Bill on Securing America 6/8/22
Frank Gaffney (00:12):
Welcome back. We are visiting next on subjects that are near and dear to both his heart and mine, with one of the former masters of the universe on Wall Street, his name is Bill Walton. He formally was the president and CEO of a big firm on Wall Street by the name Allied Capital. He has gone on to do other things notably in Washington, DC on the Transition Team for President Trump, and also as President of the Council for National Policy, a leading conservative organization, which I’m proud to be a member. He is among other things though, at the moment, a host of his own television podcast show it is the Bill Walton Show. A very important platform, I think, for exposing the subjects that most Americans are not paying nearly enough attention to, and that we must. And one of those was the subject of a program I was pleased to be able to participate in with a longtime friend and colleague Roger Robinson, that aired last week. And Bill, I wanted to catch up with you about that and some of its important findings. Welcome back to Securing America, sir.
Bill Walton (01:24):
Frank, great talking with you.
Frank Gaffney (01:26):
So, Roger, of course was one of those who played in outsized role in helping President Reagan, who I have the privilege of serving as well, develop and execute the strategy for taking down the Soviet Union by basically cutting off its cash flow. He has been championing for some time, among others, with our committee on the present danger China, of which you are an important Member, Bill. The argument that a similar kind of effort needs to be made vis-a-vie communist China, because we are, once again and frankly on a vastly larger scale underwriting, our most dangerous enemy through Wall Street’s financing via American investors primarily.
Frank Gaffney (02:17):
Bill, give us just an overview of the most important takeaways from Roger’s comments on your program, and then we’ll dive down a bit on what’s the state of play at the moment?
Bill Walton (02:29):
Well, you and Roger were terrific. It was a great show and a very distressing topic. And we’ve talked about this in the past few weeks or past few months, but the Federal Retirement Thrift Investment Board, which is a mouthful, has a lot of power. It controls where federal retirees can put their savings dollars and it has options for mutual funds and mutual funds, many of them BlackRock mutual funds our old friend, Larry Fink are offering up portfolios that include many, many, many Chinese companies. And we’ve talked about that in the past, virtually whether directly or indirectly, every Chinese company is controlled by the Chinese Communist Party, and they’re involved in what they call their three warfare, four warfare strategy, basically, whether it’s direct kinetic action or whether it’s disinformation or what have you, the Chinese companies have been-
Frank Gaffney (03:29):
Economic warfare, most especially.
Bill Walton (03:31):
They’ve all been weaponized. So what we’ve been working on, Rogers and you and I have been working with a group of people, Jerry Boykin, General Jerry Boykin among them, is to get the Federal Thrift Investment Board to stop keeping these companies in their portfolios, and to this point they have not. They’ve voted to continue to do it, but the jury’s not out. I mean, we have got plenty of options to keep putting pressure on him and we need to keep doing that to change their portfolio mix.
Frank Gaffney (04:04):
Amen. Bill, you mentioned Larry Fink. He is of course the 800 ton gorilla on Wall Street, I guess one might say, some $10 trillion under management of his firm, BlackRock. He has been a driving force not only behind this idea that we ought to be investing more and more and more of, well, investors’ resources in communist China. But he’s also been championing, ironically, a program that is absolutely at odds with the whole Chinese Communist Party’s agenda, namely, environment, social justice, and governance. And this week he, to my astonishment, announced that, oh no, no, no. I’m not going to be the environmental police. Tell us what that’s about and whether it portends maybe a change on China as well.
Bill Walton (04:59):
Well, Larry Fink has been the poster boy for ESG investing, directing his $10 trillion of Blackstone money to vote in favor of ESG proposals and all the proxies of all the major corporations, BlackRock, State Street, Vanguard, and so forth, they control about 30, 35% of the equity of publicly traded companies. And so they have a lot of clout. Larry had been very public about this, sent very imperious letters to CEOs of all the public companies saying they’ve got to tow the line with ESG and with diversity, equity and inclusion programs. What we’ve done, and you’ve been a big part of it and a lot of us is we’ve begun to single out Larry as the poster boy and applying a little bit of the Solinsky tactics, which is personalizing the issue, making it about a person and we’ve made it about Larry.
Bill Walton (05:57):
Evidently Larry doesn’t like that because at his meeting last week with his investor shareholders, his annual meeting, he walked it back. He said, well, we’re not really doing this. And the only reason we want to do it is because we’ve got this enormous outcry from all our investors to ask us to get into this type investing. Well, last time I checked, there’s not a big up human cry, there’s not a big demand for this type investing. And so Larry’s trying to put it off on market forces and he’s not really the main actor. It remains to be seen. He remains committed to carbon… I can’t remember the exact title for what he’s got, there are so many of them that keep changing. But anyway-
Frank Gaffney (06:45):
I think it’s displacing carbon as a source of fuel [inaudible 00:06:49]-
Bill Walton (06:48):
He wants to shut down fossil fuels.
Frank Gaffney (06:51):
Bill Walton (06:51):
That’s the game. So he’s still all in favor of that, but he does not necessarily want to be the face of it because that’s been a very hot place for him. So it’s a limited victory. It’s a tactical victory but I don’t think a strategic one-
Frank Gaffney (07:06):
Not least Bill, I think it’s fair to say he’s doing an awful lot of damage to shareholder value in this campaign and trying to force all these companies to conform to his program Bill.
Bill Walton (07:20):
I come from the old school of capitalism, I think it’s based on voluntary change among market actors, where people are trying to maximize their resources, their talents to get the highest possible return, a commensurate with the law and morality. That’s capitalism and it’s worked very well bringing billions of people out of poverty, which is something Larry ought to be for. But now we’ve muddled this whole thing up with CRT and ESG and DEI, and you name the acronym. It’s all these things to be social capitalism, which is really a very murky waters, you can’t measure it.
Bill Walton (08:00):
Now, if I’m a CEO of a big company and you tell me, well, gee, we really care about social justice, we don’t care about your profits. Well, that’s great, let’s tie my bonus to social justice and not so much returns. You look at a company like Coca-Cola is my understanding. Well, they’ve been marching this in the social justice parade, their profits have been plummeting. It’ll be interesting to see how this plays out with the board and investors to see whether they couldn’t get back to selling Coca-Cola or water, whatever it is they’re selling and being less involved in Georgia politics.
Frank Gaffney (08:36):
Shareholder capitalism rather than stakeholder capitalism. I think is the bottom line.
Bill Walton (08:41):
Frank Gaffney (08:43):
Bill, let me ask you about one other piece of this. There is evidence now that the Biden team is not only going to ease the tariffs that Donald Trump imposed on the Chinese Communist Party and its companies during his presidency. But he’s also, I’m told, beginning to walk away from an executive order that he promulgated that essentially built on one that Donald Trump had put into place, essentially saying American investors cannot hold the shares of companies that are in China involved in either national security threats or human rights abuses. All of this coming at a time when, as we’ve been talking about Bill, there’s some real reason for concern that the Chinese Communist Party is becoming more and more set on going to war with Taiwan for sure, perhaps with other of our friends and allies and certainly our interests in the Pacific, maybe even with us. I wonder whether given everything that you’ve said is this a time for the president to be suggesting that more money ought to be plowed into China, Larry Fink’s agenda, of course the Chinese Communist Party’s agenda? And if he does do this, are we likely to see just further, well, underwriting of the threat we’re facing from China, perhaps even fueling their war machine?
Bill Walton (10:24):
Well, the answer screams at you, the answer is no. China, let’s set aside for a moment their strategic aims, which is defeat United States and the global regime. But let’s just put it in practical terms, as an investor, my world, China’s become uninvestible. It used to be, there was a Chinese communist party overseeing basically a capital system and then Xi has come in and cracked down on the capitalist part of it and begun much more directional in terms of what it’s doing with Chinese companies. And if you’re an investor, you really have to worry about what the Chinese Communist Party could do the company you’re investing in.
Bill Walton (11:06):
So, A, they’ve got, they’ve got extremely ominous strategic agenda. B, economically it doesn’t make any sense, there’s been very little money made by American investors in China. So there’s that. Then there’s the utter compliancy of their compliance of the Biden administration. There was a moment last month where we had some hope they had a State Department website which somehow removed language that said we do not support Taiwan independence. Well, the Chinese reacted to that very badly-
Frank Gaffney (11:42):
Very badly, Bill, we have to leave it at that. I’m afraid we are hard out of time. This is a topic to which we will return to.
Bill Walton (11:49):
To put it back on the website, Frank, last week, it was back on the website.
Frank Gaffney (11:52):
Back on the website and we’re out of time. I’ll talk with you again soon, we’ll be right back with-