Senator Schmitt Calls on Trump Administration to Investigate Teachers Union’s Woke Investment Practices

U.S. SENATE — Today, U.S. Senator Eric Schmitt (R-MO) wrote to the Department of Labor (DOL) requesting that the Employee Benefits Security Administration (EBSA) initiate an investigation into whether the American Federation of Teachers (AFT) coordinated with any Employee Retirement Income Security Act (ERISA)-covered plans, fiduciaries, investment managers, or proxy-voting to use plan assets or shareholder rights for political or ideological environmental, social, and governance (ESG)-based objectives. “AFT operates through affiliated state and local unions that form constituent parts of the AFT national organization structure. AFT and its affiliates’ membership includes not only public-school teachers, but also private-sector healthcare workers, private higher-education employees, other non-governmental employees, and AFT’s own employees. “Accordingly, many dues-paying AFT members participate in ERISA-covered retirement or employee-benefit plans. So to the extent AFT-affiliated ERISA plans maintain invested assets, those responsible for managing the plans’ assets are subject to ERISA’s duties of prudence and loyalty. Federal law thus prohibits AFT-affiliated plan fiduciaries from violating those duties of loyalty and prudence by subordinating participants’ financial interests to collateral political, social, or ideological objectives. “Yet AFT leadership’s repeated claims that it will leverage plan assets for political purposes suggest it may be coordinating with plan fiduciaries to engage in precisely the type of political and ideological investment activities prohibited by ERISA’s duty of loyalty. For example, AFT’s President Randi Weingarten recently sent a letter to Target Corporation threatening to leverage members’ retirement-fund and benefit-plan holdings to pressure the company into adopting specific political stances. Additionally, members of AFT’s leadership also appear to serve as fiduciaries of ERISA-covered plans, raising concern that AFT leadership has the means to effectuate its stated desire for politicized investment activities. “This potential political weaponization of plan assets puts workers’ retirements and benefits funds at risk and distorts capital markets. And if AFT and plan managers coordinated to take investment activities based on politics and ideology rather than financial considerations, then they may have violated ERISA’s duties of prudence and loyalty. “A Department and EBSA investigation into whether plan managers violated their fiduciary duties to plan beneficiaries by engaging in impermissible political and ideological activism with plan funds is therefore necessary. “I thank both the Department and EBSA for continued engagement on this issue. In accordance with that prior work, I encourage the Department and EBSA to investigate whether plan fiduciaries have breached their duties by coordinating with AFT to subordinate plan beneficiaries’ financial well-being to unrelated political or ideological objectives in their shareholder and investment activities.” wrote Senator Schmitt. Read the full letter HERE. Bac kground: AFT’s President Randi Weingarten sent a letter to Target threatening to leverage the union members’ pension and benefits funds, worth billions and representing over 1.8 million members, to coerce Target into publicly opposing ICE enforcement operations and re-adopting DEI initiatives. ERISA’s fiduciary duty of loyalty requires retirement-and benefits-plan managers to take investment actions solely based on financial and pecuniary considerations to maximize the value of plan assets and secure Americans’ retirements and benefits. Fiduciaries violate that duty of loyalty when they allow non-pecuniary interests, such as political or ideological objectives, to influence their investment activities. ###