I have previously written about the mounting protests against the conduct of the National Association of Attorneys General (NAAG), the forum for state attorneys general that has operated less as a nonpartisan forum than as a means for promoting some of the Democratic Party’s favorite agenda items. The organization’s nonprofit entities built a sizeable slush fund after years of being joined at the hip to plaintiffs’ firms.
Now the incoming attorney general of Kansas, Kris Kobach, has opened up a new front in the quest to hold the organization accountable. He has taken a stand against pouring money into investment firms and other companies that are subjected to ESG (Environmental Social Governance) standards. As Kobach asserted, “The proponents of ESG want to use corporations, investment strategies and ESG scoring to phase out fossil fuels, increase our dependence on foreign countries, weaken agriculture, starve the firearms industry of capital, and reshape membership on corporate boards.”
Last week, Kobach sent a letter to NAAG’s executive director asking for disclosure of the organization’s investments, with an eye toward identifying those that support “the corrosive ‘ESG’ practices of investment firms and other players in the financial industry. These practices destroy shareholder value in pursuit of faddish ideological aims, often without proper disclosure to investors.” And of course, these funds ultimately belong to NAAG’s constituent states.
This is good government 101: Before engaging with a group that (directly or not) commands taxpayer money, find out where that group is invested. Kobach’s letter should not be necessary; NAAG should already have been sharing this publicly.
But NAAG and other groups like it prefer to operate in the shadows. Although its nonprofit entities hold hundreds of millions of dollars from public litigation, NAAG does not file a 990. NAAG does not publicly list its stock holdings. Its investment strategies are opaque, but we do know that they just lost $37 million over the past year. It’s no wonder Republican attorneys general are quitting, and there are rumors of legal action against the organization.
Over the last few days, NAAG responded to Kobach’s letter with a list of investments. It was crafted without explicit labels of ESG, but the list clearly includes major ESG pushers like BlackRock, the DFA Emerging Markets Social Core Equity Fund, and the State Street S&P 500 Index Fund. The latter fund, as Consumers’ Research executive director Will Hild explained, may appear innocuous on paper, but in practice, it has used its assets “to push a political agenda” even to the point of “chastising companies in shareholder votes for giving to conservative candidates.” BlackRock, which commands sizeable assets in numerous state public pension funds, was exposed last summer as an ESG leader that puts its climate agenda above the best interests of pensioners.
Kudos to Attorney General Kobach for asking the right questions and bringing into the sunlight an otherwise unaccountable quasi-governmental organization that has been very eager to push left-wing interests.