401(k) Specialist Issue 3 - 2018 - 4

EDITOR'S LETTER
Bully for You
DOESN'T MATTER WHO DOES IT, or the target, it's not right.
We recently (and rhetorically) asked if state regulators should be deployed by
politicians of a particular party to discourage financial institutions and investment
managers from engaging with organizations deemed " offensive. "
Gov. Andrew Cuomo's plan in New York prompted the query. We get that politics is
a dirty business, but this one has us wishing for a Silkwood shower scrub.
First flagged by uber-conservative National Review's David French, the Empire
State chief executive is supposedly using the Department of Financial Services to
issue " a combination of consent decrees and warning letters directed at financial
institutions to coerce them into cutting of [sic] business relationships with the National
Rifle Association. "
French says state action of this type is unconstitutional, especially when combined
with statements like the following made by Cuomo in August:
" If I could have put the NRA out of business, I would have done it 20 years ago
...I'm tired of hearing the politicians say, we'll remember them in our thoughts and
prayers. If the NRA goes away, I'll remember the NRA in my thoughts and prayers. "
Clever, French notes, but " there's a difference between 'permissible expressions
of personal opinion and implied threats to employ coercive State power to stifle
protected speech.' "
Here's where it gets particularly interesting-or scary-for the 401(k) and
larger retirement plan industry.
On or about February 25, 2018, Lockton Companies chairman David Lockton
placed a " distraught telephone call to the NRA, " according to a complaint filed by the
Second Amendment advocacy organization.
Lockton had been a close business partner of the NRA for nearly 20 years; " its
commitment to the parties' business relationship had not wavered in connection
with ... any previous wave of public controversy relating to gun control. "
Nonetheless, " although he expressed that Lockton privately wished to continue
doing business with the NRA, the chairman confided that Lockton would need to
'drop' the NRA-entirely-for fear of 'losing [our] license' to do business in New York. "
However one feels about those involved (we're not NRA members), it has broad First
Amendment implications that include, to a lesser extent, the proper role of regulators
in policing the industry. Divest and screen for SRI, ESG or any other sector in keeping
with your values all you want, but it's the forced nature of the action that
has us concerned. Love 'em or hate 'em, if it can happen to the NRA, it can
happen to anyone, and the companies and causes for which they care.
ONLINE
EXTRA
John Sullivan
Editor-in-Chief, 401(k) Specialist
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ISSUE 3 2018 | 401kSpecialist.com
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401(k) Specialist Issue 3 - 2018

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