06 Aug 2020 More Transparency for Investment in Communist China
A group of nearly 250 prominent conservatives, former government officials, former military officers and concerned citizens have signed a letter to Secretary of Labor Eugene Scalia, asking that a proposed rule be enhanced to ensure that all assets held by private retirement funds “are fully transparent consistent with the laws of the United States.”
Of particular importance to signers is a concern that investment in “Chinese companies that do not comply with basic transparency standards, and in many cases rely upon child- and slave-labor, is incompatible with fundamental American values and must be discontinued.”
The proposed rule, which the Labor Department finished accepting public comments for on the day the letter was delivered to Secretary Scalia, would require private pension fund managers “to select investments and investment courses of action based solely on financial considerations relevant to the risk-adjusted economic value of a particular investment or investment course of action.”
As the letter points out, the rule is important because it is “reminding pension managers that there is a place for politics and a place for sound investment decisions.” As more financial managers are increasingly pursuing political goals with other peoples’ retirement savings through environmental, social and governance (ESG) investment policies, they are following “unsuitable” strategies that “put politics over fund performance.”
Regarding China specifically, signers explain that the proposed rule for ESG investing “provides the ideal opportunity to exclude non-transparent Chinese assets from inclusion in our nation’s retirement portfolios.” They ask Secretary Scalia to “ensure that fund managers further increase the transparency of their investment choices” and to “require that private retirement investments be transparent, assuring fund managers and their beneficiaries that the companies they are buying are sound.”
This would help overcome problems inherent in an Obama Administration memorandum of understanding from 2013 that gave Chinese companies a waiver from U.S. transparency requirements and allows them to avoid having to meet the same auditing requirements as other companies.
“The effect,” the letter notes, “is to put U.S. retirement investors at great risk.”
The signers urge:
Now is the time to change this, by amending the proposed rule to require specifically that any company that wishes to be eligible for retirement or pension investing meet our nation’s statutory and regulatory standards for transparency.
In addition to Justin and Scott, the letter is signed by leading conservatives including former Reagan Administration Attorney General Edwin Meese III, former Reagan Administration National Security Advisor John Poindexter, American Conservative Union Executive Director Daniel Schneider, Conservative Partnership Institute President Jim DeMint, Americans for Limited Government President Rick Manning, National Legal and Policy Center President Peter Flaherty and American Family Association Director of Governmental Affairs Sandy Rios.
The entire letter, and all of its signers, can be found here.