Elizabeth Warren, AOC team up to jab Mnuchin for role in Sears' demise
U.S. Chamber of Commerce SVP John Wood criticizes Sen. Elizabeth Warren’s (D-Mass.) Corporate Executive Accountability Act. Warren’s proposal would make it easier to jail corporate executives for a company’s wrongdoing.
Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez teamed up on Thursday to criticize Treasury Secretary Steven Mnuchin for his role in the bankruptcy of chain store Sears.
In an open letter, the Democrats from Massachusetts and New York questioned Mnuchin’s actions when he served on the company’s board from 2003 until 2016 and his long-standing ties to Sears former Chairman and new owner Eddie Lampert.
"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,” they wrote in the letter. “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.”
After several years of declining sales, Sears filed for Chapter 11 bankruptcy in October last year.
Lampert and Mnuchin -- who happened to be college roommates -- were both named in an April lawsuit, alongside other board members, filed by the bankrupt estate of Sears Holding Corps for allegedly stripping the retailer of more than $2 billion in assets, ultimately contributing to the company’s demise. Lampert became CEO of the retailer after his hedge fund, ESL Investments, purchased the company in 2005.
During his tenure, Lampert closed more than 3,500 stores and fire more than 250,000 workers, while also imposing cost-cutting initiatives that led to sales declines and additional store closures.
Mnuchin said in his confirmation hearing that he would recuse himself from any official Pension Benefit Guaranty Corporation actions related to Sears. However, Ocasio-Cortez and Warren still had some questions about how he advised Lampert on several major decisions, including: why he loaded Sears with large amounts of debt, why he spun off assets to shareholders at the expense of the business, and why he bought back nearly $6 billion worth of Sears stock between 2005 and 2010.
“As a board member for the PBGC, did you participate in any discussions or decisions regarding Sears' underfunded pension plans?” the lawmakers wrote. “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?”
Despite the ongoing lawsuits, Sears announced earlier this month that it plans to open three pint-sized test stores in May in hopes of revitalizing its brand, as previously reported by FOX Business.