sway since the start of the race.

Warren’s office declined to comment.

One person close to the Clinton campaign who confirmed the people under consideration cautioned that Clinton herself has not yet weighed in on the choice. The outcome of Senate elections likely will influence her decision, as her leeway to make a more liberal nomination would be reduced if Republicans retain control of the chamber.

Other Candidates

Clinton’s shortlist may also include Gary Gensler, chief financial officer of the Clinton campaign and former chairman of the Commodity Futures Trading Commission, and Sheila Bair, a former chairman of the Federal Deposit Insurance Corp. and now president of Washington College. Bair said she isn’t interested in the job.

If Clinton is “seen as appointing someone who represents a narrow financial interest to a central position like Treasury secretary, there will be a perception that the deck is stacked,” said Marcus Stanley from the Americans for Financial Reform, a non-partisan group in Washington.

Brainard would likely be an unpopular pick among progressive Democrats. While working at the department under former President Bill Clinton, Brainard, 54, helped implement the North American Free Trade Agreement, now seen as a mistake by many liberals including Warren and Senator Bernie Sanders. Later, as Treasury undersecretary for international affairs under Obama, she worked on trade deals viewed as precursors for Obama’s Trans-Pacific Partnership, a 12-nation agreement with Pacific Rim countries that Congress has so far declined to ratify.

But Brainard has already passed the Senate confirmation process, most recently for her role at the Fed, which she took in June 2014. Republicans, though, have suggested that her campaign donations to Clinton and media speculation that she may be chosen to lead Treasury may represent a conflict of interest in her current position.

Sandberg, 47, is known to roll her eyes at speculation linking her to the Treasury job, but the Facebook chief operating officer is nonetheless viewed as a Clinton favorite. She offers a mix of Silicon Valley business acumen and Treasury experience, having served as chief of staff when Summers was secretary. That’s her Achilles heel, too: Liberals regard her as part of the old guard.

Ferguson would be the first minority to lead the Treasury. The 65-year-old head of TIAA is a favorite on Wall Street and was Fed vice chairman from 1999 to 2006. He’s a member of Google owner Alphabet Inc.’s board. Ferguson was a close ally of former Fed Chairman Alan Greenspan and was once considered a possible Greenspan successor.

--With assistance from Sarah Frier Emily Chang Robert Schmidt Katherine Chiglinsky Beth Jinks Shahien Nasiripour Jennifer Epstein Zachary R. Mider Max Abelson Kevin Cirilli and Emma Orr To contact the reporters on this story: Saleha Mohsin in Washington at smohsin2@bloomberg.net, Mike Dorning in Washington at mdorning@bloomberg.net, Elizabeth Dexheimer in Washington at edexheimer@bloomberg.net. To contact the editors responsible for this story: Craig Gordon at cgordon39@bloomberg.net, Brendan Murray, Alex Wayne