In response to the Capitol riot, new legislation proposed by New York Assembly members Ron Kim and socialist Zohran Mamdani would divest public money from firms whose executives bankroll shadowy far-right groups.
Amid intensifying questions about who funded the insurrection at the US Capitol, public officials have started pressuring corporations to more thoroughly disclose their spending on shadowy political groups. Now, two New York lawmakers are upping the ante — they are preparing to introduce legislation designed to block billions of dollars of public money from continuing to flow to companies and financial firms whose corporate treasuries and senior executives bankroll dark money groups.
The bill is being finalized by Democratic assemblymen Ron Kim and Zohran Mamdani and follows reporting by the Daily Poster finding that New York City and State pension funds have invested public employees’ retirement savings with financial firms whose executives have been big donors to super PACs supporting federal lawmakers who voted to overturn the 2020 presidential election results.
The new legislation could become a template for other states — through its massive city and state pension funds, New York oversees hundreds of billions of dollars of public investments and has the market power to help shape national standards in divestment practices.
While many companies have announced they are suspending their relatively small political action committee contributions to lawmakers who supported the January 6 insurrection, few have committed to restricting their executives from making substantially larger donations to the super PACs that actually bankroll the GOP.
Kim and Mamdani wrote a letter to the New York City comptroller and state treasurer last month, demanding that they “conduct a thorough analysis of public money that is invested in entities engaging in anti-democratic activities.” The letter specifically targeted Blackstone, whose CEO Stephen Schwarzman donated more than $40 million to GOP super PACs during the 2020 election cycle.
Schwarzman was former president Donald Trump’s top booster on Wall Street. The billionaire reportedly told prominent business executives after the election that Trump had a right to challenge the election results, and also “took issue with suggestions made during the meeting that the US could be on the verge of a coup,” according to the Financial Times. Schwarzman ultimately changed his tune and went on to call the insurrection at the Capitol “appalling and an affront to the democratic values we hold dear as Americans.”
The New York City and New York State public employee pension funds have over $978 million and about $3.3 billion in funds linked to the Blackstone Group, respectively, according to Kim’s letter. State comptroller Thomas DiNapoli’s office told the Daily Poster, in response to the letter, that “the fund does not, and will not, make investment decisions based on political viewpoints.”
Kim’s new bill would require financial firms that receive New York investments to pledge that they will not make any direct corporate contributions to super PACs or 501(c)(4) dark money nonprofits. Further, firms would have to pledge that their senior executives will not make any individual contributions exceeding $10,000 to super PACs or dark money groups. Senior executives would have to disclose any super PAC or dark money donations they make to the state office overseeing the fund.
Pension officials in other states are now pressuring the firms they are invested in to similarly disclose political contributions to reduce reputational risk, but the New York bill appears to be among the first legislative attempts to statutorily require divestment from corporations that hide their political spending.
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This post was originally published on Jacobin.
