(The Center Square) – Republicans in the U.S. Senate and House have filed legislation to ban federal employee retirement money from being invested in funds requiring compliance with ESG and DEI policies.

The Stop TSP ESG Act was filed in the Senate by U.S. Sens. Ted Cruz, R-Texas, and Eric Schmitt, R-Missouri. A coalition of Republicans in the House led by Rep. Ken Buck, R-Colorado, filed a companion bill on May 17.

If the bills were to pass, it’s unlikely the president would sign them as his administration is advancing ESG and DEI policies, including a Department of Labor rule change over which 25 states sued, led by Texas.

The rule change prioritizes ESG policies, the department argues, to “remove barriers to plan fiduciaries’ ability to consider climate change and other environmental, social and governance factors when they select investments and exercise shareholder rights.”

State and local governments of New York and California, the two largest Democratic-controlled states, are also advancing ESG and DEI policies, as are companies domiciled in them. In response, 21 attorneys general, led by Utah and Texas, warned investment advisor companies in New York and California that their ESG policies appeared to violate federal and their states’ laws.

Republican members of Congress filing the bills agree with the attorneys general pushing back against Biden administration and Democratic-led states. They filed legislation to prevent companies from using “investment funds held in federal employee retirement accounts from using those holdings to vote in corporate shareholder meetings to force leftist Environmental, Social, Governance (ESG) and Diversity, Equity, and Inclusion (DEI) policies onto private sector businesses.”

They cite BlackRock, a multinational multi-billion dollar hedge fund, as a major culprit advancing ESG and DEI policies when managing several retirement funds held in the federal Thrift Savings Plan (TSP), the federal employee retirement system. They argue BlackRock is controlling the corporate voting decisions of the TSP to direct taxpayer money to “force publicly traded companies to adopt ESG and DEI policies.” By doing so, it’s prioritizing a political agenda over the savings of employees and retirees.

Cruz said the bill will “hold investment fund managers accountable and ensure they do not misuse their position as a fiduciary to advance an agenda contrary to the interests of their investors. As the managing entity of TSP, BlackRock is leveraging the financial weight of the federal retirement system to push their woke ESG and DEI ideology through other peoples’ investments. BlackRock’s manipulation and brazen politicization of federal retirement accounts is wrong and should not be tolerated.”

The bill would prevent the TSP from “contracting out its corporate voting power to woke hedge funds, granting more power to individual investors and less to Silicon Valley,” Buck said.

“For years, BlackRock has been leveraging taxpayer money to force unwilling businesses to accept ESG and DEI policies,” he said in a statement. “Through its position as the manager of the federal Thrift Savings Plan, BlackRock has abused public capital to push a radical agenda and censor conservative media.”

The measure also would empower federal retirees, protect their investments and “enhance the shareholder power of individual investors who would otherwise get outvoted by large institutional investors like BlackRock,” he added.

They filed the bill after state legislatures have also moved to ban ESG and DEI policies in their states. In the second- and third- largest states of Texas and Florida, for example, the governors, comptrollers and legislatures have taken actions to ban the practices. They argue ESG policies jeopardize retirement savings by investing in policies that are anti-American, discriminatory and follow reckless fiduciary practices. They also argue DEI policies are discriminatory and anti-American.

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