Rep. Bill Pascrell (D-N.J.), on Tuesday pressed Treasury Secretary Steven Mnuchin on “alleged rampant corruption” at the department, after The New York Times reported that Mnuchin instructed the department to take an action that benefited former “junk bond king” Michael Milken.
In a letter addressed to Mnuchin, Pascrell, a member of the House Ways and Means Committee, chided the secretary, warning him that the government does not exist for the benefit of its higher-ups.
“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.”{mosads}
President Trump’s tax-cut legislation created a program called “opportunity zones,” under which individuals and businesses who make investments in designated distressed areas can receive capital gains tax breaks. Opportunity zones have received some bipartisan support, with backers hoping that it can help to revitalize low-income communities. But the program has also faced criticism that is primarily helping wealthy investors and will provide little benefit to low-income people.
Pascrell said in his letter that the opportunity zone program has a “noble goal,” but that the goal isn’t “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.”
The New York Times reported Saturday that the Treasury granted an opportunity zone designation to an area in Nevada last year — after having previously determined that the area was ineligible — at the instruction of Mnuchin.
The area includes land co-owned by Milken, and the decision to grant the area opportunity zone status came after Mnuchin spent time with Milken, the Times reported.
Pascrell asked Mnuchin to provide him with information about his interactions with Milken and the decision to grant opportunity zone status to the Nevada area.
“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?” Pascrell asked. “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.”
In a statement over the weekend, Treasury spokeswoman Monica Crowley called the Times story “highly inaccurate and deeply misleading.” She said that Mnuchin had no knowledge of Milken’s investments in the Nevada county and that Treasury considered adding the tract as an opportunity zone at the request of public officials in the state.
“Nevada identified a discrepancy between the Opportunity Zone nomination instructions and an IRS revenue procedure governing the program,” Crowley said. “Nevada asked Treasury to consider a nomination that complied with the revenue procedure. The IRS and Treasury concluded that Nevada’s request was permissible and, after appropriate review, approved the nomination.”
Milken also blasted the Times story, saying in a letter Sunday that he “played no role in any recommendations to any government officials regarding changes in opportunity zone regulations.”
Pascrell isn’t the only Democrat who has criticized the Trump administration in the wake of the New York Times story.
Sen. Bernie Sanders (I-Vt.), a Democratic presidential candidate, tweeted the Times article on Saturday, saying “when we defeat Trump, we’re going to end this tax scam [and] invest in working-class communities that have been fleeced.”
Senate Finance Committee ranking member Ron Wyden (D-Ore.) said in a statement Monday that “this is an egregious example of corruption that demands a serious congressional investigation.”
This story was updated at 7:13 p.m.