Asset management giant BlackRock most recently made the news for buying up huge tracts of U.S. housing stock to become, essentially, a massive corporate landlord at the expense of all the rest of us. (Seems like they are learning a thing or two from private equity firm Blackstone, to which they formerly belonged, which is infamous for its predatory and downright evil infiltration of the housing market.)
BlackRock also often makes the news for its climate impact — it’s the world’s largest investor in fossil fuels and forest destruction — or, on a good day, its pathetic and transparent attempts at greenwashing.
But BlackRock is less often in the headlines for its transgression that makes all of the others possible: its cold, calculated, (successful) efforts to infiltrate the ranks of the U.S. government and facilitate a non-stop revolving door.
We’ve written previously about BlackRock’s strategy to insert itself throughout the Biden administration, the successor to its 2016 effort when it looked like CEO Larry Fink had a shot at becoming Hillary Clinton’s Treasury Secretary. Brian Deese, now director of the National Economic Council, was most recently BlackRock’s public spokesperson for greenwashing. He joins other prominent figures like Vice President Kamala Harris’ Chief Economist Mike Pyle, and Deputy Treasury Secretary Wally Adeyemo.
That practice encompasses only one side of the revolving door, however. BlackRock continues to hire personnel directly from the executive branch, with a special (unsurprising) affinity for those experts willing to help the firm skirt regulation. The latest example is Dalia Blass, plucked straight out of the Securities and Exchange Commission (SEC)’s Division of Investment Management, which literally develops regulatory policy for investment companies and investment advisers, to be BlackRock’s Head of External Affairs, where she will be the firm’s top lobbyist, lead the global public policy group, social impact and corporate sustainability teams, and a new group focused on researching stakeholder capitalism, and report directly to Larry Fink. She also has experience at BigLaw firm Ropes & Gray, along with several years prior at the SEC.
Hires like Blass are completely intentional on BlackRock’s part, and they are especially concerning in light of the SEC’s expected release of new climate risk disclosure requirements, likely later this year. BlackRock is preparing to fight, dodge, and greenwash disclosures to the fullest extent possible. They are also undoubtedly continuing their campaign to avoid being designated a Systemically Important Financial Institution (SIFI), which would result in greater oversight and stricter regulations to help preserve financial stability (cue the world’s smallest violin). Who better to assist them in these disgraceful goals than the double whammy of former government employees now on their payroll and former members of their payroll now scattered throughout the government? Further, how many people in career jobs look at Blass and hope to emulate her presumably quite lucrative revolution — and how will those people execute their current jobs in light of coveting her career path?
BlackRock has made a killing off of killing people’s livelihoods, ability to afford housing, and promise of a stable climate in the future, to say nothing of the actual arms manufacturers in which they’ll happily invest your money. They get away with this by exploiting the revolving door, and they do it better than almost anyone else. Larry Fink and his royal band of profiteers know to spread their influence both wide — from the NEC to the VP’s office to the Treasury Department — and deep, encompassing positions within the SEC that most people have never heard of, let alone have the time and energy to understand.
The first step for Biden’s team to resist this influence machine is to understand it. The second step is to propose carrots and sticks that make such rapid revolutions between career and de facto lobbying jobs slower and more rare. The third is to systemically and boldly reject it on behalf of the common good. And in this specific case, SEC Chair Gary Gensler should move quickly to appoint a permanent Director of the Division of Investment Management who will not cater directly to BlackRock or other investment giants.