Republican lawmakers who railed against “woke capitalism” within the 2022 midterm elections have taken tens of 1000’s of dollars in campaign donations from a few of the same Wall Street money managers they’ve attacked for pushing what the GOP calls “far-left” positions on environmental, social and company governance issues.
Conservative activists have been pressuring Republicans to wield their recent power within the House to dam corporations and executives that use their influence to advertise ESG plans corresponding to clean energy investments or corporate policies that support abortion rights or LGBTQ rights, amongst other issues.
Matt Schlapp, chairman of the influential Conservative Political Motion Conference, called on Republican lawmakers in a September letter to agree not to fulfill with “corporate woke elitist(s)” once they regained control of Congress. Schlapp didn’t return a request for comment.
And the GOP has been blissful to oblige.
Since taking control of the U.S. House, top Republicans have refused meetings with the U.S. Chamber of Commerce and created a working group to “combat the threat to our capital markets posed by those on the far-left pushing environmental, social, and governance (ESG) proposals.” Formed under the House Financial Services Committee, the panel guarantees to rein within the Securities and Exchange Commission and “hold to account market participants who misuse the proxy process or their outsized influence to impose ideological preferences in ways in which circumvent democratic lawmaking.”
“Progressives try to do with American businesses what they already did to our public education system — using our institutions to force their far-left ideology on the American people. Their latest tool in these efforts is environmental, social, and governance proposals,” House Financial Services Chairman Patrick McHenry, R-N.C., said in a Feb. 3 statement announcing the group.
The announcement doesn’t call out private equity or investment banks by name. But Republicans have vilified BlackRock, Vanguard Group and State Street for leading the push on Wall Street to advertise clean energy and what GOP lawmakers often title “left-wing social priorities.”Â
Still, many Republican lawmakers received money from the very firms their party is criticizing. Ten of the 29 Republicans on the Financial Services Committee, including McHenry, took in a combined $140,000 in campaign donations from those three investment firms in the course of the 2022 election cycle, based on Federal Election Commission filings.
McHenry and Rep. Bill Huizenga, R-Mich., who chairs the Financial Services Oversight and Investigations Subcommittee and was tapped to steer the ESG working group, each took $10,000 in the course of the last two-year election cycle from BlackRock’s political motion committee, based on FEC filings. The $10,000 is essentially the most a PAC can legally contribute to a campaign in an election cycle. It was the third election cycle in a row that each lawmakers took donations from the firm’s PAC.
Campaign filings also show that Huizenga and three of the nine members of the working group have recently received donations from the PACs of BlackRock, Vanguard, State Street or Goldman Sachs, all of which supply ESG investment strategies to clients. Two other Republican members of the working group took contributions from leaders of Apollo Global Management and Trian Partners, each of which tout their very own ESG policies.
Apollo Global Management launched a sustainable investing platform that appears to take a position $100 billion in clean energy projects by 2030, based on its 2022 annual ESG report.
BlackRock CEO Larry Fink told Bloomberg at the World Economic Forum in Davos, Switzerland in January that the talk around ESG was getting ugly and the firm was trying to deal with the “misconceptions” around the difficulty.
“It’s hard because it is not business any more, they’re doing it in a private way. And for the primary time in my skilled profession, attacks are actually personal,” Fink said.
Huizenga received an extra:
- $5,000 from the Vanguard Group’s PAC in November
- $3,000 from State Street’s PAC from October 2021 to late March 2022
- $10,000 from Goldman Sachs’ PAC from September 2021 to early November 2022
McHenry took in one other:
- $10,000 from State Street from April 2021 through mid-August 2022
- $5,000 from Vanguard in November 2022
FEC filings show other ESG working group members received donations from the firms they’re expected to be scrutinizing:
- Rep. Andrew Garbarino, R-N.Y., received $5,000 from BlackRock in October and $10,000 from Goldman Sachs’ PAC since November 2021.
- Rep. Bryan Steil, R-Wisc., received $10,000 from BlackRock’s PAC over the course of the 2022 cycle and $10,000 from Goldman Sachs’ PAC since September 2021. Steil’s campaign also received $5,000 from Vanguard and State Street, combined, in the course of the most up-to-date election cycle.
- Rep. Ann Wagner, R-Mo., received $10,000 from BlackRock and a combined $6,500 from Vanguard and State Street within the 2022 cycle.
- Rep. Barry Loudermilk, R-Ga., received $21,700 from executives at Apollo Global Management in the course of the 2022 cycle. The contributions included donations from CEO Marc Rowan.
- Rep. Byron Donalds, R-Fla., received $5,800 in January 2022 from billionaire Nelson Peltz, founding partner at Trian.
Representatives for Garbarino, Steil and Wagner didn’t return a request for comment. Loudermilk’s representative didn’t return a request for comment.
Asked in June before he became chairman of the Financial Services Committee if lawmakers plans to call Fink or other firm CEOs to testify on ESG platforms, McHenry said that “no decision has been made about particular firms being called to testify before the committee.” McHenry’s spokeswoman Laura Peavy told CNBC that the congressman’s June statement “still stands,” and pointed to the working group’s official announcement for more details on the way it plans to operate.
Campaign ethics experts say that the donations bring into query whether there will be any consequences for the businesses in a bigger congressional inquiry into ESG-related practices.
“If these politicians need to successfully investigate these firms and wish to point to how much they disagree with these policies, then possibly they should not be taking money from them,” Robert Maguire, a research director at campaign finance watchdog Residents for Responsibility and Ethics in Washington, told CNBC in a recent interview. “Regardless of the way it shakes out, these firms are going to have more of a say than another American.”
Huizenga’s spokesman Brian Patrick said the donations won’t affect the lawmaker’s position on ESG issues.
“Congressman Huizenga will proceed to face on his stated policy positions and laws regarding the subject of ESG,” Patrick said. Huizenga recently told Bloomberg that he intends to re-introduce bills that may limit BlackRock’s proxy voting power and put restrictions on the Securities and Exchange Commission.
Donalds similarly told CNBC that corporate donations don’t sway his work on Capitol Hill.
“Any notion that I’d alter my stance regarding the harmful impact that ESG proposals have on our financial institutions to cater to donors, lobbyists, or conventional wisdom across the Beltway is silly and demonstrates a lack of know-how of how I handle business,” said Donalds, who also belongs to the conservative House Freedom Caucus.
Will Hild, the chief director of Consumers’ Research, a nonprofit that criticizes ESG practices and firms corresponding to BlackRock, said Republicans will increasingly have a “difficult time squaring receiving support” from lots of these firms. He said he believes the investment firms “clearly have a political agenda with the assets which have been trusted to them.”
Vanguard was the one investment firm mentioned in this text that responded to CNBC’s request for comment.
Vanguard spokesman Netanel Spero told CNBC in an announcement that the corporate “applies a data-driven, nonpartisan approach to public policy, taking a stand for investors by engaging with policymakers to support investors’ interests and strengthen financial markets.”
He also said that Vanguard’s “interests are squarely aligned with empowering on a regular basis investors to achieve their long-term financial goals, and we look ahead to continued constructive dialogue with lawmakers.”
