Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez are teaming up to ask important questions about Treasury Secretary Steve Mnuchin’s role in the collapse of retail empire Sears. More than 175,000 Sears employees lost their jobs while a handful of billionaires, including Steve Mnuchin, walked away with billions. And they want answers.
Mnuchin and his old pal sucked everything out of the company and left employees high and dry without even a penny of severance pay. This is happening across the nation as investment firms buy up, raid and tear down retail outlets.
Listen as Warren and AOC break down exactly what happened and ask serious questions about Steve Mnuchin’s role in it all. An estimated one in four jobs are in the retail industry in the United States and it is critical to ask these questions, not only for the individual employees, but for the health of the economy overall.
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
— Elizabeth Warren (@SenWarren) May 23, 2019
Warren sent Mnuchin a flurry of facts about his role and she has serious questions about his role:
In your current role as Treasury Secretary, you have had the opportunity to intervene of behalf of Sears and in favor of Lampert’s interest. After Sears declared bankruptcy but while Lampert still served as the Chairman of the Board of Sears, Sears Holding Corporation transferred responsibility of the company’s two pension plans, underfunded by about $1.4 billion, to the Pension Benefit Guarantee Corporation (PBGC.) PBGC took responsibility of the company’s two pension plans of more than 90,000 workers, as Sears Holding Corporation was no longer able to pay the benefits owed to the employees in these plans. As Secretary of the Treasury, you are, along with the Secretary of Commerce and the Secretary of Labor, one of three members of the board of directors that oversees the PBGC. You stated in your confirmation hearing that you would recuse yourself from any PBGC actions related to Sears, and your ethics agreement required you to do so for one year after your confirmation, but the current status of your recusal requirements remains—and the exact types of decisions you are recused from—remains unclear.
Warren goes on to note some of the actions taken by Lampert and others at Sears may have been illegal and she has questions.
We are deeply concerned by the financial engineering and potential 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 a position to take actions that benefit Sears’ shareholders and owners at the expense of workers and taxpayers. Therefore, we ask you to answer the following questions no later than June 13, 2019:
1. While you served on the board of directors for Sears Holding Corporation and ESL Investments, how did you advise Lampert and other Sears leaders on:
a. Lampert’s decision to buyback nearly $6 billion worth of Sears stock between 2005 and 2010 and take an “ax to the company’s operating expense[s] and capital expense[s] in the process?
b. Lampert’s decision to load Sears with large amounts of debt, leaving the company with a net debt-to-equity ratio of 1.48 by 2013?
c. Lampert’s decision to repeatedly [spin] off major assets to shareholders “beginning in 2011 and 2012” at the expense of the business
d. Lampert’s decision to “split off 235 of Sears’ most profitable stores and 31 other Sears real-estate holdings, selling it to a publicly traded real-estate investment trust (REIT) called Seritage Growth Properties for $2.7 billion, leaving Sears in a precarious financial state?
e. Other cost-cutting decisions that led to over 3,500 store closures and 20,000 job losses?
Warren has also asked Mnuchin if he has sought and/or received any waivers from his ethics agreements.
Warren and AOC want answers and Secretary Mnuchin has until June 13, 2019 to provide them.