Commissioner Christie’s Concurrence in BlackRock’s Authorization to Buy Voting Securities (EC16-77)

Commissioner Mark C. Christie Statement
April 19, 2022
Docket No. EC16-77-002

I concur with the order because it is consistent with the past practices and precedents of this Commission dating back for many years, including BlackRock’s original authorization in 2010.[1] 

While I concur in this order, I emphasize that the protestor, Public Citizen, has raised broad and compelling issues of supreme importance that deserve further scrutiny and review at this Commission.  For example, Public Citizen notes:

In less than a generation, investment managers like BlackRock have come to dominate the financing [of] the architecture of the U.S. economy, as management funds control over $11 trillion in the U.S., exceeding the value of so-called active funds for the first time in history.  Just three companies―BlackRock, Vanguard and State Street―together control 82% of all assets flowing into all investment funds (both active and passive) over the last decade, and command as much as 80% of the global ETF market.  While often erroneously described as “passive”, in actuality they influence and control corporate governance and decision-making.[2]

The claim that huge asset managers such as BlackRock, State Street and Vanguard are merely passive investors in publicly held corporations, investing purely for the benefit of their beneficiaries ― many of whom are retirees receiving pensions ― is no longer credible.  BlackRock, in particular, has been openly aggressive in using its massive financial power to influence corporate policy in areas far attenuated from the legitimate money-management goals of protecting the incomes and investment interests of its beneficiaries.[3]  

The point is not whether one agrees with BlackRock’s public policy positions, or those of Vanguard, State Street or others.  You can even agree with their policy positions and still be deeply concerned about the use of their unprecedented financial power in this way.  The central issue is whether these asset managers use their huge financial power to promote the interests of their beneficiaries or the political and ideological beliefs of their owners and top managers.  You can also be legitimately concerned whether any small group of asset managers should wield this degree of financial power for these ends.

At its broadest, economy-wide level, this is an issue that merits the attention of Congress itself.  With regard to this Commission’s regulation of electric utilities, the important question is whether huge asset managers like BlackRock are able to exert undue pressure on regulated public utilities or their holding companies to engage in practices that may undermine their primary responsibilities of delivering reliable power to consumers at just and reasonable rates.

To reiterate, the protestor, Public Citizen, has raised legitimate questions about the influence of these huge financial asset managers, specifically with regard to their investment positions and resulting influence in public utilities and their holding companies.  While I concur for the reasons noted above, I believe this important issue should be the subject of future scrutiny.

For these reasons, I respectfully concur.