Elizabeth Warren and Alexandria Ocasio-Cortez target Treasury Secretary Steven Mnuchin over Sears bankruptcy – CNBC

Elizabeth Warren and Alexandria Ocasio-Cortez target Treasury Secretary Steven Mnuchin over Sears bankruptcy - CNBC

Warren, Ocasio-Cortez Unleash Fury Over Steve Mnuchins Role In Sears Downfall

Presidential candidate and Sen. Elizabeth Warren, D-Mass., and Rep. Alexandria Ocasio-Cortez, D-N.Y., are targeting Treasury Secretary Steven Mnuchin, raising questions about his time on Sears Holdings' board of directors and his relationship with the troubled company's former CEO, Eddie Lampert.

Mnuchin, who was Lampert's roommate at Yale University, was on the Sears board until December 2016, after President-elect Donald Trump picked him to join the incoming Cabinet.

We are deeply concerned by the financial engineering and potentially illegal activity,” they wrote to Mnuchin. “In addition, we are concerned that, as Treasury Secretary, you are in position to take actions that benefit Sears shareholders and owners at the expense of workers and taxpayers.  Before @StevenMnuchin1 became Treasury Secretary, he was on the board of @Sears, where he helped gut the company and fire thousands of employees. Now, @AOC and I have some tough questions for him. pic.twitter.com/hS25rPOsYa

Under Lampert, who led Sears from 2013 to 2018, Sears closed more than 3,500 stores, shed some of its most valuable assets, including Lands' End, and laid off thousands. Sears filed for bankruptcy last October. Lampert bought Sears through an affiliate of his hedge fund ESL Investments, saving it from total liquidation.

In a four-page letter sent Thursday morning, Warren and Ocasio-Cortez asked Mnuchin a series of questions about his advisory role in Lampert's decisions.

Share DAVE GOLDINER May 23rd 2019 11:34AM Rep. Alexandria Ocasio-Cortez and Sen. Elizabeth Warren want answers from Treasury Secretary Steve Mnuchin — and for once it has nothing to do with President Trumps taxes.

In a video on Twitter announcing the letter to Mnuchin, Ocasio-Cortez criticized the secretary as "a walking example of what happens when rich and powerful people put other rich and powerful people into power."

The two powerful female lawmakers demanded Thursday Mnuchin explain his role in alleged self-dealing and billion dollar asset-stripping at the struggling retail giant.

Workers "deserve a Treasury secretary who fights for them," Warren said in the video, "not someone who spent a decade raking in cash for himself at the expense of hundreds of thousands of Sears employees."

Niels Lesniewski covers the Senate for Roll Call. He joined what is now CQ Roll Call in September 2007, hired by Roll Call for the GalleryWatch legislative tracking service that was integrated into CQ in 2009. He is known for his expertise on the peculiarities of Senate procedure. Niels began covering the Senate for CQ.com in January 2010, taking the title of CQ SenateWatch editor in the summer of 2011. He has contributed to coverage of all the biggest policy stories on Capitol Hill in recent years, including the response to the 2008 financial collapse, the health care overhaul and several budget standoffs. A Connecticut native, Niels graduated from Hamilton College in New York with a dual degree in theatre and government. Before joining CQ Roll Call, he worked for theater productions in D.C. and New England. While in college, he interned for ABCs “This Week with George Stephanopoulos.” Outside of work, Niels is an avid sports fan. He started attending Nationals games back when the team was among the worst in the National League and still playing at RFK Stadium.

Ocasio-Cortez, Warren grill Mnuchin for role in Sears bankruptcy

The Treasury Department did not immediately respond to CNBC's request for comment on the letter from Warren and Ocasio-Cortez. ESL declined to comment.

“As a board member for the PBGC, did you participate in any discussions or decisions regarding Sears’ underfunded pension plans? Did any member of Sears’ senior leadership, including Lampert and other current or former members of the board of directors, communicate with you, or attempt to communicate with you, about the PBGC decision?” they ask. “If so, please provide copies of that communication.”

Warren, Ocasio-Cortez press Mnuchin on role in Sears bankruptcy | TheHill

The letter from Warren and Ocasio-Cortez, consumer advocates who are among the most liberal lawmakers in Congress, comes about a month after Sears filed a lawsuit against Lampert, Mnuchin and other past board members, alleging they stole billions from the former titan of the U.S. retail industry.

“We are deeply concerned by the financial engineering and potentially illegal activity that took place at Sears Holding Corporation while you served on the company’s board. In addition, we are concerned that, as Treasury Secretary, you are in position to take actions that benefit Sears’ shareholders and owners at the expense of workers and taxpayers,” the lawmakers wrote in a letter released Thursday.

Lampert, the suit alleges, "caused more than $2 billion of assets to be transferred to himself and Sears' other shareholders and beyond the reach of Sears' creditors."

While Mnuchin is supposed to be recused from Pension Benefit Guaranty Corporation decisions regarding what may happen to legacy pension obligations of the bankrupt retail giant, Warren and Ocasio-Cortez  nonetheless have some questions about Mnuchin’s dealings there, too.

The suit was brought by Sears' unsecured creditors on behalf of Sears, alleging that, "In an effort to create a false record to cover up their asset stripping, at Lampert's personal direction, Sears employees repeatedly produced financial plans reflecting fanciful, bad-faith predictions that the company would experience an immediate and dramatic turn-around from deep and mounting losses to sudden profitability."

Warren and Ocasio-Cortez also asked whether Mnuchin had sought to waive an ethics agreement in which he promised to "not participate personally and substantially in any particular matter involving specific parties" where Sears was involved. That January 2017 agreement, which applied for one year, has expired.

Warren's and Ocasio-Cortez's letter notes that Mnuchin is one of three members on the board of the federal oversight organization Pension Benefit Guaranty Corporation, or PBGC, the group that guarantees Sears' pensions.

The two progressive lawmakers then sought to explain the evolution of the company that came to be known as Sears holdings, with Warren recalling her family’s connection to the old catalog business and Sears, Roebuck and Co.

Mnuchin said in his confirmation hearing that he would recuse himself from PBGC's actions related to Sears, but Warren and Ocasio-Cortez wrote that "the current status of your recusal requirements — and the exact types of decision you are recused from — are unclear."

“When my daddy had a heart attack when I was a girl, my mama got a full-time job, answering phones at Sears,” Warren said. “No, today it’s a very different Sears.”

Warren, one of nearly two dozen Democrats running for president in 2020, and Ocasio-Cortez, the most visible freshman in the House, have both been vocal critics of corporations and income inequality. Warren had been a driving force behind the creation of the Consumer Financial Protection Bureau and had advised the Treasury secretary through that agency during President Barack Obama's administration.

As a presidential candidate, Warren has proposed breaking up the giants of the tech industry, such as Amazon, Facebook and Google, and has proposed new taxes on so-called "ultra-millionaires" who are worth more than $50 million.

Ocasio-Cortez, a democratic socialist who is the youngest woman ever to serve in Congress, has made staunchly progressive pitches to address economic and environmental issues, making her a champion of the Democratic Party's left flank and a popular target of Republicans.

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