In a Letter, Sen. Warren and Rep. Ocasio-Cortez Question Sec. Mnuchin on Potentially Illegal Activity While He Served on Sears Board

Mnuchin, longtime friends with former Sears CEO Eddie Lampert, served on the Sears/Kmart board as the corporation was stripped of assets and descended into bankruptcy

NATIONWIDE — Today, Senator Elizabeth Warren and Congresswoman Alexandria Ocasio-Cortez sent a letter to former Sears and Kmart Board member and Treasury Secretary Steve Mnuchin, citing his role in the destruction of 250,000 jobs and the closing of 90 percent of Sears and Kmart stores. They also request disclosure about potential involvement in illegal activity while he served on the board of Sears and Kmart.

“The story of Sears is a powerful example of rich people in power looking out for each other,” said Rep. Ocasio-Cortez. “As a board member, Mnuchin was too busy looking the other way while his long-time friend and former CEO, Eddie Lampert, ran Sears into the ground with his seemingly illegal activity and made away with billions.”

“I stand with United for Respect and all workers who lost jobs and severance pay when Wall Street fat cats like Eddie Lampert and Steven Mnuchin bankrupted their employers,” said Sen. Warren. “We’re going to keep on fighting for justice, accountability, and better futures for all.”

The letter details Mnuchin’s long-time friendship with the former billionaire CEO of Sears, Eddie Lampert, who placed him on the boards of ESL Investments, Lampert’s hedge fund, and Kmart and Sears. Sen. Warren and Rep. Ocasio-Cortez assert that Mnuchin’s demonstrated a pattern of support for Lampert’s business decisions that enriched executives and shareholders at the expense of the company and workers. It reads:

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 a position to take actions that benefit Sears’ shareholders and owners at the expense of workers and taxpayers.

The letter also references the recent lawsuit against Lampert, Mnuchin, and other shareholders, which alleges Lampert falsified financial projections to hide Sears’ losses, had no plan to return the company to profitability, and breached fiduciary duties by engaging in self-dealing. The lawsuit claims that Lampert transferred over $2 billion of assets to himself, and other Sears stakeholders, while systematically picking apart the company and its assets.

“Eddie Lampert destroyed our company and our jobs while his old friend, Secretary Mnuchin, sat on the board and watched it happen,” said Adrianna Perea, a United for Respect leader who has worked at Sears in El Centro, CA for 29 years. “Those two upended the lives of thousands of employees like me by destroying our jobs, leaving many of us with no severance, and putting our families at risk of losing everything, while they got rich. It would be criminal if now they get to walk away with no penalty.”

Joining with United for Respect, former and current Sears and Kmart employees across the nation are calling for representation on the new Sears’ corporate board to ensure Lampert prioritizes the long-term welfare of the company and the remaining 45,000 employees over short-term profits for himself. Building on the playbook of Toys ‘R’ Us workers, who fought for and won a historic $20 million hardship fund from KKR and Bain Capital, they are calling on Lampert to set up a hardship fund to provide financial relief to all employees, including part-time employees, who have lost their jobs as a result of store closures.

If you’re covering Sears and are interested in speaking with an impacted employee, please reach out to Taylor Campbell at (202) 854-9571 or [email protected].