Treasury Secretary Steven Mnuchin, whose role is foster economic growth and job creation, did the opposite as a Sears board member, profiting from the once-mighty retailer’s downfall and costing thousands of workers their jobs, Sen. Elizabeth Warren (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) say.
Warren and Ocasio-Cortez tore into Mnuchin Thursday in a three-minute video posted on Twitter, along with college roommate Eddie Lampert, who became CEO of Sears after his hedge fund bought the company and merged it with Kmart. The lawmakers accused the two billionaires of plundering Sears for their own personal gains.
“Washington is supposed to work for everyone. Instead, the rich & powerful like @StevenMnuchin1 & Eddie Lampert use it to become even more rich & powerful, while workers are left holding the bag. This is the DC swamp at its worst,” Warren tweeted.
In a five-page letter, the lawmakers asked Mnuchin to provide information about his role as a Sears board member and about the Treasury Department’s continued involvement with Sears.
What was left of the hollowed-out company called Sears Holdings Corp. filed for bankruptcy in October. Last month, Sears Holdings sued Lampert, his hedge fund ESL Investments, Mnuchin and other major shareholders, alleging they stripped Sears of billions in assets for themselves, beyond the reach of creditors, before the bankruptcy.
Lampert and his hedge fund denied wrongdoing. Mnuchin, who quit the Sears board when President Donald Trump picked him as treasury secretary, didn’t comment.
The Treasury Department did not immediately respond to a request for comment about accusations raised by Warren and Ocasio-Cortez.
“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,” Warren and Ocasio-Cortez wrote in the letter 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.”
The lawmakers say Lampert sucked about $6 billion in assets from Sears while closing stores and firing more than a quarter-million workers. He sold Sears real estate to himself and rented the property back to Sears at prices he set. In February, he purchased some of Sears’ most valuable remaining assets, including DieHard and Kenmore brands, in a bankruptcy auction.
The Sears Holdings lawsuit says the financial schemes led to the company’s downfall. “Sears would have had billions of dollars more to pay its third-party creditors today and would not have endured the amount of disruption, expense, and job losses resulting from its recent bankruptcy filing,” the suit says.