Scott Bessent, Trump’s billionaire treasury pick, will shed assets to avoid conflicts

WASHINGTON - Scott Bessent, the billionaire hedge fund manager whom President-elect Donald Trump picked to be his treasury secretary, plans to divest from dozens of funds, trusts and investments in preparation to become the nation's top economic policymaker.

Those plans were released Saturday along with the publication of an ethics agreement and financial disclosures that Bessent submitted before his Senate confirmation hearing Thursday.

The documents show the extent of the wealth of Bessent, whose assets and investments appear to be worth in excess of $700 million. Bessent was formerly the top investor for billionaire liberal philanthropist George Soros and has been a major Republican donor and adviser to Trump.

If confirmed as treasury secretary, Bessent, 62, will steer Trump's economic agenda of cutting taxes, rolling back regulations and imposing tariffs as he seeks to renegotiate trade deals. He will also play a central role in the Trump administration's expected embrace of cryptocurrencies such as bitcoin.

Although Trump won the election by appealing to working-class voters who have been dogged by high prices, he has turned to wealthy Wall Street investors such as Bessent and Howard Lutnick, a billionaire banker whom he tapped to be commerce secretary, to lead his economic team. Linda McMahon, another billionaire, has been picked as education secretary, and Elon Musk, the world's richest man, is leading an unofficial agency known as the Department of Government Efficiency.

In a letter to the Treasury Department's ethics office, Bessent outlined the steps he would take to "avoid any actual or apparent conflict of interest in the event that I am confirmed for the position of secretary of the Department of Treasury."

Bessent said he would shutter Key Square Capital Management, the investment firm that he founded, and resign from his Bessent-Freeman Family Foundation and from Rockefeller University, where he has been chair of the investment committee.

The financial disclosure form, which provides ranges for the value of his assets, reveals that Bessent owns as much as $25 million worth of farmland in North Dakota, which earns an income from soybean and corn production. He also owns a property in the Bahamas that is worth as much as $25 million. In November, Bessent put his historic pink mansion in Charleston, South Carolina, on the market for $22.5 million.

Bessent is selling several investments that could pose potential conflicts of interest including a bitcoin exchange-traded fund; an account that trades the yuan, also called the renminbi, China's currency; and his stake in All Seasons, a conservative publisher. He also has a margin loan, or line of credit, with Goldman Sachs of more than $50 million.

As an investor, Bessent has long wagered on the rising strength of the dollar and has betted against, or "shorted," the yuan, according to a person familiar with Bessent's strategy who spoke on condition of anonymity to discuss his portfolio. Bessent gained notoriety in the 1990s by betting against the British pound and earning his firm, Soros Fund Management, $1 billion. He also made a high-profile bet against the Japanese yen.

Bessent, who will be overseeing the U.S. Treasury market, holds over $100 million in Treasury bills.

Cabinet officials are required to divest certain holdings and investments to avoid the potential for conflicts of interest. Although this can be an onerous process, it has some potential tax benefits.

The tax code contains a provision that allows securities to be sold and the capital gains tax on such sales deferred if the full proceeds are used to buy Treasury securities and certain money-market funds. The tax continues to be deferred until the securities or money-market funds are sold.

Even while adhering to the ethics guidelines, questions about conflicts of interest can still emerge.

Trump's treasury secretary during his first term, Steven Mnuchin, divested from his Hollywood film production company after joining the administration. However, as he was negotiating a trade deal in 2018 with China - an important market for the U.S. film industry - ethics watchdogs raised questions about whether Mnuchin had conflicts because he had sold his interest in the company to his wife.

Bessent was chosen for the Treasury after an internal tussle among Trump's aides over the job. Lutnick, Trump's transition team co-chair and the CEO of Cantor Fitzgerald, made a late pitch to secure the treasury secretary role for himself before Trump picked him to be commerce secretary.

During that fight, which spilled into view, critics of Bessent circulated documents disparaging his performance as a hedge fund manager.

Bessent's most recent hedge fund, Key Square Capital, launched to much fanfare in 2016, garnering $4.5 billion in investor money, including $2 billion from Soros, but manages much less now. A fund he ran in the early 2000s had a similarly unremarkable performance.

This article originally appeared in The New York Times.