Mnuchin's New Hollywood Partner Made Billions in Russian Oil

(Bloomberg) -- Treasury Secretary Steven Mnuchin just got a new Hollywood business partner: a man who made billions investing in Russia.

A company run by Len Blavatnik announced a deal Tuesday to buy a stake in a film-finance firm that, in turn, is engaged in a joint venture with Mnuchin, backing blockbusters including “The Lego Batman Movie.” The Treasury secretary has pledged to sell his own interest in the business by June.

Born in Ukraine and raised in Russia, Blavatnik moved to the U.S. in 1978 and later became a U.S. citizen, according to the website of his company, Access Industries Holdings Inc. He made a fortune following the breakup of the Soviet Union, investing in Russian oil and aluminum. The Bloomberg Billionaires Index estimates the 59-year-old’s net worth at $18.7 billion, including assets around the world in chemicals, real estate, technology and entertainment.

Through Access Entertainment, Blavatnik bought an interest in RatPac Entertainment from James Packer, an Australian businessman who founded the film company with movie producer Brett Ratner. RatPac, in turn, is part of a joint venture with Mnuchin known as RatPac-Dune, which struck an agreement with Warner Bros. in 2013 to provide $450 million in funding for as many as 75 movies, including “Suicide Squad” and “Kong: Skull Island.” The transaction disclosed Tuesday doesn’t include Mnuchin’s stake.

A spokesman for Access Entertainment declined to comment, as did a spokesman for Treasury. Blavatnik didn’t disclose the price he paid.

Potential Conflicts

The link with Blavatnik shows the complexity of managing potential conflicts for top Trump administration officials, many of whom, including President Donald Trump, were wealthy businessmen who took office with far-reaching financial interests. Bloomberg estimated in January that Mnuchin, a former Goldman Sachs Group Inc. partner who later became a Hollywood financier and turned around a troubled bank, was worth more than $600 million.

In January, Mnuchin provided federal ethics officials with a five-page plan to divest dozens of assets, including the stake in RatPac-Dune. He said he would complete the sale within 120 days of his confirmation, and that he wouldn’t make decisions as Treasury secretary that would affect its value during that time.

The RatPac-Dune stake played a role in an ethics kerfuffle last month. Asked for a movie recommendation during a live television interview with Axios’s Mike Allen, Mnuchin replied: “I’m not allowed to promote anything that I’m involved in. So I just want to have the legal disclosure. You’ve asked me the question, and I am not promoting any product. But you should send all your kids to ‘Lego Batman.’” The remark drew laughs from the audience.

Ron Wyden, the ranking Democrat on the Senate Finance Committee, requested an investigation by the Office of Government Ethics into Mnuchin’s remarks. “Lego Batman” is part of of the RatPac-Dune portfolio, meaning that Mnuchin may stand to benefit from the movie’s profits. Mnuchin later apologized to the OGE and promised to exercise greater caution in the future.

Blavatnik was a significant donor in the last presidential election, pouring millions of dollars into political action committees supporting several Trump rivals for the Republican nomination. His name later appeared on the guest list for a suite of “highest level” party donors at the GOP convention in Cleveland. Mnuchin, who was Trump’s fundraising chief, hosted a gathering in the suite next door.

In December, Blavatnik’s Access Industries gave $1 million to Trump’s inauguration committee, according to a Federal Election Commission filing made public Tuesday.

To contact the reporter on this story: Zachary R. Mider in New York at zmider1@bloomberg.net.

To contact the editors responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net, Robert Friedman, Steve Dickson