19 State AGs Warn BlackRock to Stop Pushing Political Agenda

By Alex Newman
Alex Newman
Alex Newman
Alex Newman is a freelance contributor. Newman is an award-winning international journalist, educator, author, and consultant who co-wrote the book “Crimes of the Educators: How Utopians Are Using Government Schools to Destroy America’s Children.” He is the executive director of Public School Exit, serves as CEO of Liberty Sentinel Media, and writes for diverse publications in the United States and abroad.
August 16, 2022 Updated: August 18, 2022

A growing coalition of state governments is pushing back against the world’s largest asset manager, saying it is putting its political agenda over the interests of clients and even U.S. national security.

Last week, a group of 19 state attorneys general from Republican-leaning states sent a strongly worded letter (pdf) to BlackRock CEO Larry Fink demanding an end to this agenda and a return to fulfilling its fiduciary duties, suggesting the company’s actions may even be illegal.

Investigations and further legislative action may be next, state officials involved told The Epoch Times.

“Our state is heavily invested in organizations like BlackRock, and those organizations owe a fiduciary duty to the state of Montana to invest our money in the best way possible to earn returns,” Montana Attorney General Austin Knudsen said in a phone interview. “That doesn’t include pushing a liberal agenda.”

Saying that the company and its allies had failed to convince legislatures to back its ideas, Knudsen blasted what he argued was the company’s effort to impose “idealistic, green, utopian, progressive ideas” on Americans through economic pressure instead.

“I think companies like this are really teetering on the edge of being in violation of their fiduciary obligations,” added Knudsen, saying investigations and action by the legislature would be the next steps.

Indeed, numerous state laws require that fiduciaries such as BlackRock operate “solely” in the interests of their beneficiaries, for the “exclusive purposes” of benefiting those beneficiaries, the officials noted. In other words, their only job is to make money—not promote alternative agendas.

But instead of focusing simply on the risk and return of investments, as required, the letter accuses BlackRock of engaging in “activism” and even sacrificing the best interests of clients, taxpayers, and pensioners by focusing on its “climate agenda” and other political goals.

“Whether mixed motives arise from a desire to save the world or attract investment from European or left-leaning pension funds, is ultimately irrelevant to the legal violation,” said the state attorneys general from Arizona, Nebraska, Alabama, Arkansas, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Ohio, Oklahoma, South Carolina, Texas, Utah, and West Virginia.

“Our states will not idly stand for our pensioners’ retirements to be sacrificed for BlackRock’s climate agenda,” they warned.

Indiana Attorney General Todd Rokita, one of the signatories, told The Epoch Times he has an obligation to step in.

“As the attorney general, I have a responsibility to protect consumers from restrictions on production and unlawful market manipulation,” Rokita said in an email.

“Big banks and money managers are coordinating efforts to suppress investment in energy,” he added. “Their goal is to shut down coal and natural-gas plants to push their political agenda.”

According to Rokita, BlackRock’s own public statements and commitments indicate that it has used citizens’ assets to “pressure companies to phase out fossil fuels, increase energy prices, drive inflation, and weaken the national security of the United States.” Other AGs echoed those concerns.

“BlackRock and other asset management firms affirmatively tout this market dominance,” he added.

BlackRock: An Economic Behemoth

With over $10 trillion in assets under its management, BlackRock is one of the most powerful entities in the world. It manages more wealth than the annual GDP of every country in the world except the United States and China, according to data cited in the letter.

BlackRock also owns large stakes—in many cases the largest stake—in an enormous array of companies in the United States and worldwide. That often includes owning stakes in companies that are ostensible competitors.

As such, the New York-based firm has vast influence in determining the policies of those companies, in addition to government policy around the world.

Current and former BlackRock officials also have a very close relationship with senior officials in the Biden administration and the Federal Reserve System. Some critics even argue that there is a “revolving door” between the company and the government.

Biden selected Brian Deese, global head of sustainable investing at BlackRock, to lead his National Economic Council. Deese previously served as a senior adviser to President Barack Obama and Former Secretary of State Hillary Clinton.

Former BlackRock global chief investment strategist and former Obama official Michael Pyle now serves as chief economic adviser to Vice President Kamala Harris.

Another top Biden administration official, Deputy Treasury Secretary Adewale Adeyemo, previously served as chief of staff to BlackRock CEO Fink.

Fink, a longtime Democrat, is also very well connected, sitting on the board of the immensely powerful Council on Foreign Relations, which brings government officials, media companies, and major business interests together. Fink also sits on the board of the better-known World Economic Forum. Both organizations promote sustainability policies supported by the UN and aligned with BlackRock’s agenda.

The firm has long been criticized for harming U.S. national security and economic competitiveness by directing foreign investment to communist China.

BlackRock also came under fire for its role in operating various Federal Reserve programs that critics say showered taxpayer money on well-connected companies willing to push the firm’s agenda.

For instance, BlackRock’s consulting arm oversaw the Federal Reserve’s 2020 emergency asset-purchasing program in what appeared to be a non-bid contract. BlackRock also oversaw the Fed program dealing with Bear Stearns and AIG assets during the economic crisis that began in 2007.

But state officials are now lashing out against the corporate giant’s leaders using BlackRock’s influence to impose their political and economic views on American companies and on the U.S. economy more broadly.

In particular, the top lawmen in their states blasted BlackRock’s efforts to promote “ESG” metrics, which focus on a company’s “Environmental, Social, and Governance” profile instead of just its profitability and risk.

The influence exerted by BlackRock and a handful of other corporate titans has caused a global proliferation of ESG investing and interest, in addition to a strong shift in environmental and political stances taken by companies worldwide.

In a statement provided to The Epoch Times by email, BlackRock Managing Director of Corporate Communications Ed Sweeney defended the firm and its policies.

“We are a fiduciary to our clients, helping them navigate investment risks and opportunities so they can reach their long-term financial goals,” he said.

“The money we manage is not our own,” he continued. “It belongs to our clients, many of whom make their own asset allocation and portfolio construction decisions. We offer a range of products and strategies to achieve their desired outcomes. It’s their choice. Many of our clients are choosing to invest in a mix of traditional energy companies, natural gas infrastructure, renewables and new decarbonization technologies because of the investment opportunities stemming from their crucial role in the economy.”

“Earlier this year, we further expanded client choice by offering interested institutional clients, including all U.S. public pension clients, the ability to directly vote their shares,” Sweeney concluded. “Clients entrusting us with $530 billion, more than a quarter of our institutional clients’ equity index assets, have taken this option.”

Legal Violations

However, the state lawmen were not convinced. Montana Attorney General Knudsen said the company had not issued a formal response to the letter yet.

But when asked about the firm’s comments to The Epoch Times, Knudsen said a statement like that was “not entirely surprising.” Still, he called it a “pretty good deflection” and a “non-answer.”

“I’m sure they are facing a lot of pressure from Montana and the many other states that are looking at what they’re doing,” Knudsen told The Epoch Times. “That’s a fairly large risk for BlackRock, so I expect they are going to try to walk that back as much as they can.”

In the letter, the state attorneys general warned about a wide range of potential legal violations that they asked Fink and BlackRock to address—among them, considering factors outside of the best financial interests of clients in its decision-making.

“While couched in language about long-term value, BlackRock’s alignment of engagement priorities with environmental and social goals, such as the UN’s Sustainable Development Goals, suggests at a minimum a mixed motive,” they said in the letter.

Operating with a “mixed motive,” the letter warned, indicates a “rampant violation” of laws requiring a fiduciary to operate solely in the interest of clients.

“A fiduciary responsibility requires putting your client’s best interests ahead of any political agendas,” said Arizona Attorney General Mark Brnovich, the Republican who helped organize the effort. “Helping to ensure financially secure retirements must be the first priority of this asset manager.”

Specifically, the letter cited BlackRock’s role in a global corporate network known as the Net Zero Managers Alliance, which calls on its members to help achieve net zero emissions of so-called greenhouse gases to help reach the goals set under the United Nations Paris Agreement.

In fact, the alliance itself outlines on its website the vision for “all assets under management to achieve net zero emissions by 2050 or sooner.”

The firm is also working to “stifle opposing viewpoints altogether” on climate issues and the U.N. Paris Agreement, the AGs said.

“Rather than being a spectator betting on the game, BlackRock appears to have put on a quarterback jersey and actively taken the field,” the attorneys general said in the Aug. 4 letter. “Squelching political speech is the action of an activist whose mind is made up, not that of a neutral fiduciary seeking ‘dialogue.’”

In addition, the coalition of chief law enforcement officers warned of potential anti-trust violations over energy-market manipulations. Among other concerns, they said that “group boycotts,” “restraining trade,” and “concerted refusals to deal” all “clearly” run afoul of anti-trust laws.

All of these issues have negatively affected the states and their pension funds, the law enforcement chiefs said.

Montana Attorney General Knudsen pointed, as one example, to the devastation hitting the coal industry and energy producers in his state because of “green” policies pursued by financial institutions.

“Under Montana law, our Board of Investments and those contracted with it have a legal obligation to make money,” Knudsen said. “There is no obligation to worry about carbon emissions, that’s not what our law says.”

“When you start sacrificing your obligations to push green ideas and climate agendas, that’s when attorneys general like me have problems,” he added.

Warning that “talk is cheap,” Knudsen said he and other attorneys general are looking forward to hearing back from BlackRock and obtaining more information.

“The next step is investigation,” he continued, adding that the policies were coming from BlackRock leadership. “We need to see how far down this rabbit hole they’ve gone. That’s where my office comes in; we can investigate some of this.”

The legislature is likely to act, too. “I’d be shocked if our state legislature did not take this up in the next session and take some action on this,” Knudsen said, adding that there were conversations with the governor and the state investment board that also needed to take place.

“To BlackRock, I say: Stop interfering with these companies and do your job,” he concluded.

Severing Ties and Financial Black Eyes

While the attorneys general launched their opening salvo against BlackRock last week, a coalition of 16 state treasurers had already started working on these issues in early 2022.

Led by West Virginia Treasurer Riley Moore, top financial officials from over a dozen states warned that their states would stop doing business with BlackRock and other major financial institutions unless they stopped pursuing “woke” policies such as waging war on traditional energy sources.

Last month, Moore’s office placed five leading financial institutions on his state’s “Restricted Financial Institution List.” They are now banned from banking contracts with West Virginia due to “conflicts of interest” involving attacks on energy companies.

The institutions on the list are BlackRock Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, and Wells Fargo & Co. One major bank avoided being placed on the list by ending its ban on lending to companies that deal with “fossil fuel” energy, a critical industry in West Virginia.

In a phone interview with The Epoch Times, Moore commended the state attorneys general for their letter and for their efforts to enforce the law.

Echoing the state AGs, Moore said financial institutions must do what they are required by law to do: Make money for clients, which in many cases include state governments and pension funds, rather than pursue political agendas.

“They should not be worried about all of this nonsense,” said Moore, referring to what he describes as “woke” policies that are pushed exclusively by the political left. “They are playing politics with our money, trying to push their political agenda on the country.”

“Our own money is being weaponized against us,” he added.

The goal of the treasurer coalition is to have “banks act like banks,” Moore continued, calling on the institutions to “get out of the political nonsense and stop trying to kill our industries.”

“They are receiving tax dollars from the fossil-fuel industry while at the same time trying to kill the industry,” he said.

Consequences of the banks’ actions include surging energy prices that contribute to rapidly rising inflation, growing dependence on the Chinese Communist Party (CCP) for EV batteries and wind and solar power equipment, fewer jobs available for West Virginians and Americans, and more.

Even efforts in West Virginia to extract rare earth minerals—a critical industry sector currently dominated by the CCP—cannot access capital due to the banks’ “woke” policies, he said.

“We are all paying for this social experiment they’re pushing on us,” the West Virginia State Treasurer added. “They would rather have us relying on China.”

The banks have issued statements condemning Moore and his actions. “That bothers me zero,” Moore said, brushing off the attacks.

Like the attorneys general behind the letter, Moore said he expects many more states—including major states such as Texas—to pursue similar policies.

“We were first, but there’s an army behind me,” he said. “The upcoming legislative sessions around the country will see many bills on this issue.”

BlackRock was given until Aug. 19 to respond to the AG letter.

Alex Newman
Alex Newman is a freelance contributor. Newman is an award-winning international journalist, educator, author, and consultant who co-wrote the book “Crimes of the Educators: How Utopians Are Using Government Schools to Destroy America’s Children.” He is the executive director of Public School Exit, serves as CEO of Liberty Sentinel Media, and writes for diverse publications in the United States and abroad.