Documents obtained by The Dallas Express have revealed previously unreported ties between Texas and one of the state’s most embattled corporations.
DX‘s investigation has revealed that many of the state’s two public employee-defined contribution programs are still invested in BlackRock. Furthermore, BlackRock constitutes around a quarter of investments with the state’s Texa$aver 401(K) plan and a fifth of the 457(b) plan investments.
According to the latest documents available, the total value of BlackRock investments in the 401(K) was reported to be over $1 billion, while the 457(b) was reported to be around $750 million for the end of 2023.
The investment program, which is made available to state civil servants, has had investments in BlackRock since at least 2010.
Many sections of the files reveal that the investment plans also have holdings in other corporations like Vanguard, which have been parties to similar legal disputes.
This revelation comes on the heels of the State Board of Education taking moves to cut off BlackRock, as previously reported by The Dallas Express.
The board’s chair recently announced that the state sovereign wealth fund that funds public education in Texas, otherwise known as the Texas Permanent School Fund, would no longer allow BlackRock to manage its assets.
“The Texas Permanent School Fund (PSF) has a fiduciary duty to protect Texas schools by safeguarding and growing the approximately $1 billion in annual oil and gas royalties managed by the Texas General Land Office,” State Board of Education chair Aaron Kinsey said in an official statement.
“Today, PSF leadership delivered an official notice to global asset manager BlackRock terminating its financial management of approximately $8.5 billion in Texas’ assets. Terminating BlackRock’s contract ensures PSF’s full compliance with Texas law,” he added.
Kinsey also took aim at BlackRock’s purported undermining of the PSF and the board’s duty to Texans.
“BlackRock’s dominant and persistent leadership in the ESG movement immeasurably damages our state’s oil & gas economy and the very companies that generate revenues for our PSF. Texas and the PSF have worked hard to grow this fund to build Texas’ schools. BlackRock’s destructive approach toward the energy companies that this state and our world depend on is incompatible with our fiduciary duty to Texans,” Kinsey added.
Previously, the state public school teachers’ pension, the largest in Texas, sold more than $500 million worth of investments in BlackRock over concerns about unlawful discrimination against Texas energy producers under SB 13, per The Dallas Morning News.
SB 13, sometimes called the Investment Protection Act, took effect in 2021. The law forbids public entities like state agencies or municipalities from investing in or having their assets managed by institutions that discriminate against Texas oil and gas producers.
BlackRock had previously been identified in a list by Texas State Comptroller Glenn Hegar as one of 10 firms allegedly violating SB 13.
The company adheres to the environmental, social, and governance (ESG) investment strategy. ESG is a type of political activist investing that tries to create social change as much as it generates profit.
BlackRock had previously signaled an aggressive pivot away from fossil fuels and toward alternative energy sources as part of its Climate Action 100+ agenda, but as The Dallas Express reported, it has since scaled this program back.
Likewise, the company strongly denies discriminating against the Texas energy sector.
“We have never turned our back on Texas oil and gas companies,” BlackRock executive Mark McCombe previously told the Financial Times.
However, energy production is not the only place the multinational corporation has drawn ire for its political activism. BlackRock has also opposed voter ID laws and promoted DEI.
Florida’s chief financial officer led the charge in 2022 against BlackRock because of its ESG policies, reportedly removing more than $2 billion in assets from the company.
Later, when BlackRock laid off hundreds of employees from its ESG division during DeSantis’ presidential bid, the Sunshine State governor posted, “I’m proud to have taken strong action in Florida against Blackrock and the radical ESG agenda.”
“I applaud the State Board of Education for deciding to redirect $8.5 billion of the Permanent School Fund away from BlackRock. Prioritizing investments that align with Texas’s interests, particularly our oil and gas industry, is crucial,” Rep. Nate Schatzline (R-Fort Worth) said about PSF’s divestments before commenting on other state investments in BlackRock. “I encourage other state officials and agencies to follow suit, ensuring our state’s financial resources support our economic backbone and continued energy independence in Texas.”
Gov. Greg Abbott’s office, Attorney General Ken Paxton’s office, BlackRock, and others were reached out to for comment, but The Dallas Express did not hear back before publication.