Elizabeth Warren and AOC Want to Know if Steven Mnuchin Helped His College Roommate Steal $2 Billion

By Bess Levin, Vanity Fair

30 May 19

Elizabeth Warren and A.O.C. are demanding answers about Mnuchin’s friendship with former Sears chairman Eddie Lampert.

reasury Secretary Steven Mnuchin, also known as the resident Trump administration footstool, has not had a great week. On Tuesday, The Washington Post reported that, according to an I.R.S. draft memo, he’s in violation of the law by not turning over Trump’s tax returns. Several days prior, we learned that his father is brought to literal tears at the thought of him working for Donald Trump. And on Thursday, he found himself in the crosshairs of Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez who are demanding he cough up some answers re: allegedly helping his college roommate pocket billions while bankrupting a company that once employed thousands of Americans.

In a letter addressed to Mnuchin—helpfully accompanied by an explainer video—the congresswomen write that they are “deeply concerned by the financial engineering and potentially illegal activity” that took place at Sears while Mnuchin was a board member, and which led to tens of thousands of jobs being lost. Last month, Mnuchin was named in a lawsuit filed by Sears’ holding company accusing its former chairman, hedge-fund manager Eddie Lampert, of a “multiyear and multifaceted scheme” to siphon more than $2 billion from the company’s coffers to himself, his hedge fund E.S.L. Investments, and other insiders. Mnuchin, along with other former board members, is accused of approving deals that the suit argues ultimately benefited Lampert, whom the secretary roomed with at Yale, worked alongside at Goldman Sachs, and who Lampert named a vice chairman of his fund—in which Mnuchin was an investor—from 2002 to 2003. Warren and A.O.C. quote the suit’s claim that Lampert, Mnuchin, and the other defendants had zero plan to return the company to profitability after “cannibalizing [its] core assets,” that they “breached their fiduciary duties by engaging in . . . self-dealing,” and 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.”

Warren and Ocasio-Cortez—who describe Mnuchin in their video as “a walking example of what happens when rich and powerful people put other rich and powerful people into power”—note that they are concerned the secretary is in a position “to take actions that benefit Sears’ shareholders and owners at the expense of workers and taxpayers.” They demand to know, among other things, whether Mnuchin was involved in any discussions about Sears’ pension plans as a board member of the Pension Benefit Guaranty Corporation, the federal agency that oversees private pension plans.

A Treasury spokesperson did not respond to Politico’s request for comment. In addition to serving as a board member at Sears, Mnuchin’s past professional life included several years as the “Foreclosure King of California,” a nickname he’d prefer people not use, but one that’s well-earned considering his time at mortgage lender OneWest coincided with kicking 36,000 homeowners out of their houses.

White House introduces $16 billion farm aid package to offset effects of its dumb trade war

As was the case with the $12 billion package from last year, farmers say they’d prefer Trump just end his trade war:

The move Thursday followed a breakdown in talks earlier this month between Washington and Beijing. Amid expectations that American farmers will be hindered selling crops to China’s 1.4 billion-person market, commodity prices, which were already mired in a years-long slump, sank further to their lowest level in more than 10 years.

In response to the U.S. imposing 25 percent tariffs on roughly $250 billion of Chinese imports over the past year, Beijing has imposed tariffs on agricultural products, and state-controlled companies in China largely halted buying U.S. farm goods. The result has been climbing commodity prices for other parts of the world—Brazil in particular has capitalized by selling soybeans to China—but plunging prices in the U.S. market. . . . Soybeans are the biggest crop export to China. Before the conflict, the U.S. shipped $10 billion to $12 billion a year of soybeans to China; over the past year, that has fallen to about $2 billion.

In a statement, Agriculture Secretary Sonny Perdue said that Trump created the program “because he knew farmers would bear the brunt of this lack of trade deal with China once again,” adding that while “farmers themselves will tell you they’d rather have trade than aid . . . they’ll need some support.”

Hedge-fund manager known for keeping pair of brass testicles on desk retiring to spend time with football team

David Tepper, who once kept “a brass replica of a pair of testicles in a prominent spot on his desk” and rubbed them “for luck during the trading day,” is moving on to next act:

Famed hedge-fund manager David Tepper plans to turn Appaloosa LP into a family office managing his personal wealth as he spends more time focused on running the Carolina Panthers, his professional football team, said people familiar with the matter. Executives at the $13 billion hedge fund have discussed several scenarios for when they could return outside clients’ money, some of the people said, including over several years or around the end of this year. One of these people said a period of several years was more likely. Mr. Tepper’s money makes up more than 70 percent of the firm’s assets under management.

The expected change would mark the next chapter for one of Wall Street’s most widely respected investors. . . . He earned billions during the depths of the financial crisis by buying shares in beaten-down banks while others headed for the exits. He has notched annualized returns of more than 25 percent on average since Appaloosa’s start, said a person familiar with the firm. He has used his wealth to push for the passage of gay marriage in New York, buy into professional sports teams and support education and food banks around the country.

Tepper started Appaloosa in 1993 after being passed over for a partnership at Goldman Sachs by his then-boss, future New Jersey governor Jon Corzine. He never got over the slight, and years later, bought and bulldozed Corzine’s beach house, telling New York magazine that it was his way of bringing “justice in the world,” even though, to be fair, Corzine kind of did him a favor considering he became a billionaire many times over via his fund.