Blue States Invest Retirees’ Savings in Firms Boosting Trump’s Extreme Agenda

This story is published in partnership with Rolling Stone.

Major retirement systems in blue states — where many governors and attorneys general are fighting hard to counter extreme and likely illegal actions by the Trump administration — have invested billions of dollars in some of the biggest corporate supporters of those actions, a review by the Center for Media and Democracy (CMD) has found.

Since his inauguration in January, President Donald Trump has focused his ire on blue states in a number of ways. He’s closed Department of Health and Human Services regional offices in states where he lost the last election, attacked “state overreach” on climate mitigation policies he opposes, and threatened to withhold federal funds from universities located in Democratic-led states that voted against him in 2024. He has also attempted to withhold already allocated funding to blue states on the basis of their immigration policies, deployed National Guard troops and the Marines in California over the objections of Democratic Gov. Gavin Newsom, and sent masked Immigration and Customs Enforcement (ICE) agents to detain immigrants, primarily in blue state “sanctuary cities.”

Trump has made no effort to hide his campaign of retribution, posting to Truth Social after June’s “No Kings” protests across the country that he intended to “expand efforts to detain and deport Illegal Aliens in America’s largest Cities, such as Los Angeles, Chicago, and New York… and other such Cities, [which] are the core of the Democrat Power Center.”

Blue state attorneys general have responded with more than 30 lawsuits against the Trump administration’s unconstitutional moves. But despite these high-stakes battles, public pension funds in California, New York, and Illinois have invested more than $6.1 billion in six companies that bankrolled Trump’s election or are deeply involved in carrying out his authoritarian agenda.

The investments made by pension funds are made with limited input from the public sector workers that contribute to them — a fact that labor experts believe is a major problem for corporate accountability. Many public sector workers have protested and urged their pension funds to divest from Tesla in recent months as Elon Musk-backed cuts have wreaked havoc in communities across the country.

The following corporations have been helping the president execute some of his most controversial and authoritarian policies this year:

Tesla

Tesla CEO Elon Musk pumped $290 million into helping elect Trump and Republicans last year, spending far more on the election than any other billionaire donor. The president then rewarded Musk by keeping him at his side throughout the transition and anointing him head of his so-called Department of Government Efficiency (DOGE), a controversial, chaos-generating special operation best epitomized by Musk wielding a chainsaw as he abolished and halted the work of whole agencies and gleefully reduced the federal workforce by about 250,000 federal workers, the majority of whom were represented by unions.

Since departing the DOGE effort at the end of May, Musk and Trump have butted heads, but the world’s richest man still reaped massive dividends from the effort, largely from gutting agencies that were investigating him. Investors have raised concerns about Tesla’s lofty valuations in the aftermath of his public split with Trump. State retirement systems in California, New York, and Illinois have $3.7 billion invested in Tesla.

Valor Equity

Valor Equity is run by Musk’s friend and private equity manager Antonio Gracias, who has worked with DOGE in an attempt to dig up evidence of voting by immigrants through controversial access to once private Social Security data. Valor Equity manages billions of dollars for blue state pension funds — while also investing in Musk company SpaceX and the drone maker Anduril, which hope to be awarded contracts to help build Trump’s proposed $830-billion, Israel-inspired Golden Dome missile defense shield. The recently passed “Big Beautiful Bill” included a provision that mandated that federal funding for border surveillance towers go to companies with the exact specifications provided by Anduril.

SpaceX has also filed a federal lawsuit seeking to invalidate the National Labor Relations Act, setting up a potential abrogation of the cornerstone of labor rights in the U.S. by the ultra-conservative majority on the Supreme Court. Valor Equity has also invested in xAI, which owns Musk’s platform X, formerly known as Twitter. On July 8, controversy emerged as Grok, xAI’s AI chatbot integrated with X, began spouting pro-Hitler propaganda. California, Illinois, and New York retirement systems have $1.3 billion invested in Valor Equity funds.

Palantir

Right-wing billionaire Peter Thiel’s company Palantir is building a national database to help the Trump administration better amass information on everyone living in the U.S., with the company having already received $113 million in federal funds as of the end of May, according to recent reporting by The New York Times.

The tech company was also awarded an additional $795 million Defense Department contract in May, and has received a new $30 million contract from ICE to more closely track immigrants in the U.S. In total, the pension funds surveyed have $745 million invested with Palantir.

Airbnb

Airbnb co-founder Joe Gebbia, a designer and Silicon Valley entrepreneur who became a “close friend” of Musk’s and still owns a seven percent stake in his vacation and short-term rental firm, has been heavily involved with DOGE since the beginning and now hopes to replace Musk in leading the department’s ongoing effort to slash the federal workforce. The 43-year-old billionaire also sits on Tesla’s board and was a longtime Democratic donor before voting for Trump in 2024. The pension funds surveyed have $330 million invested in Airbnb stock.

GEO Group

GEO Group, one of the two components of the major private prison duopoly, received a $1 billion contract with ICE in 2025. On a recent earnings call, GEO Group Executive Chairman George Zoley remarked on the lucrative opportunity presented by Trump’s mass deportation agenda.

“This is a unique moment in our company’s history,” he said. “We believe we are well positioned to scale up our diversified segments in secure housing, transportation, electronic monitoring to meet the changing needs of this new administration, and to continue to enhance value for our shareholders.”

GEO Group is being sued for illegal labor trafficking related to work performed by immigrant detainees, and major concerns have been raised about conditions inside of GEO facilities. GEO Group subsidiaries contributed $1.3 million to a pro-Trump super PAC in 2024, and another $500,000 to Trump’s inaugural committee. The Illinois Municipal Retirement Fund and the New York State Teachers’ Retirement System have $3.9 million invested with GEO Group.

CoreCivic

The CEO of the private prison firm CoreCivic stated on a recent earnings call, “Our team has always been mission and outcomes-focused, but this is such a significant moment of time in our company’s history. Never in our 42-year company history have we had so much activity and demand for our services as we are seeing right now.”

The firm recently received a no-bid contract to reopen a 1,033-bed prison in Kansas that had been effectively shuttered by Biden administration policies, after donating $500,000 to the Trump inaugural committee. Stocks in both GEO Group and CoreCivic have soared following passage of Trump’s “Big Beautiful Bill,” which will pump another $45 billion into immigration detention capacity and transportation over the next few years. The Illinois Municipal and New York State Teachers’ funds have $8.4 million in CoreCivic holdings.

Workers Capital

The California Public Employees Retirement System (CalPERS), the country’s largest pension fund, and the California State Teachers Retirement System (CalSTRS), the country’s second-largest pension fund, have received calls to divest from Tesla (as well as from the broader military-industrial complex).

Other public pension funds in the U.S. and abroad have already taken action to pull their investments in Tesla and other anti-labor corporations. The pension fund for public sector workers in purple Lehigh County, Pennsylvania, recently voted to stop buying new Tesla shares and begin the divestment process from the carmaker. On June 13, the Swedish pension fund AP7 announced its intention to sell its entire $1.4 billion stake in the automaker, stating that “AP7 has decided to blacklist Tesla due to verified violations of labor rights in the United States.”

In March, Denmark’s Akademiker Pension also announced its intentions to divest in Tesla over labor rights issues. In January, Europe’s largest pension, the Dutch ABP fund, divested from Tesla, as well as from Meta and Alphabet, over environmental, social, and governance concerns. Other Dutch pension funds had divested from Tesla prior to this year due to labor rights concerns. In October, the Norwegian asset manager Storebrand announced its intentions to sell Palantir stock due to their concerns that its practices violate human rights law.

Lehigh County Controller Mark Pinsley, a Democrat, told CMD that “there’s a real fiduciary issue here…. Tesla’s client base is Democrats, people who care about the environment. Then [Musk] goes and [effectively] alienates all of his customers. [So] all fiduciaries should be looking at this — at the very least telling active managers to not invest in Tesla… until [the company] makes some changes,” including agreeing to a neutrality agreement with labor unions. (Given Musk’s ongoing feud with Trump, he may well alienate Republican customers, too.)

On April 2, Randi Weingarten, president of the 1.6 million-member American Federation of Teachers, sent a letter to state chief fiduciary officers urging them to examine risks inherent to investing in Tesla by “communicating with the money managers that manage Tesla stock on behalf of your state and its retirement funds to ask them what steps they are taking to safeguard retirement assets.”

Fiduciary Duty

The typical defense from public pension fund managers who are held to account for investments considered contrary to the public interest is that they have a fiduciary duty to pensioners that trumps all other concerns, and that this obligation includes diversification. In a 2017 statement, CalPERS claimed that divestment “limits investment opportunities, decreasing diversification, limiting returns, and increasing risk in our investment portfolio.”

But the definition of fiduciary duty is notoriously fuzzy, asTed Siedle, a former attorney with the Securities and Exchange Commission (SEC), points out.

“There’s an argument that anything can be a breach of fiduciary duty or consistent with fiduciary duty,” he told CMD. “Public pension funds are not governed by any federal fiduciary standard, and [there are] scant state standards, which means that any argument can be made that a particular investment is consistent with or violates fiduciary duties.”

Samir Sonti, a professor of urban studies at the City University of New York, told CMD that the flexible definition of fiduciary duty is frequently used as a dodge against divestment and keeps many managers from taking action.

“In the eyes of many, pension fund managers’ fiduciary duty has been reduced to the notion that whatever can deliver the quickest [return on investment] is in the interest of the fund,” said Sonti. “What this misses is that often what promises to deliver the quickest [profit] also poses existential threats to the labor movement, public pensions, and the public sector more broadly. It’s incumbent on those who oversee pension funds to recognize the real threats… that DOGE and the Trump administration more broadly present to their existence.”

Forty years ago, pension funds were far more conservative, investing the bulk of their capital only in stocks and bonds. Yet the types of risky investments being made today — namely private equity, in which the 10 largest U.S. pension funds have invested over $300 billion, and which are subject to losing all of their value — continue to pass fiduciary muster at most pension funds, even those with managers who have fiercely rejected arguments in favor of divestment.

Siedle points out that there is extremely little public information about this enormous sum of money pumped into the industry. “If you’re going to manage public money, you must be subject to public scrutiny,” he said. “The private equity industry has successfully gone city by city, and state by state, arguing that their offering documents are proprietary and contain trade secrets,” excluding them from public records laws, meaning that the public lacks critical information about this increasingly influential industry.

Who Controls What

What are the barriers to pension funds divesting from pro-Trump companies? Mike McCarthy, a professor of sociology at UC Santa Cruz who studies the labor movement and pension funds, noted the “tremendous lack of democracy in these funds,” adding: “There’s a lack of any oversight from workers about how these funds are invested.”

McCarthy pointed to a $34-billion Dutch pension fund for retail sector workers that has a far more robust process for engaging its members and beneficiaries in investment practices than do most American pension funds.

Several years ago, the Dutch pension fund brought beneficiaries and members together for a multi-day discussion about how the fund was invested. A randomly selected group of participants chose to invest more in social good and public housing. “There was an explicit recognition in these recommendations that [beneficiaries would] be willing to give up a certain return on investment,” McCarthy said. “We just don’t have that [kind of process] here.”

Given the excesses of the current Trump administration, McCarthy called on public sector union members to be more vocal about the need to take control over the way their pensions are invested. Some of these unions have been outspoken, but others have historically been more reticent to criticize the investment strategy of their public pension fund managers.

“I think public sector unions should demand control over their investments,” said McCarthy. “Historically, the money that has gone into these funds has been considered deferred wages. It’s their investment. They own it, but they don’t control it.”