Congress

AOC and Warren team up to probe Treasury Secretary Mnuchin over Sears bankruptcy

Question Mnuchin's time on the Sears board, connection to CEO Eddie Lampert

Rep. Alexandria Ocasio-Cortez, D-N.Y., is questioning Treasury Secretary Steven Mnuchin about his ties to the bankrupt Sears. (Tom Williams/CQ Roll Call file photo)

Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez teamed up Thursday to blast Treasury Secretary Steven Mnuchin over the bankruptcy of Sears.

The Democrats from Massachusetts and New York, respectively, are questioning Mnuchin’s actions as a member of the Sears board and his longstanding ties to Eddie Lampert, the Sears CEO who came into that role after the retailer was purchased by his hedge fund.

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Lampert and Mnuchin were, in fact, college roommates.

“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.

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Warren and Ocasio-Cortez also produced a video to explain their inquiry.

“He is a walking example of what happens when rich and powerful people put other rich and powerful people into power,” Ocasio-Cortez said of the Treasury secretary.

 

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.

“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.”

Their concerns seem to originate from an April lawsuit in which what’s left of Sears (which also came to own KMart) sued Lampert, Mnuchin and other members of the Sears board.

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“Talk about conflicts, Lampert even sold Sears real estate to himself, and then rented that real estate back to Sears at prices he could set,” Warren, one of the 2020 Democratic presidential hopefuls, said in the video. 

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.

“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.”

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