South West Illinois News

Former State Sen. Paul Schimpf says the letter sent to a handful of the nation's largest private-sector money managers attempting to get them to stop supporting Republicans is an embarrassment.

“This letter from Treasurer Frerichs is an embarrassment," Schimpf said. "In these trying financial times, he should be worrying about maximizing the rate of return for Illinois investors, not bullying asset managers about their political donations. I expect this type of conduct from an Iraqi despot, not the Treasurer of the State of Illinois.”

Schimpf is currently running for the Republican nomination for governor.

The letter was sent by Illinois Treasurer Michael Frerichs and 29 other state financial officials to six money managers nationwide. It attempted to persuade the managers out of supporting Republican candidates for office. The letters were sent to BlackRock Inc., Vanguard Group JPMorgan Chase & Co., Fidelity Investments, State Street Corp. and Bank of New York Mellon Corp.

"As State Treasurers or as elected fiduciaries and trustees of public funds and retirement savings with assets under management of over $1 trillion, we are frequently asked to evaluate asset allocations to asset managers such as State Street," the letter to State Street Corp. says. "We write to you today in our personal capacity as people affiliated with institutional investors due to our concern with the erosion of political stability in the United States." 

The letters state that a functioning democracy is foundational to a stable economy. They say in the letter that political stability is relied upon to generate consistent investment returns.

"We believe that the events of January 6 add greater urgency to concerns and expectations regarding corporate political spending and lobbying transparency and practices," the letter states. "Accordingly, we join together as fellow capital markets participants to ask how State Street will reform both its own corporate practices as well as its approach to investment stewardship regarding the lack of transparency, alignment, and accountability in portfolio companies at which State Street votes proxies."

The letters state that because 147 Republicans voted against the certification of the presidential election, they are concerned. They suggested that the companies should change their political contributions.

The letters also address campaign donations in general and question reforms that the money managers will undertake to reassess "corporate political spending and evaluate whether payments serve to advance the company’s business objectives and a stable democracy.”