Pascrell Assails Mnuchin Treasury Corruption

Letter to Treasury Secretary seeks answers on his using program for the poor to enrich a disgraced con artist

WASHINGTON, DC – U.S. Rep. Bill Pascrell, Jr. (D-NJ-09) today wrote to U.S. Treasury Secretary Steve Mnuchin demanding answers to a New York Times report alleging that Mnuchin broke his own department’s own guidelines in ordering that a friend of his, disgraced con artist Michael Milken, receive favorable coverage for a tax break intended to benefit needy and impoverished communities.

“I write to you regarding alleged rampant corruption within your department. An article published in the New York Times on October 26, 2019 posits that at your direction, the Treasury Department abused a program designed to help low-income and impoverished Americans to benefit Michael Milken, a disgraced con artist who served time in prison for staggering financial crimes. I demand answers from your office on these credible findings,” Pascrell writes.

The Times report notes that after meeting with his friend Milken, Mnuchin ordered his department to ignore set guidelines for designating areas as opportunity zones to certify a swath of land in the Nevada desert lying northeast of Carson City. By a lucky coincidence, that area encompasses real estate properties co-owned by Milken near Milken’s vacation home, making Milken eligible for a lucrative tax break.

The opportunity zones program was created as part of the GOP tax scam law of 2017 to “spur economic development and job creation in distressed communities” throughout the United States.  The October 26 report comes on the heels of a similar exposé by the paper which found that the Trump administration was perverting the opportunity zones program to benefit millionaire real estate developers and friends and family of Donald Trump.

“It should go without saying that the United States government is not a piggy bank to be looted for the sole benefit of the President and his friends. Yet this is not only what is occurring in your department, but it is happening at your direct supervision. Please provide answers to my questions immediately,” Rep. Pascrell’s letter concludes.

A copy of Rep. Pascrell’s letter to Mnuchin is available here, the text of which is provided below.

October 29, 2019

The Honorable Steven Mnuchin

Secretary

United States Department of the Treasury

1500 Pennsylvania Avenue, NW

Washington, DC 20220

Dear Secretary Mnuchin:

I write to you regarding alleged rampant corruption within your department. An article published in the New York Times on October 26, 2019 posits that at your direction, the Treasury Department abused a program designed to help low-income and impoverished Americans to benefit Michael Milken, a disgraced con artist who served time in prison for staggering financial crimes.^[i] I demand answers from your office on these credible findings.

The $1.5 trillion in tax cuts that mainly went to the top 1% of Americans jammed into law by congressional Republicans in 2017 is one of the worst pieces of legislation passed by Congress in the last generation.^[ii] However, its creation of qualified opportunity zones to “spur economic development and job creation in distressed communities” throughout the United States represents a noble goal which, if pursued, could be of significant benefit to millions of needy Americans.^[iii] Unfortunately, those goals are not being fully realized as the program, much like the rest of the tax scam law, has been perverted to profit the super-rich, including Donald Trump’s relatives and other friendly associates.^[iv] Only now we find out that your personal friends, as well, are enjoying windfalls through this program.

The Times article asserts that after you met with Milken, you directed your staff to ignore set guidelines for designating areas as opportunity zones to certify a swath of land in the Nevada desert lying northeast of Carson City. By a lucky coincidence, that area encompasses real estate properties co-owned by Milken near Milken’s vacation home, and after your “personal instruction” was effectuated, Milken’s property became eligible for a lucrative tax break as an opportunity zone.

We know about this unusual action only because a courageous former staff member in your department has come forward to pour light on your behavior. Additionally, whistleblowers at the Internal Revenue Service prepared a contemporaneous memorandum which noted that your order would “undermine the public’s trust in the IRS,” “open[] the door for accusations that the [opportunity zones] determination process was influenced by political considerations or bias,” and that your decision “may call into question whether the IRS’ independence with respect to administration is compromised.” I urge that you read this page long memo, a powerful and succinct compendium of corruption you have enabled.

Please explain to me why you violated strict guidelines and ordered the awarding of special status to this property zone in Nevada. In your discussion with Milken referenced in the October 26 article, did Milken or any of his associates request this designation? Did Milken or his associates ever request your direct assistance in receiving favorable designation for the opportunity zones programs on any other occasion? Please provide my office with a list of every conversation or interaction with Milken since January 1, 2018. Have you or members of your staff held other meetings with real estate developers who have requested special dispensation to receive tax breaks as opportunity zones? More generally: do you see your job as protecting the interests of the entirety of the American people or a handful of plutocrats and personal friends? Do you think it is appropriate for the Secretary of the Treasury of the United States to seek special favors for one of the most prolific financial criminals in world history? To begin to get to the bottom of corruption within your department, we need answers to these questions.

It should go without saying that the United States government is not a piggy bank to be looted for the sole benefit of the President and his friends. Yet this is not only what is occurring in your department, but it is happening at your direct supervision. Please provide answers to my questions immediately.

Sincerely,

Bill Pascrell, Jr.

Member of Congress

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[i] https://www.nytimes.com/2019/10/26/business/michael-milken-trump-opportunity-zones.html

[ii] https://pascrell.house.gov/news/documentsingle.aspx?DocumentID=2404

[iii] https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questions

[iv] https://www.nytimes.com/2019/08/31/business/tax-opportunity-zones.html