EXCLUSIVE: Now that he’s Secretary of the Treasury and fifth in line to succeed President Donald Trump, Steve Mnuchin is divesting himself of his entertainment holdings. However, he is still very much involved in Hollywood, and his influence looms large.
We’re told he will no longer be an executive producer on The Field, a low-budget thriller that’s in development about six random strangers who wake up in an endless cornfield and must solve a puzzle to get out. That project is from his fiancée, Louise Linton, a producer and B-list actress who is pushing that project through her Stormchaser Films, a company she formed in October 2012.
Stormchaser Partners LLC, a Delaware corporation that limits the liability of investors in movies produced by the banner, is one of the companies Mnuchin says he divested from upon his Sentate confirmation on February 13. Linton says on her website she founded Stormchaser Films after graduating from a local private law school, but she has never been licensed to practice law in the state – nor has Stormchaser Films, based in Los Angeles, ever registered with the California Secretary of State, as is required by law.
Another company from which Mnuchin had until today to divest his interest in is Dune Entertainment Partners LLC, a Delaware corporation that limits the liability of investors in movies produced by Dune Entertainment. On April 18, Dune Entertainment LP filed a certificate of cancellation with the California Secretary of States stating that:
a) “The above-named California limited partnership has completed winding up its affairs and is cancelled, or
b) “The Certificate of Registration to Transact Business in California of the above-named foreign limited partnership is cancelled.”
Dune Entertainment, the production company, is still a going concern, however, and Linton was recently named its CEO. Legal scholars and a D.C. official told Deadline, however, that they’ve never heard of a cabinet-level official turning his holdings over to a girlfriend, a move that could further complicate the legality of his divestiture if/when they marry, which would return the holdings to his control.
“I’m not aware of any cabinet-level official who sold his interests to his fiancée,” said Kathleen Clark, a law professor at Washington University and a leading expert on government and legal ethics who serves on the D.C. Bar Rules of Professional Conduct Review Committee. “If they marry, under ethics law, her interests are imputed to him, and he would have to recuse himself. Jared Kushner divested but sold to family members – a trust that doesn’t directly benefit him or his wife. Trump retains ownership of Trump Inc. He only delegated management to his sons. He didn’t divest one whit.”
Deadline called Linton at Dune Entertainment LLP, which has offices at Fox Plaza, but was told “You have the wrong number.”
“Isn’t she the CEO?” Deadline asked.
“We don’t have a number for her,” was the reply.
We confirmed with Linton’s rep that the address for Dune Entertainment where she is CEO is the same one at 2121 Fox Plaza in Century City, CA.
The actress revealed her new CEO position last week, announcing it on her Facebook page. She also noted in the post that she is “very excited about Dunkirk, which we co-financed with Warner Brothers,” and invited friends to “check out the trailer.” The film was co-financed by RatPac-Dune Entertainment – a partnership between Mnuchin and Brett Ratner that was formed in 2013 to produce a slate of 75 films with Warner Bros. Ratner, it turns out, is the former boss of Tina Sutakana, Linton’s partner at Stormchaser.
Linton appeared in a small role in Warren Beatty’s Rules Don’t Apply, which was partly funded by RatPac Entertainment and produced by Mnuchin, who also played a banker in it. The rumor around town is that Mnuchin and Linton met after being introduced by Ratner, but Linton — through her rep — said that while they met through mutual friends, it was not via Ratner.
Mnuchin did hook up socially with Ratner before partnering with RatPac. It was Ratner who introduced him to James Packer, who agreed to partner with Dune Entertainment (which also had a piece of James Cameron’s Avatar).
Dune’s co-financing arrangement with RatPac resulted in a bevy of films — some hits and some major losses. Those hits include The Lego Movie, Annabelle, American Sniper, Lights Out, and a consecutive string of flops such as The Man From U.N.C.L.E, Black Mass, Pan, In The Heart Of The Sea, and Live By Night. It also co-financed the upcoming Wonder Woman, Justice League and Stephen King’s It.
After the flops, word arose around town that Packer was looking to exit the company. True to that, Len Blavatnik, via Access Entertainment, recently acquired Packer’s stake.
In a January 10 letter to Rochelle Granat, the Treasury Department’s assistant general counsel and designated agency ethics official, Mnuchin explain how he intended to untangle himself from Linton’s business enterprises. “Prior to or upon confirmation,” he wrote, “I will fully disclose…all assets of my fiancée that would have been reportable under 5 U.S.C. § 102 if we were married. Until we are married, I will not participate personally and substantially in any particular matter involving specific parties that to my knowledge has a direct and predictable effect on my fiancée’s financial interests, or any member of my household, unless I am first authorized to participate pursuant to 5 C.F.R. § 2635.502(d). Upon marriage I will not participate personally and substantially in any particular matter that to my knowledge has a direct and predictable effect on my spouse’s financial interests, unless I first obtain a written waiver…or qualify for a regulatory exemption.”
Despite his questionable divestiture in Dune Entertainment which now has his fiancée at the helm, Mnuchin stands to gain millions of dollars if Congress enacts – and Trump signs – legislation reinstating the federal government’s only tax break for movie investors like himself. Sources tell Deadline that Mnuchin has already had private conversations with at least one industry pal who he had business with about that tax break – Section 181 of the Internal Revenue Code – which was enacted as part of the American Jobs Creation Act of 2004 and designed to stem the flow of runaway production to foreign companies.
The tax break, which expired January 1, substantially reduced the risk of investment by giving investors a 100% loss against taxable income in the year or years the money is spent. If the tax break is revived, it could substantially increase the fortunes of Mnuchin, his wife-to-be, and their many Hollywood business associates.