The finance companies allegedly turned a blind eye to human rights abuses
Ranking committee members Mike Gallagher, a Republican of Wisconsin, and Raja Krishnamoorthi, a Democrat from Illinois, notified the firms of the investigation in a letter on Monday (July 31), according to a report by The Wall Street Journal. In the letter, they accused the firms of “exacerbating an already significant national-security threat and undermining American values.”
The lawmakers are probing BlackRock and MSCI’s connections to Chinese companies flagged for violating human rights or working with the Chinese military. The committee reportedly told the firms that a review of their activities revealed investments in more than 60 flagged Chinese companies.
In an emailed statement to Quartz, BlackRock said, “Like many global asset managers, BlackRock offers our clients a number of strategies to invest in or exclude China from their portfolios. The majority of our clients’ investments in China are through index funds, and we are one of 16 asset managers currently offering US index funds investing in Chinese companies. With all investments in China and markets around the world, BlackRock complies with all applicable U.S. government laws. We will continue engaging with the Select Committee directly on the issues raised.”
“BlackRock manages millions of American retirement accounts. Unfortunately, its investing your retirement dollars into dozens of blacklisted China-based companies that pose a security threat to the U.S. I’m on the [Select Committee on the CCP] and we will be working to hold BlackRock accountable.” — South Dakota Rep. Dusty Johnson, confirming the WSJ report on Twitter $TWTR Aug. 1
The House committee investigating the CCP has become more aggressive in recent months, as sanctions from the White House have led to a decline in China-US economic relations.
While the committee does not have the power to hold any company criminally liable, it can subpoena private records and shape public narratives around the subject.
In just the last month, the same committee targeted Ford $F’s new EV battery deal with a Chinese supplier, as well as announced probes into AI-focused venture capital investments in Chinese firms.
Now, the decision to target two major finance companies shows the committee’s broadening scope and the government’s vested interest in revealing exactly where American capital is headed in China.
🇺🇸 Congress is investigating Ford’s new EV battery deal with China
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