Congress Investigating Whether Woke Activists Broke Federal Tax Law With ESG Investment Schemes

A key congressional committee is now investigating whether a liberal activist scheme to commandeer investment voting shares in Americans' retirement accounts to force corporations to adopt leftist political agendas and bankroll activists violates federal tax laws.

U.S. House Committee on Oversight and Accountability Chairman James Comer (R-Ky.) looking into whether so-called “environmental, social, and governance (ESG) policies and their impact on American businesses, consumers, and the economy” crossed the line from radical activism to illegal activity.

“Recently, blue-state retirement plans' administrators have become aggressive in using the voting rights associated with their participant retirement assets to pursue anti-oil and gas policies, potentially in violation of the IRC's exclusive benefit requirements,” Comer wrote in a letter to IRS Commissioner Daniel Werfel.

The Committee announced Comer “is seeking more information to determine whether ESG related actions by retirement plan administrators violate the ‘exclusive benefit' requirements of the Internal Revenue Code (IRC). In the letter to Werfel, Comer is “requesting information related to state pension fund compliance with the IRC related to ‘exclusive benefit' provisions.”

“To help Americans save for their retirement, Congress has utilized the IRC to incentivize employers to offer employer-sponsored retirement plans and individuals to maximize their opportunities to save in preparation for retirement income. A key tool in this incentive structure are myriad tax code provisions incentivizing employer-sponsored retirement plans. And central to these plans is the deferral of income which allows tax-free growth within a plan, with the income only being taxed only when it is withdrawn through distributions,” Comer wrote.

“A key to these rules is that they are ‘for the exclusive benefit of' the employee. This means an employer surrenders use of the funds contributed to a tax qualified plan, with few limited exceptions. However, recently some state pension funds have acted in ways that clearly are not ‘for the exclusive benefit' of employees, instead using the plans' assets and their associated shareholder voting rights to pursue their own political agenda,” Comer added.

“The House Committee on Oversight and Accountability held a hearing in May 2023 to examine how asset managers and activist shareholders are partnering with liberal advocacy groups to push ESG priorities and a radical political agenda with Americans' money. At the hearing, lawmakers discussed how Democrats' ESG push in the private sector jeopardizes Americans' retirement plans,” the Committee further noted.

The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.

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