Senator Elizabeth Warren is calling for executives who abuse bailout money to be held criminally liable. Warren wrote in a letter to the Federal Reserve that she wants civil and criminal penalties to go along with the bailout money executives receive. She also reiterated her stance to Fed Chairman Jerome Powell and Treasury Secretary Steve Mnuchin during a Senate hearing.
Warren said that if executives who receive bailout funds do not use them in accordance with the guidelines, they will be brought up on “civil and criminal penalties, including disgorgement.” She also wants them to have to immediately repurchase at full price for violating the terms set.
Sen. Warren was especially hard on Secretary Mnuchin during the Senate Banking Committee hearing on Tuesday. Warren told Mnuchin that she was holding him personally accountable for assuring that the $500 billion he was overseeing was actually put to work for working Americans.
Warren continued to interrogate Mnuchin as to whether he would “require companies that received the bailout money from the taxpayers to keep their workers on the payroll.” Mnuchin declined to respond which did not sit well with Warren. She interrogated him again but Mnuchin would only say that employees being kept on the payroll was “discussed with both sides of the aisle.” In response, Warren told Mnuchin, “I’m talking about your terms sheets.”
Warren then went into the topic of criminal liability. She asked Mnuchin, “If you’re not going to require that they keep a single person on the payroll, will you create a certification process that ensures that executives are held personally liable and are subject to criminal penalties if they provide false information or misuse bailout funds?” Mnuchin replied, “We will review that.”
Warren did not believe the Treasury Secretary. She responded, “What you’re saying is that you won’t do it.” We’re in a situation where 35 million Americans have filed for unemployment. You’re in charge of half a trillion dollars. You’re boosting your Wall Street buddies and you’re leaving the American people behind.”
Mnuchin rejected the charge pointing out that the demands Sen. Warren was making were not in the original legislation and that her demands would not be met.
It was a heated exchange and we expect even more in the future.