The Daily Signal has previously reported on investment giant BlackRock and its ties to the Chinese Communist Party. But now, at least one state is taking action to distance itself from the China-friendly asset-management company.

Riley Moore, the state treasurer of West Virginia, announced Jan. 17 that his state was cutting ties with BlackRock over its ties to the Chinese Communist Party as well as over its dedication to a goal of net-zero carbon emissions, which would hurt the state’s coal industry. West Virginia is the second-largest producer of coal in the country.

“It’s like we’re paying them with our own money to destroy us,” he says, adding, “We’re going to move in our direction, and … not to continue to do business with firms like BlackRock that obviously have all the worst intentions for our industries here in West Virginia.”

Moore joins the show to discuss what led him to that decision and what other states should be doing about companies such as BlackRock.

We also cover these stories:

  • Supreme Court Justice Stephen Breyer plans to retire at the end of the court’s current term in June.
  • Sen. Patty Murray, D-Wash., calls for President Joe Biden to tap a black woman to replace Breyer.
  • San Jose, California, passes an ordinance requiring gun owners to purchase liability insurance and pay an annual fee.

Listen to the podcast below:

Douglas Blair: Our guest today is Riley Moore, the state treasurer of West Virginia. Riley, welcome to the show.

Riley Moore: Thank you so much for having me.

Blair: It’s a pleasure to have you on. Your state has recently announced that the Board of Treasury Investments will decouple from investing with BlackRock as a result of their connections with the Chinese Communist Party, in addition to their investment strategies that would hurt the coal, oil, and natural gas industries. What finally led you to make this decision after all this time?

Moore: Well, just for your listening audience, to be clear, this is my first year. I’ve just gone through in the State Treasurer’s Office, but this has been going on for a very long time.

And it’s not just BlackRock. We’re being cornered here in the state of West Virginia by many financial institutions, as it relates to the divestment, boycott—whatever [BlackRock CEO] Larry Fink wants to call it—stakeholder capitalism, now woke capitalism, all euphemisms, essentially, for the same thing, but where they are trying to kill our industries, and there’s a very clear conflict of interest here.

Just to be clear, we reap tax revenue from coal and gas. It’s called severance tax. So this is in the hundreds of millions of dollars, which is a significant part of our budget. Then not to mention all of the income tax that we get off of those jobs as well, and sales tax for the equipment, and to have a firm like BlackRock managing those dollars, there is a clear conflict of interest.

It’s like, we’re paying them with our own money to destroy us. That doesn’t make any sense. So we saw clear conflict of interest there in having them, essentially, handle money that’s generated from the fossil fuel industry.

So they’ve stated that they have a net-zero carbon emission goal, and if they certainly don’t seem to care for our industries and want to move in that direction, then we’re going to move in our direction, and that is one that is not to continue to do business with firms like BlackRock, that obviously have all the worst intentions for our industries here in West Virginia.

Blair: Prior to this decision, what was BlackRock doing for the state?

Moore: So, BlackRock, we were in a liquidity fund with them, which was our sweep account. And so the inflow and outflow annually of that account was about $1.5 billion. And that’s what they were handling for the State Treasurer’s Office—which I oversee—all state investments as it relates to taxpayer dollars. The Board of Treasury Investments manages our consolidated fund, which is our general revenue and operating funds for the state, which total about $8 billion.

Blair: You’ve decided to take BlackRock out of the equation. And we were talking a little bit before the show about some of the response to that decision, but what has the response to the decision been amongst the citizenry of West Virginia? What have they been saying about this?

Moore: I’ve not heard one negative thing from citizens in West Virginia. Democrats, Republicans, everybody is happy with this decision.

I even ran into some folks at the UMWA, that’s the United Mine Workers of America, obviously a union, that supported this decision as well. Not saying that’s an official union position, but just some members that I had seen.

So both sides of the aisle, the citizens have certainly supported it. Now, outside of that sphere, there’s been some skepticism. It seems like amongst some of the stakeholders on the outside of that, your third-party groups, and even some elected Democrats and Republicans.

Blair: Has BlackRock responded to this decision?

Moore: BlackRock has not responded to this decision, and [I’m] not sure if we’re going to hear from them or not. But I imagine they’re going to have to respond here at some point, because this is really a national movement that I’ve had the honor of leading.

Flashback to November of last year, I started a coalition of 15 other states that are concerned with this issue, almost all of which are in the energy production spaces we are. And we are all committed now to reforming our contracting process as it relates to our banks that we do business with. Essentially, if they’re going to boycott the fossil fuel industry, we are no longer going to business with them.

And those assets under management in between all of us in that coalition, it was 15 states, by the way, in November, we’re now up to 17, and it’s about $700 billion assets under management in between all of us.

So we are moving in a very aggressive way. We’re moving very swiftly to comport what we feel is our best interest for our states and who we are going to do business with moving forward.

Blair: Has BlackRock responded in any way to that particular move by this series of states? I know they may not have moved on this one, in this particular decision by West Virginia, but have they raised alarm bells about, “Oh, this is more than just one state now”?

Moore: Now, the only thing I’ve seen is some public commentary where they say, “Well, we’re not boycotting the fossil fuel industry,” which to be clear, the boycott in the investment of the fossil fuel industry, yes, that is happening with some of these big banks that are out there in the country.

BlackRock of course is saying something that’s half true, I would say. And that is what they have stated, Larry Fink did in his letter, that essentially they’d like to change these businesses from the inside out.

So they buy up enough shares in one of these coal or gas companies or something like that, and essentially change the business from the inside, where they get them out of the fossil fuel industry and essentially decimate those businesses from the inside.

Now, there’s a huge overarching issue in all of that, and that is energy independence. That’s why part of the things that we’re talking about as a coalition, we need energy independence in this country. Energy dependence makes us weak. It makes us susceptible to foreign entanglements.

And go take a look at what’s happening in Europe right now. They are heavily reliant on Russian gas. And so they are in a very difficult position as it relates to what they want to do over in Ukraine.

Because what did they do? They shuttered a bunch of coal and gas facilities in Europe way too quickly, and the renewable energies, certainly which are not baseload energy, were not able to meet the requirements that they needed. So then they started buying Russian gas.

At the end of the day, baseload energy is coal, gas, and nuclear. That’s it. That is it.

Now, they can try to move in another direction, but that is what’s so scary about what BlackRock is trying to do here, and also these other major financial institutions in the country, because if they get what they want out of this, this net-carbon zero emissions, we’re going to be in a very dangerous place in this country, I believe.

Blair: Now, some might argue that, “Oh, it’s a positive direction. We should be moving in the direction of renewables, like solar, hydroelectric, natural gas, some of these other more renewable forms of energy.” What do you respond to that?

Moore: The renewable forms of energy, which some call sustainable, have shown their inability to sustain. Take a look at Texas, just last winter.

Coal, gas, oil, these are real energy sources for this country. Nuclear is in there as well. And you don’t have to go too far back, 10 years or so, where gas, natural gas, was good. It was a clean energy and coal was bad. Now gas is bad, also. Gas is a bad thing as well.

So you can see where we’re running into this path of no turning back if we keep moving in this direction where it will reach a logical conclusion that’s not going to make sense to the regular Americans out here, but perhaps to the managerial elites out here, which they don’t mind paying more for energy at the end of the day.

And that’s the worst part about it, is who’s going to pay the price is the ratepayer. Your listeners, they’re going to pay the price. Your bills are going to go up.

If you look at any country over in Europe that has gone to renewable—20% or more renewable—you have seen energy costs for the ratepayer in that country go up by at least 100%, if not more. That’s what’s going to happen here. The companies aren’t going to pay, you are going to pay.

Blair: In a press release announcing the decision to decouple from BlackRock, you say, “The state should not do business with firms whose corporate policies directly threaten West Virginians’ interests and livelihoods.” Is that sort of what you were expressing here with that conversation about rising prices and how this would affect the West Virginian payer for these utilities?

Moore: Well, it’s that, and it’s also the jobs. Look, we’re the fifth-largest energy producer in the country. We mine coal, we frack gas. That’s what we do here. And there are tens of thousands of jobs related to that. And by the way, we export a lot of that energy to other states and other countries as well.

So it’s the jobs, and it’s not just the direct coal mining jobs. I’m sure there’s somebody out there listening that’s going to say, “Well, it’s only this many tens of thousands of coal mining jobs.” It’s not just the coal miner. It’s the person who hauls the coal in the truck. It’s the engineer in the railroad. It’s the electrician. It’s all of those things, the secondary and tertiary economic effects that come with a coal mining operation. The same very thing can be said for gas as well.

And for our economy to be able to grow, which we’ve been on an upswing here in West Virginia, companies are coming here because of our cheap, abundant energy that we have to offer them.

Blair: So in terms of the main effects that this decision will have on West Virginia, what is West Virginia going to do now that they’ve decoupled from BlackRock?

Moore: Well, there are a lot of options out there. And I’m not going to get into specific details of actual companies at this point, just due to proprietary sensitivities, and we’ve not made down-selects on every aspect of our contracts that we have out there.

But what I will tell you is that there are a number of fund management firms out there that are coming up with different solutions that are, say, portfolios that are called “X China,” which does not include China in their emerging market funds. There are folks that are not as strident on their [environmental, social, and governance] as BlackRock is. And that is where we are going to go put our money, where they’re not diametrically opposed to our business, our jobs, and our way of life here in West Virginia. And we feel very confident that we’re going to be able to fulfill that requirement.

Blair: One of the things I’d like to follow up on is these financial risks that are connected with businesses that invest heavily in China. You’ve mentioned in this press release announcing the decision that there are financial risks connected specifically with businesses that deal with China, that are heavily invested with China. Can you elaborate on what some of those financial risks are?

Moore: Sure. Look, there is volatility in the Chinese market. We’ve seen that play out now several different times, where [Chinese President] Xi Jinping and the Communist Party there decide they don’t want a certain company listed on the New York Stock Exchange or they don’t don’t want them being involved in certain types of activities that then restrict their ability to be able to grow as a company, which then, obviously, hurts their stock price.

So there is an authoritarian government over there that can put its finger on the scale whenever it wants. It is not the free market over there. And we’re involved in it.

And being heavily involved in a country and invested in a country that is at the whims of essentially one man, you could see how that could go in a very bad direction rather quickly. And we’re looking for something that isn’t as dangerous to be in, in terms of investments, and doesn’t have the potential for as much rise and fall and fluid action there.

Blair: Now, in addition to the financial risks you’ve mentioned in this press release, you also mentioned that there are national security risks that are associated with investing in Chinese firms. Would you be able to elaborate on that a little more?

Moore: Sure, happy to. And look, China, by the way, just to be clear, they’re building 55 brand new coal-fired power plants in China. That doesn’t seem to bother BlackRock or anybody else. Just to be clear. It’s something that I think is so hypocritical, it’s hard to wrap your mind around.

But in any event, it’s been reported BlackRock and some of these other companies are involved with investments in the Chinese military, for instance.

Us doing business over in China, we’ve seen our IP stolen, consistently stolen, specifically as it relates to military hardware and end items that we have decided to manufacture some pieces of theirs specifically in the defense and aerospace industry. They are stealing our IP, our technology.

China is obviously decoupling from the United States, their economy from us, and we should be decoupling from them.

We’re not doing that fast enough. China is decoupling from us at a more rapid rate than we are them. And so we need to come up with a game plan here of how we’re going to start to bring those jobs back to the United States.

China certainly has stated very clearly they do not have the United States’ best intentions in mind. They certainly want to supplant the United States as kind of the hegemonic power in the world, which I think we’ve been a beacon of hope for so many countries around the world for so long, and to continue to do business with a country that is diametrically opposed to us in so many ways, I think is absolutely a national security concern.

Blair: Do you think the average American understands what the stakes are here?

Moore: Well, I think they’re starting to. I think people are starting to. I see a lot of the conversation going on online and around the country, whether it’s on a podcast like this or a cable news network or otherwise. I think the concerns are starting to resonate with people quite a bit more.

I mean, you can flash back to the Cold War with the Soviet Union at the time. And we had a law in place, which still exists right now, called the Arms Export Control Act, for instance. That restricted the type of military products that we would export, into which countries we would export.

Now, why did we do that? Because we wanted to do business with people that were friendly to our country. That makes a heck of a lot of sense. Why we’re not doing something like that now, as it relates to China, I cannot understand whatsoever.

But you think about it domestically, states like West Virginia, this global supply chain that’s been going on here has crushed places like West Virginia, where you have Walmarts come in and essentially crush the small businesses and our towns and communities and all the products happen to be made over in China.

We’ve got to get away from that, because it’s the same exact folks right now that supported that idea, that idea of globalization was going to benefit everybody in the state of West Virginia and many states like ours around the country. It has hurt us.

Now they’ve come back and now they want to take our jobs in great industries like coal mining, where folks are making on average nearly $90,000 a year. So if they take those jobs away, what are we left with? We’re left working at Walmart. That’s not living. That is not living, that’s not having the best interest of the American worker, the American family in mind here.

So at times, it does really feel like sometimes we’re almost indentured to these people in terms of their will and what they want. And that’s why we’re standing up and we’re not going to take it anymore.

Blair: As we begin to wrap-up this interview, I’m curious, do you recommend that other state treasurers across the country take the same action you did with regards to BlackRock?

Moore: Absolutely. I think everybody needs to take a look at it and move in a direction that best fits their state.

BlackRock was very clear in the letter, and there’s one aspect of the letter I’ve not heard everybody talk about that’s really interesting to me, and it was stated, “Capitalism has the power to shape society.”

To me, when you have a $10 trillion company telling you that capital, money, lots of money can shape society, well, what if we don’t want our society to look like what BlackRock thinks society should look like? That’s what we need to be thinking about here. Their [environmental, social, and governance] standards for society are probably quite a bit different than the average American.

Take a look at this. I think everybody should read the letter, digest some of that, but I think everybody around the country, and I know my coalition of now 17 states, we are acutely aware of this and looking at this issue.

And it’s something that we’re going to continue to push back on, not just BlackRock, but other financial institutions around the country that are doing things, by boycotting the fossil fuel industry or otherwise, that are not in our best interests.

Blair: That was Riley Moore, state treasurer for West Virginia. Riley, I really appreciate your time.

Moore: Thanks so much for having me on. Thank you.

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