Utah has filed a lawsuit against the National Association of Attorneys General over its approximately $280 million share that was allegedly used to invest in “political schemes such as ESG.”
The state filed a lawsuit on Tuesday accusing NAAG, the national membership group for attorneys general, of endangering taxpayers’ money. Utah estimates it is entitled to about $2 million to $4 million in NAAG assets and could seek to recover the money if the lawsuit is successful.
The case comes amid growing controversy surrounding the NAAG’s use of public money. The Montana attorney general claimed in February that the organization had lost $37 million last year, including some of the money lost through “ESG-linked investments.”
ESG stands for environment, social and governance. ESG investing is typically linked to green energy and “awakening causes.” Many Republicans are skeptical of these investments, which they believe are underperforming, claiming they are not a good use of taxpayers’ money.
States pay a membership fee for the NAAG, which has an annual budget of approximately $5.1 million. The organization also has assets worth about $280 million, much of which is in “restricted accounts.”
Utah has filed a lawsuit against the National Association of Attorneys General over its approximately $280 million share that was allegedly used to invest in “political schemes such as ESG.” Pictured: Utah Attorney General Sean D. Reyes
The lawsuit alleges that the NAAG and its chief financial officer, Theresia Heller (pictured), must each be named “public treasurer or custodian of public funds,” which would mean the organization must use public funds in accordance with Utah state law .
Total ESG bond yields fell 15.2 percent from September 2021 to September 2022, underperforming the S&P 500
The NAAG also makes money by providing money to its members to file lawsuits. If the suits are successful, the NAAG recovers the money, plus extra.
Utah’s lawsuit, filed by Attorney General Sean D. Reyes, says many of the NAAG’s assets are owned by taxpayers. It alleges that the NAAG does not comply with Utah state laws about how public money is invested.
The lawsuit, which is believed to be the first step toward recovering Utah’s share, requires the NAAG and its chief financial officer, Theresia Heller, each to be named “public treasurer or custodian of public funds.”
This would then mean that the NAAG was subject to Utah’s law on the expenditure of public funds – and the state could demand the money back if the law is not followed.
Will Hild, executive director of the Consumer Research campaign group, said: “I applaud Attorney General Reyes for taking legal action against NAAG, which continues to put politics over consumers by investing in ESG.
“Utah exercises good governance by standing up for consumers and not letting the ESG elites dictate US policy. Leaders like Reyes are at the forefront of the fight against the progressive political investment charade, and Consumers’ Research will continue to offer our full support in the fight to end awakened capitalism.”
Sources said the amount Utah is entitled to could be between $2 million and $4 million. The lawsuit says NAAG assets must be audited to determine Utah’s share.
Utah filed the lawsuit weeks after Montana Attorney General Austin Knudsen threatened legal action against the NAAG over ESG investments alleged to have lost tens of millions of dollars.
The Utah lawsuit was filed weeks after Montana Attorney General Austin Knudsen, pictured being sworn in, told the NAAG, “I have come to the conclusion that NAAG can no longer be trusted to hold assets on behalf of Montana.” , assets intended to benefit the people of Montana, or any money associated with Montana’
Knudsen wrote to Brian Kane, NAAG’s executive director, claiming that last year it had “lost $37 million or more to a cabal of esoteric private equity and foreign equity investments.”
He also accuses the organization of spending money on “travel to Europe for member AGs and their families,” saying it “behaves like an inexplicable slush fund.”
Knudsen, who retired from NAAG last year, said in the letter: “I have come to the conclusion that NAAG can no longer be trusted to hold assets on behalf of Montana, assets intended to benefit the people of Montana. come, or any other Montana-linked money.
Ohio Attorney General Dave Yost is the chairman of the NAAG
“I now have no doubt that NAAG is an untrustworthy and inappropriate financial steward, and that NAAG’s portion of the money should go home with Montana.
“Within 90 days, return the money in your accounts that belongs to Montana, or I will go to court and file a lawsuit to ensure that the money is returned safely and legally within the four corners of Montana law.”
The ESG movement has recently become a rallying cry for Republicans on Capitol Hill, who are pushing for legislation to protect retirement and investment accounts from asset managers who prioritize ESG values.
Kansas AG Kris Kobach has also asked the NAAG to disclose its investments to “combat the undermining” ESG practices of investment firms and other players in the financial industry.
Republicans have also tried to curb the increasing use of ESG principles by federal agencies as they spend taxpayers’ money.
Earlier in March, the Senate voted 50 to 46 to block a Biden administration rule that would allow pension fund managers to consider environmental, social and governance (ESG) factors in investment decisions for nearly half of the country.
Several moderate Democratic senators sided with the republics in the resolution.