BlackRock is famous for it's political "both-sideism". A pause in donations to those who voted against accepting the election results means nothing if it is quietly removed in 6 months, it needs to be permanent.
Commentary by Pete Sikora, Climate & Inequality Campaigns Director at our partner New York Communities for Change
On January 12, BlackRock announced it would pause campaign donations to all politicians while it conducts a “thorough review of the events” and considers how it will make future contributions. Never mind that those “events” were a violent insurrection at the US Capitol egged on by numerous identifiable Members of Congress who continue to defy the will of American voters. At a minimum, one would think the company would make a distinction between the politicians who voted against certifying the election and those that didn’t, as some firms, including big three asset manager State Street, have done. Instead, BlackRock is choosing to obscure responsibility for an ongoing crisis and threat to the American republic.
This kind of politically advantageous both-sidesism is BlackRock’s modus operandi. As the world’s largest asset manager, BlackRock has amassed its wealth and influence while working to make sure politicians from both parties protect its interests. That has included giving a total of $85,000 in donations to 15 of the election deniers, as well as donating to deniers of climate change, even though Larry Fink has promised to place climate and sustainability at the center of BlackRock’s investment decisions. Now BlackRock is dithering on democracy, even after an attempted coup based on a rationale that Larry Fink himself called an affront to the “essential tenets of our democracy.”
Just as meaningful federal action on climate change has been stymied for decades by liars and charlatans at all levels of government, this democratic crisis threatens to accelerate in the coming years if powerful gatekeepers of our economy and politics fail to take a stand. A functioning democracy requires lawmakers that hold to a basic standard of truth. Lies and facts matter. Our climate and democracy crises are closely linked, where one set of lawmakers is ready to act on the implications of basic reality and science, while the other set – some of whom BlackRock has financed – inverts reality to form a tangled mass of conspiracy and lies.
BlackRock has built a machine in DC to preserve the status quo and avoid scrutiny and regulation. This past week, the company announced that one of its founders, Barbara Novick, who ran that political machine, is retiring. Under her tenure, BlackRock lobbied to avoid designation as “systemically important,” which would have opened it up to greater regulation. It has become a major influence on financial policy, even being chosen to manage the Federal Reserve’s key programs to prevent economic collapse during the coronavirus pandemic.
Currently, three high-level BlackRock executives are headed to the White House and major agency appointments, including as Director of the National Economic Council, Deputy Treasury Secretary, and Economic Advisor to the Vice President. Before they worked at BlackRock, these executives had spun through the revolving door out of high-level government jobs. Now, they’re back. The company has made similar moves to build influence with other governments, globally. In the last decade, BlackRock has effectively replaced Goldman Sachs as the finance powerhouse of influence.
Meanwhile, BlackRock even resists being accountable to the same standards it calls for at the companies it invests in. BlackRock has historically sought to thwart efforts to force it to disclose its political spending and lobbying efforts. In 2019 it defeated a shareholder resolution calling for lobbying disclosure. And in 2020, BlackRock voted “overwhelmingly” against proposals to improve political spending disclosure at companies in which it holds shares. For all its talk of responsible this and ESG that, BlackRock has consistently held the position that it is above having to take responsibility for its own actions or to follow through on the commitments it makes.
A year ago, Larry Fink raked in applause and accolades for committing to holding companies accountable on climate and promising to exclude thermal coal from BlackRock’s active funds. Subsequent analysis showed it excluded only a small percentage of the coal industry. BlackRock continues to invest in oil and gas corporations as well as many of the companies leading deforestation globally. Just this week, a report showed that despite its much-touted coal exclusion policy BlackRock continues to hold $85 billion in coal company shares.
BlackRock may say that it wants to do something about climate change, but when it comes to action, it’s only making the smallest steps. It is imperative that BlackRock’s leadership acts with more decisiveness and accountability in this moment, when we are all working to defend against a coup. By refusing to denounce and withdraw support permanently from the Members of Congress that incited the attempted coup, BlackRock is being BlackRock: posing as if it’s making a big move but in fact not making the difference that it could – and should.
It is this same both-sidesism that has allowed some of the worst, most virulent climate deniers to be fixtures of our political debate. Never mind the big names, like Hall-of-Fame denier Ted Cruz, or Rick Scott and John Kennedy, who continue to abandon their Florida and Louisiana constituents by resisting even the most basic action on climate. What about goons like Louie Gohmert, who said climate change is good because it means “more plants,” or Mo Brooks, one of the primary inciters of the mob, who gained wide ridicule when he proposed, in a hearing of the House Committee on Science, Space and Technology no less, that sea level rise is caused by rocks falling into the ocean? You can’t make this stuff up. Companies like BlackRock need to reject these people, permanently. They are a threat to us all.
The connections between Trumpism, climate denial, racial oppression, and the fossil fuel industry are well established. The toxic “petro-masculinity” that represents the worst of climate denial was on full display last week at the Capitol. What is consistent about them and their Congressional allies is a willingness to base their arguments and convictions on blatant and conspiratorial falsehoods. If anything, this moment should be a wake-up call to any corporation, and especially those like BlackRock that are supposed to take a longer view. If your political giving continues to prop up the toxic lies that endanger not just our democracy but the safety and security of the American people, you are pouring accelerant on a fire that is getting out of control.
As Judd Legum has pointed out, pausing donations in the short term is really not a big deal. This is a slow time for political giving anyway. A pause in donations now means nothing if it is quietly removed in six months. This isn’t a time to “consider all options.” As Majority Action’s Eli Kasargod-Staub said yesterday, “We’re looking for asset managers to fundamentally cease donations to those who voted against the acceptance of election results.”
We know such displays of decisiveness don’t come easy for BlackRock. But this would be a good moment to start.