Larry Fink: Here’s Your Answer to the Despicable Letter from the GOP Attorneys General
I’m sure BlackRock CEO Larry Fink’s response to the obnoxious, accusatory, misleading, letter he received from 19 Republican state attorneys general will be measured, diplomatic, and thoroughly lawyered over. He will hope to mollify them to continue to be able to do business with the government pension funds. That is only right for someone who is in business, with employees, clients, and his own shareholders to consider.
I operate under no such restrictions, and therefore, like Keegan-Michael Key playing the part of Luther, President Obama’s anger translator, I have drafted the letter I wish Mr. Fink could send.
To the Attorneys General:
The letter bearing your signatures but apparently drafted by the corporate donors to the Republican State Attorneys General Fund is such an appalling mixture of political theater and disinformation that I question whether the signers actually read it. I will respond to some of its allegations but I will begin with one key point: it takes a lot of chutzpah for a bunch of elected officials to claim — without any substantiation — that the decisions made by financial professionals are based on politics rather than financial returns when it is you who are urging us to bend our criteria based on your political pandering. We operate under extensive regulatory requirements, including fiduciary obligation, the duties of care and loyalty you refer to, the strictest standard of our legal system. We are also governed by the unforgiving, stringent pressures of competition in the market.
So let me be clear about the answer to all of your charges: Every single decision made by us at BlackRock, from investment criteria to economic forecasts to incentive compensation to the purchase of office supplies is exclusively based on our best assessment of risk and return. That includes doing whatever it takes to create sustainable growth and continue to attract and retain clients.
That is how markets work, and it is my understanding that our economic system and the government that supports it and is sustained by it is based on the idea that, absent externalities and collective choice problems, the best way to maintain robust growth is to allow the market to remain as…