A Republican lawmaker slammed the response of California's state pension fund as "deeply oblivious," two days after he called for the firing of its chief investment officer over accusations that the fund invested in Chinese companies blacklisted by the U.S. government.
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"This is a deeply oblivious and ignorant response," Rep. Jim Banks told "Mornings with Maria" Friday. "What we know is that CalPERS, the largest state pension fund in America, invests in almost 300 Chinese companies."
In a Wednesday letter addressed to California Gov. Gavin Newsom, Banks alleged California Public Employees' Retirement System (CalPERS) invested in numerous blacklisted Chinese companies that manufacture military products and urged the state to investigate its CIO, Yu Ben Meng.
One of those companies, Banks said, includes Hikvision, which was blacklisted by the Commerce Department in October for "engaging in or enabling activities contrary to the foreign policy interests of the United States."
"Governor Newsom, if it were up to me, I would fire Mr. Meng immediately," Banks wrote in the letter. "At the least, I think a thorough investigation of Mr. Meng's relationship to the Chinese Communist Party and a comparison of CalPERS investments in Chinese companies before and after Mr. Meng's 2008 hiring are both warranted."
CalPERS denied it invests in companies blacklisted by the federal Office of Foreign Asset Control and defended Meng, calling him a "globally-respected financial expert and a proud citizen of the United States."
"CalPERS' investments in Chinese public equity have decreased in recent years to just over one percent of the Fund," the agency told FOX Business. "These are passive investments made through leading independent index providers. Institutional investors and public pension funds across America use index providers."
Last year, Banks introduced a bill in the House that would lock a U.S. government retirement fund from investing in Chinese stocks, after concerns that the investments would undermine national security and fund China's economic growth. The bill would forbid the Federal Retirement Thrift Investment Board (FRTIB) from allowing its funds to be invested in mainland China and Russia.
In September, the companies’ board considered moving the Thrift Savings Plan — a retirement savings plan similar to a 401(k) for federal employees and members of the military — to a benchmark that includes Chinese companies by 2020. A bipartisan group of senators, including Marco Rubio, Mitt Romney and Kirsten Gillibrand, condemned the move at the time.
The MSCI index is one of the world's largest index providers, alongside Nasdaq and the S&P Dow Jones Indices. In 2018, MSCI, the largest index provider in Asia, recorded $835.5 million in index revenue.
FOX Business’ Evie Fordham contributed to this report.