BlackRock Spends Record on US Political Campaigns as ESG Fight Intensifies

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(Bloomberg) -- BlackRock Inc. is pouring record amounts of money into US political campaigns this year as the asset-management giant faces mounting scrutiny over its size and advocacy of sustainable investing.

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The company’s political action committee contributed some $647,000 to congressional candidates, their leadership PACs and political parties between January 2021 and the middle of October, according to the most recent public records before the midterm elections on Nov. 8.

That’s about 38% more than the committee gave in the 2020 election cycle, and slightly more than half the sum, $331,000, has gone to Democrats so far this election.

BlackRock, which managed $7.96 trillion at the end of September, and Chief Executive Officer Larry Fink are at the center of an escalating political battle over investing with environmental, social and governance, or ESG, goals. Republican politicians have attacked ESG for harming fossil-fuel interests and advancing societal causes above financial returns, while some Democrats and environmental advocates have criticized the firm for not doing more to combat climate change.

So far, states including Missouri and Louisiana have pulled more than $1 billion in public money from BlackRock’s funds. New York City Comptroller Brad Lander said in September that the firm “abdicates responsibility” in not pushing corporations to do more to respond to global warming.

The company responded to the various critiques with an advertising campaign earlier this year to explain its business managing money for retirees and brought on additional lobbyists in Texas and Washington to influence policy.

While it’s contributed less money than the PACs of some of Wall Street’s biggest banks, the record giving by BlackRock’s PAC comes ahead of an expected increase in scrutiny in Washington. Republican lawmakers could ramp up oversight of ESG investing if they take control of one or both houses of Congress in the election.

BlackRock is evenly distributing its contributions among both parties because Congress is narrowly divided between them and control of the House is expected to change hands after the November elections, said Craig Holman, a lobbyist at the government watchdog group, Public Citizen. “They’re playing the game well,” he said.

“Engaging with elected officials is an important aspect of explaining BlackRock’s mission and purpose which includes helping millions of Americans retire with dignity,” Brian Beades, a spokesman for the company, said in an emailed statement.

BlackRock executives contribute to the company’s PAC, which then decides which campaigns to support, and they also can contribute to campaigns on their own. Fink, among others, has contributed to campaigns this cycle, including those of Republican Sen. Lisa Murkowski of Alaska and Democratic Sen. Joe Manchin of West Virginia.

The company’s PAC gave $10,000, the maximum, to Senate Majority Leader Charles Schumer of New York and $2,500 to his Republican counterpart Mitch McConnell of Kentucky.

Among House members who got the maximum $10,000 donation were members of leadership like Maryland Democrat Steny Hoyer, the House Majority Leader, and Representative Hakeem Jeffries of New York, the Democratic Caucus Chairman. The PAC also gave $7,500 to House Speaker Nancy Pelosi.

BlackRock’s PAC didn’t donate to House Minority Leader Kevin McCarthy of California or Minority Whip Steve Scalise of Louisiana. Both McCarthy, who is in line to be the next Speaker of the House if the GOP wins the majority, and Scalise were among the 147 Republicans who voted against certifying the 2020 Electoral College results after supporters of former President Donald Trump rioted on Jan. 6, 2021.

Alongside other large financial firms, BlackRock paused political donations in the aftermath.

BlackRock’s PAC also gave to House members who might be committee chairs in January, including Florida Representative Vern Buchanan, who could lead the Ways and Means Committee, and Representative Patrick McHenry of North Carolina, who serves as ranking member of the House Financial Services Committee. Each got $10,000.

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