Gov. Ron DeSantis, Florida Republican, and some of his top allies moved Monday to take control of the state’s huge pension portfolio from private asset managers who invest heavily in Communist China.
At a meeting of the state’s Board of Administration, Mr. DeSantis was joined by the Sunshine State’s chief financial officer Jimmy Patronis and attorney general Ashley Moody in a motion to “revoke all proxy voting authority that has been given to outside fund managers.”
The state officials said the move was needed to ensure that fund managers “act solely in the financial interest of the state’s funds.”
The measure also orders a survey of the Florida Retirement System’s investments “to determine how many assets the state has in Chinese companies.”
The moves come after Consumers Research, a conservative watchdog group, launched a major campaign accusing BlackRock, the world’s largest investment company by assets under management, of close and growing ties with Beijing.
The bond between BlackRock, its chief executive Larry Fink, and China’s Communist leaders has also drawn criticism from supplies at the other end of ideological spectrum as left-wing billionaire George Soros.
In addition to investing clients money in Chinese companies, BlackRock also was awarded a contract to sell mutual funds in China, a venture that has raked in some $1 billion to date, according to published reports.
“I would like the SBA to survey the investments that are currently being done,” Mr. DeSantis said in a statement. “When the legislature comes back they can make statutory changes to say that the Communist Party of China is not a means that we want to be entangled with. I think that that would be something that would be very, very prudent.”
Exact figures for BlackRock’s China investments are difficult to pinpoint, but they are a small portion of the more than $9.6 trillion in assets the firm manages.
BlackRock’s China A Opportunities Fund, which has returned more than 32% since its 2018 inception, has more than $47.4 million, according to its most recent report.
“BlackRock has been using their proxy votes to make difficulty American companies, leading to higher burdens on Americans when we can least provide it,” Consumer Research executive director Will Hild said. “They have used American investment dollars to cozy up to the Chinese Communist Party in a betrayal of our nation that puts American pension dollars at risk.”
BlackRock declined a request for comment from The Washington Times.
Although Mr. Fink is an ardent supporter of green initiatives and BlackRock has tried to force American companies to follow an environmental agenda, China is the world’s biggest producer of greenhouse gasses.
China has also been criticized of numerous human-rights violations from labor camps for its Muslim-minority Uyghur population and stifling Hong Kong’s traditional democracy to silencing and coercing tennis star Peng Shuai over rape charges against a high government official.
There are also national security concerns over investment in Chinese companies, which function with the permission of the Communist leadership and in some situations work closely with the Chinese military.
Published reports show BlackRock has invested in at the minimum two Chinese companies, iFlytek and Hikvision, that have been additional to the U.S. “entity list” as national security and foreign policy threats.
It is not illegal to invest in such companies, although they are banned from trading with U.S. corporations.
Florida’s announcement is the latest in a recent string of state initiatives to signal companies they should focus on business and profits for shareholders instead of a political agenda.
Last month, West Virginia State Treasurer Riley Moore led a coalition of 15 states that warned bankers the states would pull funds if the bankers tried to stifle oil and gas companies to appease environmentalists.
Mr. Moore called that a “push back against woke capitalism.”
Some top Florida officials supported Mr. DeSantis’ concern Monday.
“As Americans got our cheap goods, the Chinese government wasn’t playing by the rules when it came to intellectual character or trade,” said Mr. Patronis, the state’s CFO.
“I take my fiduciary responsibilities seriously and I think the SBA needs to start asking harder questions when it comes to whether investing anymore in China is a good idea. It seems limiting our exposure to China is not only good for our country, but it is the financially prudent thing to do for our state,” he said.
Mr. Patronis’ remarks echoed those sounded by the Securities Exchange Commission and other federal agencies that caution Chinese investments can be unprotected to the whim of Communist leaders and are outside the influence of U.S. or other regulators.
In September, the SEC warned of risks associated with variable interest entities, which are companies listed on U.S. stock market but that are essentially shell companies with no control over the Chinese entities.
Click: See details