More than two dozen fiduciaries of public retirement plans and other public funds called on five of the largest asset managers Wednesday to disclose their own political contributions and how they hold corporate boards accountable for political spending.
The action coordinated by shareholder advocacy organization Majority Action and the Service Employees International Union follows a similar letter sent Jan. 25 to BlackRock Chairman and CEO Laurence D. "Larry" Fink after the events of Jan. 6, including the assault on the U.S. Capitol. The latest letter went to Vanguard, State Street, Fidelity, J.P. Morgan Asset Management and BNY Mellon.
In the letter, the state treasurers and trustees of public pension funds and retirement savings with a collective $1 trillion in assets said the events "add greater urgency to concerns and expectations regarding corporate political spending and lobbying transparency and practices," and said that asset managers should set a leading example.
According to a Majority Action analysis, the six top asset managers that received the letters contributed more than $1 million through their political action committees to members of Congress who opposed the election results after the Capitol insurrection.
In addition, the shareholders are drawing attention to the asset managers' proxy voting records when it comes to companies disclosing their political spending. Majority Action said that five of the six asset managers voted against the majority of shareholder proposals calling for greater lobbying and political spending disclosure at S&P 500 companies that received at least 20% support in the 2020 shareholder season. BlackRock and Vanguard, the two largest asset managers, voted against all of them, according to the analysis.
J.P. Morgan Asset Management declined to comment. Calls to State Street and Fidelity were not immediately returned, while a spokesman at at BNY Mellon said he was looking into it.
Vanguard said in an emailed statement that its political action committee paused political contributions in December and is reevaluating its approach, following what it called "inconceivable events."
On proxy voting, Vanguard said it engages with company boards to encourage "thorough and effective oversight of any political spending and lobbying activity, with careful consideration for alignment with stated business strategy and the long-term risks any activities may present" and that proxy voting proposals on political spending are evaluated case by case.
"Recent events in the U.S. political landscape have raised new questions about the potential risks associated with corporate political activity, and the Vanguard Funds will take that into consideration in our case-by-case analysis, in the same manner in which we integrate other market developments and new data," Vanguard said.