Talks with Authors: The Dictatorship of Woke Capital

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Please join us for the latest installment in our Talks with Authors Series, in which author Stephen Soukup sits down for an interview with Eileen O’Connor about his book The Dictatorship of Woke Capital.  Perhaps you recall learning that the obligation of a corporation is to maximize profits, thus preserving and increasing shareholder value.  Perhaps you even thought that was still a top priority of corporate executives.  But more likely, if you hadn’t been aware of it already, it came to your attention during the last year or two that corporations were inserting themselves into public policy debates, and making decisions about where and how to operate based on considerations far removed from their businesses.  In The Dictatorship of Woke Capital, Stephen Soukup describes how the focus of corporate attention went from shareholder value to woke capital.  He takes us step by step through the evolution, from its beginning.  He identifies the people and groups who have played and continue to play a major role in the development of woke capital.  Published by Encounter Books, The Dictatorship of Woke Capital is available at its website, as well as Scribd, Amazon, and wherever books are sold.


Stephen Soukup, Author, The Dictatorship of Woke Capital: How Political Correctness Captured Big Business 

Interviewer: Hon. Eileen J. O'Connor, Law Office of Eileen J. O'Connor PLLC 


To register, click the link above. 


As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker.

Event Transcript



Dean Reuter:  Welcome to Teleforum, a podcast of The Federalist Society's practice groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of practice group Teleforum calls, become a Federalist Society member today at



Evelyn Hildebrand:  Welcome to The Federalist Society's virtual event. This afternoon, December 9th, we are hosting another webinar in our Talks with Authors series. This time we'll discuss The Dictatorship of Woke Capital by Stephen Soukup. My name is Evelyn Hildebrand, and I'm an Associate Director of Practice Groups at The Federalist Society. As always, please note that all expressions of opinion are those the experts on today's call.


      Today we are fortunate to be joined by the Honorable Eileen J. O'Connor who will interview our speaker this afternoon. To introduce Lee very briefly, she is currently in private practice at the Law Office of Eileen J. O'Connor. She's the Chairman of The Federalist Society's Administrative Law and Practice Group Executive Committee, and she formally worked at the DOJ as the Assistant Attorney General for the Tax Division. So we're very pleased that Lee and Stephen Soukup are able to join us this afternoon.


      After our speaker gives the opening remarks, we will turn to moderated discussion and then audience questions. If you have a question, please enter it into the Q& A feature at the bottom of your screen. And we will handle questions as can towards the end of this afternoon's program.


      With that, thank you for being with us today. Lee, the floor is yours.


Hon. Eileen J. O'Connor:  Thank you, Evelyn. More often than I care to admit, I'll buy a book, read it, and then regret having paid for it, concluding that its contents could have been contained in a well-written essay. That is not at all the case with this book. The Dictatorship of Woke Capital is so packed with really interesting, relevant, and important information and so logically organized as to be well worth all the time you spend reading it. In fact, I've gone back and re-read many parts of it and will continue to do so.


      The challenge of today's interview is to select from this fact intensive book just the few topics we can discuss in our limited time. As we wrote in the description introducing this interview, perhaps you recall learning that the obligation of a corporation is to maximize profits, thus preserving and increasing shareholder value. Perhaps you even thought that was still a top priority of corporate executives. But more likely, if you haven't been aware of it already, it came to your attention during the last year or two that corporations were inserting themselves in the public policy debates and making decisions about where and how to operate based on considerations far removed from their businesses.


      Major league baseball, for example, moved its all-star game out of Atlanta to protest Georgia's enactment of laws designed to protect legal votes and prevent illegal ones. Disney and other entertainment giants moved operations out of Georgia to punish Georgia for enacting laws to protect the lives of human beings with a detectible heartbeat. There are just two of the events that might have caught your attention and made you realize corporations were not politically neutral.


      The next paragraph is excerpted from the work of another writer. "Some businessmen believe they are defending free enterprise when they declaim that business is not concerned merely with profit but also with promoting desirable social ends. If business has a social conscious and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution, and whatever else maybe the catchwords of the contemporary crop of reformers, in fact, they are or would be, if they or anyone else took them seriously, preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of the free society these past decades."


      The writer of that paragraph is Milton Friedman, the date, September 1970. In The Dictatorship of Woke Capital, Stephen Soukup describes how the focus of corporate attention went from shareholder value to the woke capital. He takes us step by step through the evolution from its beginning which as you can see, from Milton Friedman's statement I just read, had as of 1970 already persisted for decades. Mr. Soukup identifies the people and groups who have played and continue to play a major role in the development of woke capital.


      Finally, from the end of the first chapter of the book we're talking about today, "The transformation of Wall Street has been a product of a long careful process, a march through various other institutions, turning them on their heads until the titans of capitalism had been fully convinced that their surrender to the culture was not merely inevitable but constituted the only morally legitimate path.


      Thank you so much for being with us today, Steve. Before we --


Stephen Soukup:  - Thank you very much for having me. I appreciate it.


Hon. Eileen J. O'Connor:  Before we dive into the content of your book, could you tell us about your background and how you came to be knowledgeable on this subject?


Stephen Soukup:  Well, I started working in the financial services industry just over 25 years ago. Fresh out of graduate school, I took a job at the Washington research office of Prudential Securities where I was an associate analyst to a man named Mark Melcher, who had made a reputation not only as the godfather of Washington research for Wall Street but as, what they called him at the time, Wall Street's philosopher.


      He took history, philosophy, sociology, even poetry and incorporated into his analysis, trying to explain to people interested in the markets what was happening in Washington, what was happening in the rest of the world, and how it might affect their investments going forward. I started as his associate analyst and learned a great deal from him.


      Unfortunately, after covering the Clinton Administration and what we saw as the unnecessary and undesirable collusion between the financial markets and politics during the administration that is primarily found in the person of Robert Rubin who was at the time Treasury Secretary and is former co-CEO of Goldman Sachs, we spent a great deal of time warning about how political influence on capital markets could be destructive.


      At the end of the 1990s we found ourselves in the unenviable position of being in opposition to the CEO of our parent company who was very friendly with people in the Clinton Administration, and because he was the CEO and we were just Washington analysts, we ended up out on the streets.


      We spent a couple of years at Leman Brothers where we tried again to tell the truth to our clients without being influenced by outside forces. Unfortunately the outside forces at Leman Brothers were inside forces. They were our bankers, and they didn't much care for what we had to say about the risks the People's Republic of China posed to capital markets, risks that I think that we're seeing today.


      So within a couple of years, we started our own independent research company. It's called the Political Forum, and it's free from any sort of external influence. There's no investment banking. There's no compliance officers. It's just us, telling the truth to our clients, to our readers, about what we think is important in politics and in the society generally and why it matters to capital markets.


      Over the course of the last 18, 19 years, it's become clear to me that this issue that we spotted in the late 1990s, the influence of politics on capital markets, it is more and more an issue for capital market generally and for American business. It's become one of the most important issues, I think, for our society and especially for our economy.


Hon. Eileen J. O'Connor:  So this is something you've been observing for many years. Was there a final straw that caused you to start putting pen to paper?


Stephen Soukup:  Well, 2019 was very much a watershed year in politics and capital markets. The overt attempts by the entertainment industry to influence political outcomes in the State of Georgia by threatening jobs of ordinary Georgians, by trying to coerce the governor of Georgia, Brian Kemp, to adhere to their wishes rather than the will of the people whom he served really sort of struck a note with me. And through conversations with some other people who were involved in the politicization of capital markets or involved in pushback against it, I became aware of just how deeply and broadly politics had come to play a role in the business that I'd been in for 25 years.


Hon. Eileen J. O'Connor:  It's hard to know -- as I said, your book is just so chock full of so many facts. Part one, you asked a question that struck me when I first began to notice what was going on was how did we get here? Can you start with -- I guess you start with socially responsible investing?


Stephen Soukup:  Well, there are several different streams in the history of how we got here. I start the book more generally in 1876 at Johns Hopkins University where a man named Richard Ely is a professor of political economics, and his graduate student Woodrow Wilson is working with him in developing a grander theory of political economics. What the two of them eventually become are the godfathers of American progressivism and the godfathers of American public administration.


      And in the context of woke capital context of my book, what Ely and Wilson did was to develop and then to reinforce this notion that the American people are simply too stupid, too ignorant, and too selfish to govern themselves when it comes to important issues that only the experts can know about. And so the development of American public administration and the development of this idea that sometimes government has to move beyond the masses, move beyond the voters to get what it wants, it is definitely something that influences progressive politics, progressive investing, and woke capital today.


Hon. Eileen J. O'Connor:  Politics by other means. You mention in your book the fact that much of this was going on stealthily and surreptitiously for many, many years. And then at some point, the people who wanted corporations to become what we're calling woke, began to feel that they no longer needed to be stealthy or surreptitious about it.


Stephen Soukup:  You mention in your last question socially responsible investing. As it turns out, at Prudential Securities, I was there at the inception of socially responsible investing as we understand it today. We had an organization at Prudential in our office that was called the Social Investment Research Service. It was the first major firm, socially responsible investing service. And what it did was it screened companies for clients, left-wing clients, right-wing clients, middle of the road clients, religious clients, anybody who was interested in having their values reflected in their investments was a client. That could be the Little Sisters of the Poor, it could be the United Wildlife Fund, anybody who was interested in having their investments meet with their values.


      The thing about socially responsible investing at the time was that it was perfectly voluntary. There was a tacit agreement that you would give up a certain percentage of your return on investment in order to do -- to sleep at night, to get your values and your investments lined up. Nobody fought it. It was not necessarily ideological. It was just something that people -- it was a service that we offered and that people were able to take advantage of.


      In about 2004 and 2005 the United Nations got involved with its directives on investment and directives on sustainability with respect to climate change. And this essentially changed the face of socially responsible investing. Socially responsible investing, which was, as I said, a voluntary, non-ideological proposition, morphed into what we know today as ESG, Environmental, Social, and Governance Investing, which differs in that it's coercive and that is very ideologically tinged. It is very left-leaning. It is very dedicated to the principles of sustainability with respect to climate change. It is very interesting in diversity, equity, and inclusion, however companies choose to define those. And it is very aggressively concerned about changing the behavior of companies rather than simply divesting from them.


      This basically began, as I say, in 2004, 2005, and nobody paid any attention to it for probably the first decade. It wasn't until about 2015 that conservatives started to realize that something was going on, that the left had built this massive organization with massive capitalization to advance its political agenda through the capital markets. And even then, it didn’t strike home until about 2019 when, as I mentioned before, the entertainment companies and the State of Georgia or the Governor of Georgia got into a bit of a tussle over abortion, when people started to realize that these corporations were in fact serious about being woke and serious about imposing their political beliefs on voters.


Hon. Eileen J. O'Connor:  And this isn't just a matter of you or me going out and buying some stock. We're talking about trillions of dollars that are being managed by -- there are two groups I'd like you to talk about. One is Vanguard, State Street, and BlackRock and then Union and other pension funds like CalPERS and such and the fact that they have the trillions of dollars that they control and what they do with it.


Stephen Soukup:  Right. When I say that ESG is coercive, what I mean by that is that the companies or the asset management firms that hold the stocks that they find to be bad actors will use the proxy system and the annual shareholder meetings to try and force corporations to change their behavior, either by subverting the management or changing boards' directors or changing the bylaws of the company through shareholder proposals. So this is a very aggressive type of asset management. It is very activist. It is very interested in changing corporate behavior rather than simply moving past corporations with which these investors disagree.


      BlackRock is the largest asset management firm in the world. I think in the book I refer to them as having about $7 trillion in assets under management. That's increased almost by 50 percent now. They're now about $10 trillion in assets, I bet you. If you take into account Vanguard and State Street, which together the three of them comprise the big three in passive asset management, they have nearly $25 trillion in assets under management. So they have a huge amount of money.


      And the way that they manage this money is much the same way in which CalPERS and some of the other pension funds manage money is that they take this money on behalf of the owners of their funds, and they diversity it and invest it and try to make the greatest return within the scope of their political beliefs. The thing about that is that in taking this money and investing it to advance their particular agenda, they are usurping the shareholder rights of the people who actually own the funds. If you have a 401(k), if you have an IRA, if you happen to be a pensioner, a fireman or policeman in California, they are taking your money, your retirement funds and they're leveraging it for their own personal political benefits. They take your money. They take your shareholder rights. And they use it to advance their political agenda.


      That's probably the most frustrating and significant issue about this is that when people talk about Larry Fink the CEO of BlackRock having $10 trillion to push companies around, it's not Larry Fink's $10 trillion. It's your $10 trillion. It's my $10 trillion. It's the policeman and the fireman in California. It's mom and pop who run the local store who have their IRAs invested with BlackRock. That's the problem, that they're using our money to advance their agenda.


Hon. Eileen J. O'Connor:  And in fact, three presidents in a row have issued orders and had the Department of Labor issue regulations about how fiduciaries of these retirement plans ought to invest them. Obama said ESG; Trump said shareholder value; and then Biden came in and undid Trump's executive order.


Stephen Soukup:  Yeah. The fight over the labor department rule with respect to ERISA which is the Employee Retirement Income Security Act of 1974 has been very interesting. Obama opened up ESG funds to retirement asset managers. He said you can consider ESG as possible investments. He didn't go much beyond that though. President Trump and especially Secretary of Labor Eugene Scalia pushed to reverse that. It was their belief that considering ESG as a primary investment consideration was a violation of fiduciary duty. The Fiduciary duty to retirees in particular is to make as much money for them to have in their retirement as possible. By introducing ESG into the equation, they believed that the Obama Administration had reduced the ability of these managers to distinguish between what is and what is not fiduciarily responsible.


      Now, the interesting thing about what Secretary Scalia did -- you know, I don't have to tell The Federalist Society how brilliant people with the last name Scalia are. But he was -- the rule that he wrote and that they enacted was very, very well done, and it was very well written. If you look at the media, they'll tell you that it was done hastily, but that's not true. What the Labor Department did, what Scalia did was to say that ESG could be considered all other things being equal. You do not have to rule out ESG. ESG can be a part of your investments for retirement if you can demonstrate that it's material to the investment. If you can show that how a company is planning for a net zero carbon future, then it can be a legitimate investment. They did not ban ESG like the media says. They did not throw ESG out the door. They said you simply have to prove how it's material.


      Unfortunately for the ESG investments, that's the part that got them. They don't want to have to prove why it's material. They don't want to have to prove why their investment strategies, taking into account sustainability and diversity and equity and all of that, are better at producing returns than simple financial fiduciary investing. And so what they did was the lobbied the Biden Administration to reverse this rule, and the Biden administration did this. And the thing about it is the Biden -- by doing so, the Biden Administration, number one, did something that was completely unnecessary because as I say ESG was still a part of potential investments under the Trump's earlier rule.


      The other thing that they did was the tacitly created a new standard of materiality. No longer is financial pecuniary and materiality the sole substance on which companies should be judged by fiduciaries. Now we have a secondary materiality standard, and that's going to bleed over into the SEC when it issues its rules on disclosure next year. And it's essentially changing the standard that has been in place since 1947, making environmental issues and social issues equally important as pecuniary performance of a company, which essentially puts not just corporations but all investors in our economic system, frankly, at risk.


Hon. Eileen J. O'Connor:  You mentioned materiality which makes me think of accounting which reminds me of the Financial Accounting Standards Board. And there's a new accounting standards board. And can you tell us a little bit about that and what the status is?


Stephen Soukup:  Well, you're talking about SASB, I assume, which is the Sustainability Accounting Standard Board, which is essentially a product of Bloomberg Incorporated. Michael Bloomberg put up the money to create it. Michael Bloomberg served on the board of directors. Michael Bloomberg, Michael Bloomberg, Michael Bloomberg. He was the one who guided their policies. He's the one who made sure that this was a going cause.


      Last year about this time, actually it was November, I believe, SASB merged with another domestic firm that was interested in creating standards of disclosure for sustainability and diversity and equity and all of the other ESG functions. And then this year, just about a month ago, at COP26 in Glasgow, the American version which was essentially SASB and the European version of these standards creators formed a new organization which is now the to be the global standards provider for all of ESG. The intention is to create these standards that are aligned in every country, all 122 countries who signed the agreement. So now American companies are supposed to be able to disclose precisely what British companies are or what German companies are or what Chinese companies are.


      The catch of course is that there's no audit mechanism. Just as with financial audits, there's no audit mechanism in China, so what they tell you is real is not necessarily real. So now we're all abiding by standards except the people who wish to simply give lip service to the standards.


Hon. Eileen J. O'Connor:  Is the SEC buying into this at all?


Stephen Soukup:  The SEC is buying into it hook, line, and sinker. The SEC, starting this spring under Acting Chairman Herren Lee, the SEC began pushing very hard for new disclosure standards. The conservatives on the SEC, Hester Pierce in particular, were very vocal and very public about their objections to these standards, claiming, A, that the investors that the left wants to protect are institutional investors. They're not mom and pop. They're not average, everyday investors. They're the large institutional investors who have a great amount of wealth and can push other people in business, in government, etc., around. And she made it clear that this would be changing materiality standards, and she's been absolutely right.


      Fortunately, the new standards for disclosure have been delayed several times, in large part, I think, because Hester Pierce has put up quite a fight. But this is something that will be done next year, and it will mark the official and inarguable politicization of the SEC which, along with the Federal Reserve, had been, prior to this administration, the sacrosanct financial bureaucracy that was not to be politicized. And everybody up to now abided by that, and that's going away. And it's clearly going to be something that is not a part of this administration's plans. Politicizing the SEC and then politicizing the Fed I think are well within the scope of what they want to accomplish.


Hon. Eileen J. O'Connor:  One of the things that you do in your book is you identify the players. You've got a 40-page chapter of the players on the left and a 10-page chapter of the players on the right. And I'll mention just a couple of those. Well, Larry Fink sort of woke up a lot of people when he came right out in a letter to clients, and there was a response to that by Mr. Sokol. Could you talk about those two sets of players and those two people in particular?


Stephen Soukup:  Well, the discrepancy between the power organization and capital on the left and the right is not adequately reflected in the length of the chapters. The 40 pages for the players on the left versus the 10 on the players on the right makes the players on the right seem much stronger than they are. In truth, they're a hundred times better capitalized, a hundred times better organized, and several hundred times better prepared for this battle.


      Larry Fink has -- it's his tradition to send a letter to all his clients and to the CEOs of all the companies they own, that they hold --


Hon. Eileen J. O'Connor:  [Crosstalk 00:27:25] BlackRock.


Stephen Soukup:  I'm sorry? Yes. CEOs -- every late January, early February. In, I believe, 2019, 2020 he started talking about how sustainability was going to be a big issue for BlackRock moving forward, that they would be looking for investments in companies that were planning for a net zero future, were planning for the transition from fossil fuels to alternative fuels, and how well they were doing along those those, that those would be companies that they would be particularly interested in.


      In his 2021 letter, he took it one step further saying that sustainability, diversity, etc. would be the primary investment considerations for BlackRock going forward, which is to say that if you have a BlackRock fund and it's not an ESG fund, it really doesn't matter because they're still going to use your shareholder votes to vote for ESG guided resolutions. That's what he said very clearly, very unambiguously, that this was something that he wanted to do and that the entire firm would be guided by this.


      He is probably -- Larry Fink is probably the most vocal. Certainly, he is the most aggressive member of the ESG woke capital, sustainability investment group. He's someone who very, very badly wants to be famous, and he's something that I think we should make famous specifically because of these policies and the way in which they contradict the will of the people. But he's not alone. Everybody in the large asset management firms around the country, and especially State Street and Vanguard, the other two of the big three, are pushing in the same direction.


      So now we have in a sense a collusion between these three firms that hold in the neighborhood of  22 to 28 percent of every single S&P company between the three of them all pushing in the same direction. They all have the same investment protocols. They all have the same investment guides, and they're all pushing left-winged political agenda on American corporations. That's a significant chunk.


      Justin Danhof, who runs the Free Enterprise Project for the National Center of Public Policy Research and who is part of that 10-page chapter on the response to woke capital, has said that when he started introducing shareholder resolutions on behalf of shareholders, actual real life shareholders rather than the large funds, and pushing back against politics in capital markets, that some of these environmental and social and governance proposals would get 5, 10, 15 -- if they got 20 percent, that that was a huge victory for them. Now you have these three firms who alone can provide almost 25 percent of any vote, which makes it that much more likely that you can pass an environmental, social or governance proposal as we saw with Exxon this year where the big three used their leverage to put three environmentalists on the board of directors of Exxon.


      In 2020 to get back to the opposition to this, David Sokol, who was at one time the heir apparent to Warren Buffett and who has been in the capital markets and in the energy business for a long, long time, wrote a letter to send to Mr. Fink and got a handful -- I think in the neighborhood of 30 fellow CEOs to sign on. And his response to Fink was that this something that would be very counterproductive to business. That pushing this stakeholder agenda on businesses was simply something to cover up what the real agenda was which was politics.


      Anybody who wants to be in business, anybody who wants to stay in business, anybody who wants to profit in business already takes care of their stakeholders. You cannot have a successful business if you're not concerned about your customers, if you're not concerned about your workers, if you're not concerned about the environment in which you operate. And that was primarily what David Sokol's point was was that this was superfluous nonsense that was intended essentially to be the sheep's clothing for the wolf to get into the flock and to undo what has traditionally been the rights of business shareholders.


Hon. Eileen J. O'Connor:  These matters have an impact not just on domestic businesses, but on international relations too. The biggest companies, and you write about them in your book, are doing business all over the world and very often, the ESG, etc., that is taking these companies puts us at a competitive disadvantage compared for example to China. Could you take about that?


Stephen Soukup:  Well, I actually wrote about that this morning because there was a large report that was published by the tech news organization called The Information that examined a number of records and did tons of interviews over the last several months and discovered that in 2016 Tim Cook signed a very secretive $275 billion deal with the Chinese Communist Party. The deal was that Cook would invest Apple funds, Apple shareholder funds in high tech, helping the Chinese build the best high tech industry in the world and training the workers to use it. And in return, what he would get was that the Chinese would back off and let him continue to build his products there and to sell his products there. And now iPhone is in fact as of this week the largest selling cellular phone in The People's Republic of China.


      So what we have is essentially Tim Cook, the CEO of the largest capitalized company in the history of the world, making deals with the Chinese Communist Party who has concentration camps for Uyghurs in Xinjiang Province, who is quickly, not slowly but quickly, stealing the independence of Hong Kong, that is threatening war against Taiwan, and all Tim Cook asks of them is that they leave him alone to build his products. Meanwhile back at home, Tim Cook is taking a hundred million dollars, again of shareholder money -- Tim Cook is worth several billion dollars -- but he's taking shareholder money and donating it to Black Lives Matter associated organizations in order to soothe his conscious about being a billionaire who is also a comsymp.


      So this is one of the great glaring contradictions of ESG, of woke capital, of stakeholder capital, whatever you want to call it is that these companies don't really care about these issues so much as they care about putting on this image for the American consumer, the European consumer, essentially the western shareholder consumer.


Hon. Eileen J. O'Connor:  Speaking of conflicts, the Southern Poverty Law Center is used by one corporation that you mentioned in your book to identify hate groups.


Stephen Soukup:  Yeah. The Southern Poverty Law Center, as you all well know, has a history of identifying anybody who slightly right of center or even remotely religious as being a purveyor of hate. Amazon has a program that many of you probably know about called Amazon Smile where you can enter into your profile the charitable organization that you would like a portion of your profits to go to. The problem is that the Southern Poverty Law Center is doorman on that program. They're the ones who decide whether or not a charity's legitimate or a charity is a hate group or -- for Amazon. It's not just for their own reports. They now decide that for Amazon.


      And the conflict, in particular, is that the SPLC is itself one of the recipients of Amazon Smile money. In fact, I think they're the ninth largest recipient of Amazon Smile money. So they will tell you that if you're Daniel Pipes at the Middle East Forum that you're a hater and that you're not allowed to get any donations from the Amazon Smile program.  Meanwhile, they're raking it in on their end. So that's one of the conflicts with Amazon and certainly with SPLC's reputation over the past few years. It's a very serious and very large conflict.


Hon. Eileen J. O'Connor:  So many corporations say one thing and do another. You have a chapter on Disney.


Stephen Soukup:  I do have a chapter on Disney. Bob Iger, the semi-retired CEO of Disney, is considered among the nicest men in business, the nicest man in entertainment. And I'm sure that he is, but he's also one of the most aggressively woke and most aggressively hypocritical when it comes to participating in business activities with the Chinese Communist Party.


      Steve Jobs and Bob Iger were very close. Most of the Laurene Powell Jobs' billions of dollars comes not from Apple stock but from Pixar stock or from funds related to Pixar after Disney bought them. She served on the Disney board of directors for a dozen years. Bob Iger served on the Apple board of directors. And Iger is on record as saying that he believes that had Steve Jobs lived that Disney and Apple would have merged at some point.


      He has taken Disney very much in the same direction as Tim Cook has taken Apple, which is to say that he's taken it to the largest country in the world, the large potential market in the world, and has done whatever is deemed necessary by the government of that nation to conduct business there. He is very much, like Tim Cook, a player in building relationships with the Chinese Communist Party. He has used his influence, obviously, Disney Shanghai. You see the way that Disney movies are edited, the way Disney movies or Disney promotions are edited in order to please the Chinese Communist Party. If you happen to be a fan of the Avengers, you'll see that the great one was from Dr. Strange who used to be a Tibetan monk who's now a middle aged British woman. And that's in large part because the Chinese told Iger that there would be no sympathetic Tibetan characters in any of the Avengers movies if you want the movies to be shown in China, and so Iger caved.


      At home, of course, he's very politically active and pushes back against the government. He pushed back against -- obviously pushed back again Georgia in 2019 with this abortion law, as I said, about 100,000 entertainment jobs in the state. He is very aggressive about donating Disney funds to various left-wing organizations. And he, like Bob Iger, pardon me, like Tim Cook, has been very much a study in contradiction.


Hon. Eileen J. O'Connor:  Your book came out early this year, so I imagine you finished it late last year or sometime last year. It seems like there have been a lot of developments this year that if you were to write a prologue or, no, it would be an epilogue to you book, you might talk about some of those. Could you elaborate on some of those?


Stephen Soukup:  Well, I think that the biggest thing is that people have become aware of what is going on. This is an issue -- when I signed my contract with Encounter Books and spoke with Roger Kimball about it, he was taking a real risk. He was taking a real chance because it wasn't an issue that anybody cared about. And in fact, I had been rejected by another publisher who said I don't know how there's any chance we could sell this.

      But because my book happened to hit at a particularly opportune time, just before the legislature and the governor of Georgia decided to reign in voter fraud, it became a very big issue. And then you add in -- so the other issues that have happened over the course of the year, BlackRock's management of some of the special offices that were created for COVID relief by the Federal Reserve, the new and aggressive SEC, the Vivek Ramaswamy book Woke Inc., which came out, I believe, in July or August, and suddenly this issue's blow up.

      People are now concerned about what is going on in American business and are now concerned about whether or not American business understands the way business is supposed to function. That's the biggest deal.


      Other developments, as I said, include BlackRock's close relationship with the Federal Reserve, BlackRock's continued domination of the asset management firm or asset management world. It is now, as I said, well over $10 trillion. It is the largest ESG manager now. It is the second largest passive manager in the world now. It just continues to grow and grow and grow in large part because of its connections to the federal government and to the Federal Reserve.


      Other developments. In the book I talk a little bit about how difficult it is to produce a truly green car, that mining cobalt in western and central Africa is in fact very environmentally unfriendly. It's certainly a population unfriendly proposal. There have been several legitimate claims of child slavery being a huge part of the cobalt mining operations. There have been credible accusations of battery manufacturers essentially leaving the cobalt mines unsafe for the population that lives around them, basically creating a toxic hazard. It's a very dubious business. And if you paid attention to the news over the past couple weeks, you may have noticed that the President's son, Hunter Biden, has helped the Chinese Communist Party and its business legions to secure rights to cobalt mines in Africa. So we see a confluence of various political and business stories merging as one which, unfortunately, is the theme of the day.


Hon. Eileen J. O'Connor:  Yes. It occurs to me also -- well, first I guess, Larry Fink sort of said out loud what had been going on for a long time, but he finally said it out loud in his letter to shareholders. And then this year, Christopher Rufo -- I guess maybe starting last year, but Christopher Rufo has been cluing everybody into the fact that so called critical race theory training is endemic. And first we learned about it going on in the schools, but this year we've also been learning about it going on in corporations.


Stephen Soukup:  Yeah. I've said this in speeches several times this fall. If we somehow manage to take back our institutions, if we somehow manage to prevent the wokening of American business and of American society in totality, Chris Rufo will be the greatest accidental hero in the history of the nation. He didn't set out to start a revolution, but he certainly did. His focus on the teachings in schools, coupled with the fact that parents were home seeing what their kids were learning over Zoom, has had an enormous political impact as we saw Virginia last month. His documenting of the sorts of training that goes on in corporations has also been incredibly important.


      I know that he's frustrated a little bit that it hasn't got as much leverage as the school stuff has. I would imagine that that's in large part because the economy's a little bit shaky and people are a little bit nervous about making too big a deal about corporations that employ a lot of people and putting them on the defensive. But certainly he's done yeomen's work in creating an aura of understanding of just how perverse a lot of this diversity, equity, and inclusion stuff can get.


Hon. Eileen J. O'Connor:  I have what I think is going to be a final question. We've got a couple of questions that have come in from the audience. So let me go ahead and suggest to some of the many, many people who are listening to you right now to go ahead and put your question or comment in the Q&A, and we'll get to that in a few minutes.


      Have any lawmakers expressed an interest in addressing what you've highlighted in your book?


Stephen Soukup:  Senator Rubio was the first, and he was very interested in pushing back against woke capital and getting involved in understanding the issue. And he has, in fact, introduced legislation to push back. It's not perfect legislation, but then again most legislation isn't, and it's a starting point. And the fact that he's interested in it is an enormous victory for those of us who've been pushing back against it.


      He was the first, but healthy competition among the young, ambitious senators of about the same age. Senator Cruz has also expressed interest. Certainly Senator Cotton and Senator Hawley would be expected to show interest as well. So I think there's a very solid core of reasonably young, extremely conservative senators who are very interested in the issue and would very much like to help in any way they can.


Hon. Eileen J. O'Connor:  Wonderful. Well, we have just touched on just a few of the many, many aspects of your book. A question from Charles Weller is, "How did so many top, smart businesspeople become anti-business woke, like Tim Cook, funding Marxist CLM college to make much money in CCP China?"


Stephen Soukup:  Well, you know, that's -- we didn't get into that in this part of -- or in this conversation. But part of the history that I go into in the book of woke capital is the cultural Marxist takeover of the institutions. I like to think of my book as something of a sequel to Roger Kimball's Tenured Radicals. Whereas Roger described how American higher education had been taken over by the cultural left, I describe how American business is being taken over. The difference between business now and education when Roger wrote in 1990 is that business is still not fully taken. American education was fully taken in 1990, and that explains a lot about why businessmen today are in fact very woke. Once the institutions are taken, they go to work on destroying the cultural hegemony that Gramsci described and creating a new cultural hegemony, and this one is based on what for lack of a better term we call woke.


      Tim Cook has been educated in universities by professors who believe this stuff. American business schools now believe this. In fact, the man who's responsible for promoting the idea of stakeholder capitalism more than any other, a philosophy PhD who none-the-less teaches business at Darden Business School at the University of Virginia, a man named Edward Freeman, has essentially captured the market on what is called practical business ethics in business school. Everything is directed at his vision of stakeholder capitalism which he essentially introduced in 1985. So once they took the other institutions, it was only a matter of time before they got to business. And our only hope is that we can stop it, and that the shareholders are powerful enough to push back against people like Cook.


Hon. Eileen J. O'Connor:  Steven Dewey asks "You mentioned Larry Fink and other multibillionaire leftists who are responsible for the SASB and pushing the ESG agenda. Are there any multibillionaire conservatives that can help challenge and counter their agenda? What about Elon Musk?


Stephen Soukup:  Well, Elon Musk is an interesting guy and an interesting case study here. Elon has the same problems that all electric car manufacturers have in that he needs cobalt. And he has the same problem that a lot of American manufacturing have in that he is manufacturing a lot of the parts that go into his vehicles in China. So he's sort of a mixed bag. If he continues down the path that we've seen in the past couple of days, where he's made some pretty bold and aggressive conservative statements, then I think he could be a great help. Certainly, he's got the money to help. But to date he's been a little sketchy and not exactly interested in the same types of issues that those of us who unhappy with woke capital.


Hon. Eileen J. O'Connor:  We have a few more questions. Andrew Yershko (sp) asks, "What can I do as a private investor to combat woke capital?"


Stephen Soukup:  Well, private investors are the people we need to reach the most. The way to fight back against this is to take back what is ours, to take back our dollar as consumers, and more to the point, our investments. If you have a privately managed account, talk to your advisor about where your money's being invested, how it's being invested, and what you should do. If you have an IRA or a 401(k) and you hold funds, see who manages those funds. See if they're with BlackRock or if they're with Vanguard. And then talk to your administrator about what you would like done.


      Even as a shareholder through funds, you can call and complain to investor relations. Customer service representatives in corporations hate getting angry phone calls. And investor relations people hate it ten times more. You can show up, if you hold any individual stock, you can show up, now that everybody's doing zoom, annual meetings, you can show up to the meeting. All you have to do is hold your stock for six months or so and you can get in, and you can ask questions if you can be a participant.


      There are lots of ways to be involved, but mostly what we want is for people to understand what's going on and to take back what is theirs. It's not going to be easy because the reason that it was able to be taken from us in the first place is out of convenience. But if we dedicate a little bit of time and effort, I think that we can take back what they have taken from us.


Hon. Eileen J. O'Connor:  Here's a related question from a slightly different angle. "If a lot of people want to invest for social reasons and goals and forego financial returns, doesn't that give the rest of us the opportunity to invest for traditional returns in the companies that woke folks shun and thus do better financially?"


Stephen Soukup:  Yes. Unfortunately, divestment is not the primary strategy with ESG. ESG practitioners don't look at a company and say, "Hey, you know what they are a fossil fuel company, we want out." What they do is they look at the company and say, "We're going to leverage our share. We're going to leverage our votes. We're going to leverage our power and wealth to change the way the company behaves." Again, to go back to the example of Exxon, the big three all got behind engine number one's proposal this year to put environmentalists, three environmentalists who want to shut down fossil fuel production on Exxon's board. They used our money. They used our $25 trillion to vote those three environmentalists on to Exxon's board of directors. That's the way ESG works. It's not about divestment. It's not passive. It's a very aggressive and activist form of investing.


Hon. Eileen J. O'Connor:  And this, judging from the time I think, might have to be our last question and it alludes to something that I believe you mentioned earlier but maybe could talk a little bit more about and that is the investment of public employee funds like civilian and military and thrift savings plans. The commentor says, "Actual assets purchased by those funds seem terribly opaque."


Stephen Soukup:  Well, they are. They're very opaque. The thrift savings plan unfortunately is managed -- I believe 60 percent is managed by BlackRock and State Street. And although there was a significant effort in the last administration to keep those funds from investing in Chinese companies, there are still other issues involved. And as long as it's being managed by BlackRock and State Street, you can bet that it's being managed in a very aggressively woke way. The way to change that obviously would be either to force the federal government to say look, you are no longer allowed to vote the shares of the owners of the funds if you are the manager or simply to change management. Unfortunately, as I said, most management is right now involved with the ESG movement up to their eyeballs, so changing management might not be terribly effective.


      But certainly we can, through regulation or legislation, I think we can make it more difficult for them to turn the wealth of our service members and federal government employees into their own political slush funds.


Hon. Eileen J. O'Connor:  I said that was going to be the last question, but there's one I wish we had found -- maybe you could say just a couple words about proxy services. I found that part of it so important.


Stephen Soukup:  Well, the proxy services are an enormous issue. I was asked last week if I could do one thing, if I wave a magic wand and do one thing to start pushing back against this more effectively, and I said one thing I would want to do would be buy ISS, Institutional Shareholder Services, by far the largest proxy advisory service in the world, because the influence they have over asset managers is enormous, and they are very aggressively leftist. And they are a very conflicted group. They have several very serious conflicts of interest with their business operations, and yet that's who's advising most asset managers on how to vote on proposals. Proxy advisors are an enormous problem, and ISS is the biggest problem of them all.


Hon. Eileen J. O'Connor:  Thank you so much. I see Evelyn's on. Does Stephen have time for a final thought?


Stephen Soukup:  Well, my final thought is that to go back to the long march of the institutions, it didn't take the cultural left long to take education. It didn't take long for them to take religion, entertainment, media, etc. It has taken them much longer to get to business. But they are doing it effectively. If we do not put up a fight, if we do not find a way to repel the cultural left from taking over American business and specifically American capital markets, then we will lose our society to the cultural left for good. I don't think there's any way for America to survive without American capitalism, and there's no way for American capitalism to survive while pursing stakeholder or ESG agendas.


Hon. Eileen J. O'Connor:  Thank you so much, Steve. Evelyn, the floor is yours.


Evelyn Hildebrand:  Thank you. Thank you, Lee, and thank you, Steve, for your very insightful comments. I'm sure all of our audience members also appreciate your comments this afternoon. On behalf of The Federalist Society I want to thank you both for the benefit of your valuable time and expertise today. And I want to thank our audience for participating and sending in your questions. We welcome listener feedback by email at As always keep an eye on our website and your emails for announcements about upcoming webinars and virtual events. Thank you all for joining us today. We are adjourned. 




Dean Reuter:  Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s Practice Groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at