by Thaddeus G. McCotter
When proxy advisors put politics before profits, retirees pay the price and fiduciary duty becomes a hollow promise.
Americans spend their lives working to support their loved ones, strengthen their communities, and build our country. Along the way, they entrust their future retirement incomes to 401(k)s, pension funds, or retirement accounts. This places a fiduciary duty on those individuals and organizations whose stewardship over those monies is to maximize the proceeds for retirees and all shareholders.
This duty does not include advancing a leftist political agenda by weaponizing retirees’ lifetimes of hard-earned income against everything they oppose and, moreover, grifting a handsome profit for relinquishing their fiduciary duty in doing so.
When such political shenanigans occur, they are rarely done in full view of retirees, who would be able to voice their opposition to the practice. Fortunately, Republicans are finally shining a light on proxy advisors to determine whether political aims are being prioritized over the returns retirees and all shareholders deserve.
As a former member of the House Financial Services Committee and former chair of the House GOP Policy Council, I am rarely heartened by a senator’s remarks. Yet Sen. Bill Hagerty’s (R-Tenn.) appearance on CNBC’s “Squawk Box,” making the case for holding proxy advisors accountable, was a welcome exception.
Sen. Hagerty explained how proxy advisors—the firms that counsel investors on how to vote on thousands of corporate issues every year—are “using, misusing, and abusing their power to achieve political agendas.” He added that “they also basically operate as a racket.”
The good senator is exactly right.
This is an issue that the American Consumer and Investment Institute has been raising for years. Its CEO, the astute former congressman Blaine Luetkemeyer, has continually warned about the growing influence of proxy advisors and has given the issue real legislative traction. This is truly no mean feat.
First, on December 11, 2025, President Trump issued an executive order directing federal antitrust authorities to determine whether Institutional Shareholder Services (ISS) and Glass Lewis have individually and collectively acquired too much control over the proxy advisor industry—and, by extension, corporate America—and whether they have wielded that power to advance ideological causes at the expense of shareholders and retirees while enriching themselves in the process.
Second, twenty-three state attorneys general have signed a “public letter calling on proxy voting advisory firms Institutional Shareholder Service and Glass Lewis to give equal treatment and provide needed transparency into their advice regarding shareholder resolutions that address a rising trend of politicized de-banking.” Florida, Iowa, Nebraska, Texas, and West Virginia have since sued ISS.
Why are these proxy advisors, ISS and Glass Lewis, under such scrutiny? The Alliance Defending Freedom’s report about the attorneys general’s letter provides some insight:
Sent to the two companies that account for 97 percent of proxy advisory services, the letter builds upon recent calls from 16 state treasurers and over 100 investors and financial professionals who have over $250 billion in assets under management for ISS and Glass Lewis to provide viewpoint-neutral advice that would respect the deeply held values of shareholders from a wide spectrum of political and religious beliefs.
The letter cited instances such as:
Proxy voting advice from ISS and Glass Lewis played an outsized role in the failure of de-banking transparency resolutions at JPMorgan Chase and PayPal—even while both companies seem to have canceled accounts based on ideological rather than financial factors. In 2022, Chase closed the account of Ambassador Sam Brownback’s National Committee for Religious Freedom without sufficient explanation, while PayPal similarly disabled the account of a group called the Free Speech Union before reinstating it amid public backlash.
In other words, according to the state attorneys general, this proxy advisor duopoly has abandoned its role as an objective assessor of corporate governance and has instead assumed the role of arbiter and enforcer of ideological conformity within the corporate suite.
First, they have allowed ideology to enter their assessment process, thereby influencing how they evaluate governing officers. Second, because these two proxy advisors dominate the market, their views have come to exert an undue influence over their clients—especially the officers, who risk poor ratings and possible removal by their boards of directors.
These proxy advisors have become more than gatekeepers; they have become wardens and parole boards and potential executioners as well.
This is why Sen. Hagerty raised the issue of a corporate “racket” during his CNBC interview.
Not only do these proxy advisors provide critical ratings and recommendations to American investors; they also sell consulting services to the very businesses seeking favorable scores from them. Such an arrangement bears all the hallmarks of a corporate conflict of interest. When a proxy advisor “suggests” that a client adopt a new policy, the officers and the board often have every reason to comply with—rather than contest—the “suggestion.”
The interests of transparency and accountability demand that such a corporate “racket” be exposed and ended.
Much work remains to be done, and time is of the essence. Americans did not spend a lifetime working and enduring the daily grind only to have an unaccountable corporate “racket” shortchange them in their golden years.
The Senate Banking Committee, chaired by Sen. Tim Scott (R-S.C.) and on which Sen. Hagerty serves, should consider legislation to restore transparency, competition, and accountability to the proxy advisory industry. Fiduciary duty means serving shareholders—including retirees—not social movements, and Congress should ensure that proxy advisors are held to that time-honored and equitable standard.
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An American Greatness contributor, the Hon. Thaddeus G. McCotter (M.C., Ret.) served Michigan’s 11th Congressional district from 2003 to 2012. He served as Chair of the Republican House Policy Committee and as a member of the Financial Services, Joint Economic, Budget, Small Business, and International Relations Committees. Not a lobbyist, he is also a contributor to Chronicles, a frequent public speaker and moderator for public policy seminars, and a cohost of The John Batchelor Show, among sundry media appearances.
Thaddeus G. McCotter
Source: https://amgreatness.com/2026/06/13/stop-corporate-rackets-from-shortchanging-americans-retirement-income/
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