New Report Details How BlackRock Fought Off Government Regulation by Spending Big in Washington
FOR IMMEDIATE RELEASE: September 5, 2019
Contact: Bryan Dewan, email@example.com, 202.780.5750
WASHINGTON, D.C. – Today, Campaign for Accountability (CfA), a nonprofit watchdog group, which runs the BlackRock Transparency Project, released a new report, BlackRock’s Washington Playbook, which details how BlackRock, the world’s largest asset manager, implemented a strategy of lobbying, campaign contributions, and revolving door hires to fight off government regulation and establish itself as one of the most powerful financial companies in the world.
CfA Executive Director Daniel E. Stevens said, “BlackRock has more assets under management than the entire hedge fund industry but has nevertheless successfully evaded the ‘Too Big to Fail’ label. The report shows how BlackRock has employed a multifaceted strategy to influence Washington power brokers and protect its business model despite the risk to the public.”
CfA’s report details BlackRock’s sizable campaign contributions and lobbying expenditures, which have increased substantially during the last ten years. For instance, BlackRock contributed just $241,600 to all federal candidates during the 2006 election cycle, but during the 2018 cycle, BlackRock contributed more than $1.5 million to federal candidates. BlackRock’s sharp increase in campaign contributions is mirrored by its increased lobbying spending. BlackRock did not report any federal lobbying expenditures from 2005 to 2008, but now the firm routinely spends more than $2 million a year on federal lobbying.
BlackRock’s increased political spending coincided with the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act as well as its successful effort to avoid being designated a Systemically Important Financial Institution (SIFI), more commonly known as “Too Big to Fail.”
BlackRock’s political spending appears to have rewarded pliant public officials in some instances. For example, in September 2013, the Office of Financial Research (OFR) at the Treasury Department issued a report warning that asset managers like BlackRock pose a systemic risk to the financial system. In the month before and the month after OFR released the report, BlackRock executives and its political action committee contributed more than $46,000 to Sen. Mark Warner (D-VA)’s campaign committee. Two months after the report was released, the Financial Timesreported Sen. Warner had jumped to BlackRock’s defense, writing that he planned to question Treasury officials about the report.
CfA’s report also details how BlackRock has gained access to top government officials in the Trump administration. For example, BlackRock CEO Larry Fink served on one of President Trump’s now-disbanded CEO business councils. Additionally, former BlackRock executive Craig Phillips, who had been a Hillary Clinton supporter, was named a senior aide to Treasury Secretary Steve Mnuchin after donating $100,000 to President Trump’s inaugural committee.
Notably, although Fink is known for calling for corporate social responsibility, BlackRock has been unwilling to disclose the extent of its political spending, defeating a 2017 shareholder resolution calling for disclosure of political activities. Additionally, the CPA-Zicklin Index of Corporate Political Disclosure and Accountability, an annual survey of the how S&P 500 companies disclose their lobbying and political spending, has relegated BlackRock to the suboptimal second tier category of corporate disclosure.
Mr. Stevens continued, “BlackRock is a corporate epitome of the axiom ‘Do as I say, not as I do.’ The company wields enormous influence over the global economy yet works to evade significant government supervision and refuses to disclose the extent of its political activities. The public should be concerned about whether policymakers are kowtowing to BlackRock and failing to hold the world’s largest shadow bank accountable.”
Campaign for Accountability is a nonpartisan, nonprofit watchdog organization that uses research, litigation, and aggressive communications to expose misconduct and malfeasance in public life and hold those who act at the expense of the public good accountable for their actions.