‘We want to make sure that our state treasurers are defended against attacks like that,’ Noah Wall, executive director of SFOF Action, said.
The national fight over the politicization of public pension funds heated up this week.
Republican states across the country have passed laws to boycott Wall Street banks and asset managers who they say are pushing a left-wing agenda on issues such as global warming and gun control. But state financial officers who enforce those laws say they are coming under fire as progressives fight back.
This week, the State Financial Officers Foundation (SFOF), an organization of conservative state treasurers, announced a new nonprofit that pledged to come to the defense of state finance officials.
Treasury officials in states including West Virginia, Texas, Louisiana, Utah, and Oklahoma have begun terminating contracts with financial firms that they say are discriminating against local companies in industries such as coal, oil, gas, and firearms.
Return to Prioritizing Pensioners
Much of the financial tug of war between conservatives and progressives concerns how state and local pension money for teachers, police and fire officials, and other public workers will be invested, who will manage them, and how the shares in which those funds are invested are voted. Behind all this is the environmental, social, and governance (ESG) movement, which has sought to leverage such investments to pressure companies to go along with efforts against fossil fuels, firearms, and other industries targeted by progressives.
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This includes not only the companies the funds invest in or avoid, but also how fund managers vote the shares in which the pension money is invested.
“BlackRock has repeatedly and rightly recognized climate change as an investment risk,” Mr. Lander wrote. “In your 2020 letter to CEOs, you name climate change as a ‘defining factor in companies’ long-term prospects.’ As a fiduciary cognizant of the risks of inaction, BlackRock must demonstrate a plan to use its position as the world’s largest asset manager, with all the corporate governance responsibilities that go along with that position, to move its portfolio companies to get their businesses in line with a net zero economy,” Mr. Lander stated.
Conservative state treasurers say their efforts to combat this movement, including firing activist asset managers, have sparked a strong reaction from Wall Street firms and progressive organizations.
“Oklahoma started trying to push back and reclaim our space in the investment side of public money, and the people that were put on the list certainly took it personal,” Mr. Russ told The Epoch Times. “And they went to some of the most reputable, best known lobbyist groups.”
How Expensive Is Fighting Wall Street?
In addition to lobbying state legislators to overturn the law, Mr. Russ said, the firms’ representatives spoke with individual pension board managers, arguing that replacing the asset managers could cost the state tens of millions of dollars.
“That’s not true, but they want you to think it’s true,” Indiana State Treasurer Daniel Elliott told The Epoch Times.
“Those same companies tried to give a fiscal analysis that showed it was going to cost the state of Indiana $6.7 billion, and of course, that was all over the news,” Mr. Elliott said.
He challenged a number of assumptions in that analysis, such as that the state would be unable to find a comparable replacement to manage its money.
“So they redid it, and it was a $500,000 cost over 10 years,” he said.
Progressive organizations and unions have joined the fight against those who oppose the ESG movement, state officials say.
After firing BlackRock from managing Texas state education funds, Mr. Kinsey said he was targeted by various organizations.
“A random D.C. group was after me for a while,” he said. “And then, interestingly enough, the teachers unions.”
Mr. Kinsey said he was surprised that the teachers unions opposed him because the tax revenues from the oil and gas industry comprise a significant percentage of state education funds, paying for things such as school books.
In response, the SFOF has launched SFOF Action, a 501(c)(4) organization, to defend state officials who oppose the ESG movement. The SFOF currently has members from 28 states.
“We’ve seen BlackRock and the other financial majors across the country really step up their lobbying in the last 12 months,” Noah Wall, executive director of SFOF Action, stated at a press conference announcing the launch of SFOF Action.
In addition to lobbying from financial firms, Mr. Wall said he is also concerned about outside financing and other efforts to remove conservative financial officers. He cited legislation recently introduced in Utah that would consider whether the state treasurer and state auditor should continue to be elected positions, or whether they should be appointed by, and under the control of, the governor.
“It didn’t go anywhere this session,” Utah State Treasurer Marlo Oaks said. “But it seems pretty clear that if you were doing a survey to see if those positions are appointed or elected, that’s the first step in the effort of appointing those positions.”
“We’ve seen what left wing groups have done in trying to take over positions around the country, we’ve seen what they’ve done with secretaries of state, and we’ve seen their advocacy in trying to elect radical local prosecutors, and we want to make sure that our state treasurers are defended against attacks like that,” Mr. Wall said.
Original News Source Link – Epoch Times
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