U.S. Senators Kevin Cramer (R-ND) and Martha McSally (R-AZ) wrote a letter to BlackRock CEO Larry Fink today asking him to explain BlackRock’s support for Chinese companies who ignore US financial regulations and the firm’s hostility toward domestic energy producers. The letter comes ahead of Federal Reserve Chairman Jay Powell’s appearance before the Senate Banking Committee tomorrow.
“We are writing to get a better understanding of BlackRock’s investment strategy in the United States and abroad. Specifically, we are interested in discussing what appears to be a double standard in the way your company treats investments in Chinese companies versus American,” the senators wrote. “Given the apparent financial advantages for BlackRock to appease the Chinese Communist Party and fringe environmental activist investors, it is important to examine your firm’s hypocritical approach to investment stewardship.”
The Federal Reserve is using BlackRock to oversee debt-purchasing efforts with programs and funds authorized through the CARES Act. Both Senators Cramer and McSally have expressed concern over BlackRock’s role.
In their letter, the senators highlight a recent joint statement from the Securities and Exchange Commission (SEC) and Public Company Accounting Oversight Board (PCAOB) detailing specific issues related to Chinese companies listed on US stock exchanges. The senators note how BlackRock’s investments in China are concerning and ask the investment company to explain its seemingly hypocritical approach to investment stewardship.