Politics has no place in public investments

Politics has no place in public investments

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Management of Minnesota’s public retirement plans is unusual compared to other states because our plans are managed by the Minnesota State Board of Investment (MSBI), a body consisting four statewide political officeholders — the governor, attorney general, secretary of state and state auditor.

Gov. Tim Walz, Attorney General Keith Ellison, Secretary of State Steve Simon and State Auditor Julie Blaha (all Democrats) control the investment decisions regarding more than $100 billion in retirement assets (“Climate change and state investments,” Sept. 13).

Until recently, pension fund management decisions were considered nonpolitical and a fulfillment of fiduciary responsibility. That has now changed.

Decades of history demonstrate that workers and retirees of all demographics succeed when a risk-profit financial performance of a company/potential investment is evaluated based upon market-driven metrics. Despite this reality, members of the MSBI are actively replacing the proven method of growing a retirement nest egg by maximizing return on investment.

Pension plans, 401(k) accounts and other retirement funds are being targeted by Democrats and their friends in large corporations and Wall Street through the promotion of environmental, social and governance (ESG) investing to advance their culture war against individual liberty and free-market competition. Democrats are pushing ESG as the method of quantifying dozens of nonfinancial factors about a business to produce a score demonstrating “social responsibility” based on the organization’s commitment to progressive political and cultural agendas.

Financial institutions and credit-rating firms are assigning ESG scores to businesses. Businesses deemed “not working hard enough” toward progressive social justice causes receive lower ESG scores. To achieve higher ESG scores, businesses are publicly aligning with and promoting progressive causes. Businesses with higher ESG scores in turn are rewarded by receiving more investment dollars redirected by Democrats.

Hardworking Minnesotans have a right to know that Walz, Ellison, Simon and Blaha are playing politics with public retirement dollars by financially rewarding businesses that conform to the progressive agenda. These officials passed resolutions in 2020 to divest of certain coal extraction and production companies and direct public retirement dollars toward firms that “participate in ESG coalitions” such as the United Nations, “engage with corporations on ESG related issues,” and committed to “reducing the MSBI’s investment to long-term carbon risk exposure.”

When the social-engineering investment decisions of Walz, Ellison, Simon and Blaha result in poor return on investment and underfunded pension plans, taxpayers will be financially on the hook to make up the difference.

Politics should never be a consideration of the MSBI, but Democrats are using our retirement money to force progressive social engineering outside of the legislative process to advance Barack Obama’s “fundamental transformation of America.” Democrats and their big-business allies are bypassing constitutional protections, resulting in an existential threat to our freedoms and way of life. Minnesota must end the Democrat-imposed investment social agenda and return to proven investment benchmarks.

Eric Lucero, R-St. Michael, and Mary Franson, R-Alexandria, are members of the Minnesota House.

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