Steven Mnuchin, Treasury Secretary, illustrated by example how corrupt parasite guildists operate during his confirmation hearing. This post is in tandem with yesterday’s post concerning Mnuchin’s greatly expanded powers, Extra $2 Trillion Looted from Public Coffer to Replenish US Treasury’s Murky Exchange Stabilization Fund
In testimony, it appeared to be taken for granted that Sears Holdings would file for bankruptcy. Sears has 200,000 pensioners to pay. This has now transpired.
Sen. Menendez: “For about 12 years, you served on the Finance Committee which was tasked with reviewing investment policies of the retirement plans of the company and its subsidiaries, is that correct? And the chairman and CEO of Sears Holdings is a gentleman named Eddie” Lampert, who I understand is your former college roommate, correct?
Mnuchin: That is correct. I think actually I’ve invested close to $26 million.
Menendez: Now Sears has been performing poorly and, as a result, forced to sell assets to cover operating costs and to contribute to its pension fund. Interestingly, several of the most valuable assets have been sold in part to Mr. Lampert’s hedge fund, including Lands End, Sears Canada, and most of Sears’ real estate. The real estate was sold off to a different entity, whose largest shareholder is Mr. Lampert’s hedge fund. And that seems to have resulted in a shareholder lawsuit, according to SEC filings.
The Pension Benefit Guaranty Corporation (PBGC) initiated an agreement with Sears to protect the pension benefits of the more than 200,000 plan participants after the real estate deal and significant cut to pensioners’ health subsidies that occurred during your watch.
Unfortunately, the agreement with the PBGC puts the plan’s pensioners behind Mr. Lampert’s hedge fund in the ability to get assets from Sears in any bankruptcy proceedings. Because of this, because Sears has received at least $800 million in secured loans from Mr. Lampert’s hedge fund, some of them secured by Sears properties. The Sears pension fund currently faces a $2.1 billion dollar funding obligation gap.
Mnuchin: That sounds about right but let me —
Menendez: Are you aware that if you are confirmed as Treasury Secretary, you would become one of three board members of the Pension Benefit Guaranty Corporation that has the power to either accept or deny a pension plan termination application, such as could occur with Sears bankruptcy, making the Federal Government cover Sears’ pension tab? Do you recognize that you’re going to be part of that board?
Menendez: You do? Now, so here’s where my concern is and maybe you can elucidate it for me. You were a Director at Sears for 12 years where you had oversight over the administration and investment in the pension fund. That pension fund has been underfunded, its benefits were cut during the time period you were there, it now faces a $2.1 Billion funding obligation gap.
Sears has sold off some of the most valuable assets while you’ve been on the board. Your college roommate’s hedge fund has large interests in the properties sold, numerous secured loans with Sears and owns a controlling share of Sears’ stock shares. You earned up to $26 million last year from your shares in that hedge fund and you’re refusing to divest yourself of the hedge fund.
Should Sears go bankrupt and you if confirmed as Treasury Secretary, are a PBGC director who would have a role in the Pension Benefit Guaranty Corporation’s attempts, as an unsecured creditor, to recover $2 billion for the unfunded liabilities in the Sears pension fund while simultaneously trying to not lose money in your hedge fund investments in Sears that you hold with your college roommate, who is the CEO of Sears. How is it that you’re going to do that?
Separately, Sen. Wyden discussed Mnuchin role with One West Bank and a looting operation called Relativity Media. Modus operandi is once again to “spin off” aka strip valuable assets into a trust and leave the remainder bankrupt.
One West stemmed from IndyMac Bank in Pasadena, Calif., which collapsed in 2008 in one of the largest bank failures in U.S. history. Mnuchin led a group of investors, including funds run by Soros and other hedge-fund and private-equity titans, who bought it from the government for about $1.5 billion. Illustrating in spades how parasite guildists work, the Federal Deposit Insurance Corporation (FDIC) guaranteed to cover a portion of any future loan losses, a lucrative arrangement for Mnuchin and his partners. See second video.