Ocasio-Cortez and Warren Have Some Tough Questions for Mnuchin About the Collapse of Sears

September 13, 2020 0 By HearthstoneYarns

Two high-profile Democrats have questions for Treasury Secretary Steve Mnuchin about his role in the downfall of Sears as a former member of the retailer’s board of directors, and his possible role in government decisions about the company.

Rep. Alexandria Ocasio-Cortez (N.Y.) and Sen. Elizabeth Warren (Mass.), who is also a 2020 presidential candidate, released a video Thursday in which they outline the details of a letter (pdf) they sent to Mnuchin seeking answers about his involvement with Sears:

“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,” reads the lawmakers’ 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.”

Last month, Sears Holding Corp. filed a lawsuit against former chairman Eddie Lampert and former board members, including Mnuchin, “for allegedly stripping [Sears] of billions of dollars as it collapsed into bankruptcy” through deals that served Lampert, his hedge fund ESL Investments, and other insiders. The suit claims that “had defendants not taken these improper and illegal actions, 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.”

Sears filed for Chapter 11 bankruptcy last October after years of financial trouble. In February, a federal judge approved the sale of the company’s major remaining assets to Lampert’s hedge fund. Mnuchin, a close friend and former college roommate of Lampert, served on Sears’ board of directors until December of 2016. The U.S. Senate confirmed Mnuchin as Treasury secretary in February of 2017.