Utah has filed a lawsuit against the National Association of Attorneys General over its share of around $280 million that is allegedly used to invest in ‘political schemes like ESG’.
The state lodged a suit on Tuesday that accuses the NAAG, the national membership group for state attorneys general, of putting taxpayers’ money at risk. Utah estimates it’s entitled to about $2m to $4m of NAAG assets and could try to recover the money if the lawsuit is successful.
The case comes amid growing controversy around the NAAG’s use of public money. Montana’s attorney general alleged in February that the organization lost $37 million last year, including a chunk of money lost to ‘ESG-linked investments’.
ESG is short for environmental, social and governance. ESG investments are typically linked to green energy and ‘woke causes’. Many Republicans are skeptical of these investments, which they claim underperform, and argue that they aren’t a good use of taxpayers’ money.
States pay a fee for membership of the NAAG, which has an annual budget of around $5.1 million. The organization also has assets worth around $280 million, much of which is held in ‘restricted accounts’.
Utah has filed a lawsuit against the National Association of Attorneys General over its share of around $280 million that is allegedly used to invest in ‘political schemes like ESG’. Pictured: Utah Attorney General Sean D. Reyes
The suit claims the NAAG and its Chief Financial Officer, Theresia Heller (pictured), should each be declared a ‘public treasurer or custodian of public funds’, which would mean the organization must use public funds in accordance with Utah state law
The NAAG also makes money by providing funds to its members to pursue lawsuits. If the suits are successful, the NAAG recoups the money, plus extra.
Utah’s law suit, filed by Attorney General Sean D. Reyes, says much of the NAAG’s assets belong to taxpayers. It alleges that the NAAG does not comply with Utah state laws about how public money is invested.
The lawsuit, which is understood to be the first step towards recouping Utah’s share, demands that the NAAG and its chief financial officer, Theresia Heller, each be declared a ‘public treasurer or custodian of public funds’.
This would then mean the NAAG was subject to Utah law about how public funds spent – and the state could demand the money back if the law isn’t followed.
Will Hild, Executive Director of the Consumers’ Research, said: ‘I applaud Attorney General Reyes for taking legal action against NAAG who continues to put politics over consumers by investing in ESG.
‘Utah is practicing good governance by standing up for consumers and not letting the ESG elites dictate American policy. Leaders like Reyes are on the front lines of the battle against the progressive’s political investment charade and Consumers’ Research will continue to offer our full support in the fight to end woke capitalism.’
Sources said the amount Utah is entitled to could be between $2 million and $4 million. The suits says NAAG assets should be audited to determine Utah’s share.
Utah filed the suit weeks after Montana’s Attorney General, Austin Knudsen, threatened legal action against the NAAG over ESG investments that it’s claimed have lost tens of millions of dollars.
The lawsuit in Utah 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 that are meant to benefit the people of Montana, or any other Montana-linked money’
Knudsen wrote to NAAG executive director Brian Kane and alleged it lost ‘$37 million or more last year on a coterie of esoteric investments in private equity and foreign stocks’.
He also accuses the organization of spending cash on ‘trips to Europe for member AGs and their families’ and says it is ‘acting like an unaccountable slush fund’.
Knudsen, who pulled out of the 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 that are meant to benefit the people of Montana, or any other Montana-linked money.
Ohio Attorney General Dave Yost is the president of the NAAG
‘There is no doubt in my mind now that NAAG is an unreliable and improper financial steward, and that Montana’s share of the money at NAAG needs to come home.
‘Return the money in your accounts that belongs to Montana within 90 days or I will go to court and sue to ensure that the money is safely and legally brought back 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 corrosive ‘ESG’ practices of investment firms and other players in the financial industry’.
Republicans have also attempted to curb the growing 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 allowing retirement fund managers to consider environmental, social and governance (ESG) factors in investment decisions for nearly half the country.
Several moderate Democrat senators sided with Republics on the resolution.
Utah AG sues NAAG over $4M share of $280M amid ESG controversy
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