Texas asks Wall Street firms for details on DEI efforts
(Bloomberg) — Texas and nine other Republican-led states are stepping up pressure on Wall Street’s diversity programs by questioning companies’ policies on hiring and supplier selection as the Trump administration moves into the guts of DEI.
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Texas Attorney General Ken Paxton wrote to the companies on Thursday that they appear to be illegally promoting “non-discriminatory” diversity, equity and inclusion efforts and asked them to respond to a series of questions about their programs. He said the companies may have breached their fiduciary duties by pursuing a “hidden political objective or agenda”.
The letter was sent to Goldman Sachs Group Inc., Morgan Stanley, JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and the fund manager is BlackRock Inc.
“It appears you have accepted quotas based on race and gender and made business and investment decisions based on political agendas rather than maximizing shareholder and asset value,” Paxton said in a letter obtained by Bloomberg.
Paxton gave the companies 45 days to respond to the questions. “Before we take legal action, we are giving each of you an opportunity to avoid a lengthy enforcement action,” he wrote.
The banks and BlackRock did not immediately respond to requests for comment.
The letter came after Trump, on his second day in office, ordered federal contractors to ensure they “do not engage in unlawful discrimination, including unlawful DEI.” It directed government agencies to prepare a list of publicly traded companies.
The CEOs of JPMorgan and Goldman Sachs said they will continue to focus on efforts to promote DEI in their workforces and client locations. “We continue to reach out to the black community, the Hispanic community, the LGBT community, the veterans community,” said JPMorgan’s Jamie Dimon.
They cited commitments and targets to encourage the employment of women and minorities from 2021. For example, JPMorgan has pledged to hire 4,000 black students by 2024 and Goldman has set a goal of spending more than $1 billion on various suppliers.
Corporate America has ramped up its efforts to diversify in the wake of the Met movement and the death of George Floyd in 2020, sparking unrest across the country.