Florida fights Wall Street over DeSantis' pension investing policies

Updated on August 19, 2022 15:22 PM by Ella Bina

Florida pension fund managers:

As soon as next week, Florida pension fund managers might be unable to think about how their financial decisions will affect society. This is because Gov. Ron DeSantis is opening a new front in his fight against "woke" people, focusing on Wall Street and corporate CEOs.

In new draught rules posted Monday on the agency's website that manages Florida's pension fund, state investment managers can only consider the risk or return of an investment when making decisions about the state's $200 billion in assets. This is DeSantis's first move against "ideological corporate power." It follows efforts by other GOP state leaders to go after companies involved in politics.

DeSantis has said that financial institutions and business leaders make bad business decisions when they think about systemic racism and economic inequality. This is called "environmental, social, and governance" (ESG) investing. In an episode of Glenn Beck's online show posted on YouTube on Saturday, DeSantis told Beck that he thought the new rules would "make a big splash" when passed.

Also, Europe can't determine whether to punish Russians for Putin's war.

DeSantis’s words:

DeSantis said, "We have a big pension system, and some of these businesses will have to decide whether to go down the ESG rabbit hole or invest with the state of Florida." When DeSantis, Attorney General Ashley Moody, and Chief Financial Officer Jimmy Patronis meet at the State Board of Administration next Tuesday, they are likely to vote on the rules. Moody and Patronis are both Republicans and support DeSantis a lot.

Also read: Pregnancy with Quadruplets leave a couple in shock

President in 2024:

DeSantis, who might run for president in 2024, is now paying attention to the financial industry because it supports what he calls "woke ideology." He had already gone after Disney for being against a bill that would have made it illegal to teach young kids about sexual orientation and gender identity.

He worked to pass a new law that limits how businesses can teach their workers about things like race and privilege. He also signed a bill that says state universities have to do campus-wide surveys to find out if they are biased against conservative ideas.

Since at least May, DeSantis has been giving hints that he wants to take on Wall Street. Two people there told CNN that when DeSantis spoke to the Florida Bankers Association in Tampa that month, he took shots at New York banks, which he said were using their money to influence policy.

DeSantis criticized banks that wouldn't do business with gun makers, and he singled out JPMorgan Chase, which had a table of representatives at the event.

Also read: Top 10 most expensive restaurants in the world

Florida's huge pension fund

DeSantis told the bankers that Florida's huge pension fund could be used as a club against these financial institutions. The most recent monthly report from the State Board of Administration shows that the state is in charge of about $200 billion in retirement funds and another $40 billion in other funds.

The ESG movement is based on the idea that companies should realize they have a role to play in solving problems like climate change and racial inequality, which are becoming bigger problems in the outside world. They say that solving these systemic problems is good for society as a whole and for money in the long run. Larry Fink, CEO of BlackRock, a company that manages $10 trillion, is one of the most well-known people who use it. Fink said in his annual letter to business leaders that companies that follow ESG principles "perform better than their peers" and get a "sustainability premium."

Also read: R. Kelly’s lawyer urges jurors not to consider him a ‘monster’ in the Chicago trial.

Stakeholder capitalism has nothing to do with politics.

Fink wrote, "Stakeholder capitalism has nothing to do with politics." "It is not a political or social plan. It is not 'woke.' It is based on the idea that you and your employees, customers, suppliers, and the communities your business depends on can all help each other. This is what capitalism can do." Florida's new rules don't say that state pension managers can't think about the environment when making investment decisions. This is a key part of the ESG Investing movement, and the new rules don't say they can't. Reports from The New York Times and NPR say that other states, like Texas and West Virginia, want to punish companies that get out of fossil fuels. They want to stop people from moving toward green energy projects and away from oil and coal.

Also, read 10 World's largest Dams You Must Visit At Least Once in Your Lifetime.

ESG movement is getting in the way of the United States:

DeSantis has said that the ESG movement is getting in the way of the United States becoming energy-independent. Still, Florida's proposed rules do not include the punitive measures other states are trying to implement. Instead, the policy says that "social, political, or ideological interests" are things that state investment managers can't consider.

Bryan Griffin, a spokesman for DeSantis, said in a statement to CNN, "Prohibiting pension investments based on political and ideological goals will include ESG-style favoritism towards organizations that use the environment as a cover for their politics." "At the same time, the governor will continue to fight for the environment through state programs like restoring the Everglades, improving water quality, and studying red tide," he said.

Also read: Kazungula Bridge is $260 million and negotiated as Africa's most unusual border crossing!

Tesla CEO Elon Musk:

Under the new policy, pension fund managers would also have to use their voting power as shareholders "solely in the interests of participants and beneficiaries" of the Florida Retirement System. DeSantis criticized Twitter's board earlier this year for trying to stop Tesla CEO Elon Musk from buying the social media website. DeSantis said that the board was not acting in the best interest of shareholders, and he said that the state pension board put pressure on Twitter's board to look at the offer. At a news conference in April, DeSantis said, "If this is politics, you'll have to answer for it."

DeSantis has said that financial institutions put politics ahead of making money. At a press conference in July, DeSantis named big banks that won't do business with GEO Group. This Boca Raton-based private prison company has run detention centers for US Immigration and Customs Enforcement. The CEO of GEO Group, George Zoley, gave $103,000 to DeSantis's first run for governor, and in the past year, the company gave $150,000 to the Republican Party of Florida.

Also read: Enola Holmes 2' First Look Features Millie Bobby Brown And Henry Cavill.

Investment strategies that are good for society and the environment:

"Those activists can't get those policies passed by voting," DeSantis said. "People don't want to get rid of prisons or ICE, and they don't want to stop funding law enforcement. So, they try to do it by sneaking up on some of these companies and kneecapping them."

At a press conference in July, DeSantis suggested teaming up with other conservative states to use their combined shareholder power to eliminate investment strategies that are good for society and the environment. DeSantis said, "What we need to do is get other states that agree with us to use all of our retirement systems' voting rights as a whole." DeSantis also said he plans to introduce legislation that will go after credit card companies, banks, and money transfer services that block access to their services for political or religious reasons.

Also read: Who Is Sean McVay’s Wife? All About Veronika Khomyn

Frozen assets of Moms for Liberty:

DeSantis said that PayPal had frozen the assets of Moms for Liberty, an organization that works to get parents to support conservative education policies. He had also criticized GoFundMe for cutting off money to truck drivers who protested restrictions on coronavirus in Canada. PayPal had cut ties with a crowdfunding site that the Proud Boys and other rioters used before the attack on the US Capitol on January 6, 2021.

A Democrat from Orlando named Anna Eskamani wrote on Twitter that DeSantis was "making companies work with Nazis." Paul Renner, who is expected to be the next House Speaker, said this would be a top priority when lawmakers return to Tallahassee next year. At DeSantis' press conference in July, Renner said, "This is a pocketbook issue, and we won't stop until we start tearing down this dangerous form of ESG."