Hello, and welcome back to drillt. We've been on a little bit of a break this summer, but we're back and we'll be bringing you weekly episodes for the rest of the year. Today I have with me Jesse Coleman. He's a senior investigator with Documented. They're a watchdog group that looks at corporate influence on policy, so, as you might imagine, the oil and gas industry shows up on
their radar quite a bit. This past week, a Documented investigation into a totally innocuous sounding group of state treasurers turned up a whole lot of information about how Republicans and dark money groups are trying to use the power of state treasurers to push back against ESG Environmental, Social and Governance Guideline. In the finance industry, this is a group of policies that govern climate disclosures in the financial space and has gone pretty much unchallenged for the past
decade or so. Banks have been okay with it, Investment funds have been okay with it. Oil and gas companies have said that they like the idea of climate disclosure. But as Jesse found out, all of a sudden a year or two ago, that started to shift. There was a noticeable shift in tone and a sudden pushback happening. The folks that Documented notice this and wanted to look into it, and what they found was a really surprising strategy that's gone pretty much unnoticed for the past couple
of years. There was a piece in the New York Times about this this past week. Documented has put all of the documents related to the investigation on their website, and Jesse's here to walk us through all of it. That's coming up right after this quick break. Tell me a little bit about the backstory of this investigation. What made you start looking at state treasurers and this particular group that wound up being central to this.
Yeah. Sure, So you know, we follow the oil and gas industry very closely. Documented. You know, our role is to kind of unveil corporate power over society and politics, and you know, the oil and gas industry is definitely a big piece of that, right So, you know, over the last couple of years, we had really noticed that this kind of catch all term ESG, which stands for environment, Social and Governance Reporting, was really becoming a really big
deal for the oil and gas industry. And what ESG is is you know, you like, large corporations have to disclose certain things about their impact on the environment and society to shareholders, and it was becoming, you know, for the oil and gas industry. We were watching it takeover
agenda of meetings and everybody was talking about it. And for most of like the end of twenty twenty and early twenty twenty one, we were like, well, this is seems like a way for the oil and gas industry to access very low cost capital by sort of greenwashing themselves and saying that they're you know, good on all of these measures and disclosing certain aspects of their business, but maybe not changing their business practices very much. Not
to say that, you know, it was all bad. It's great to have more disclosure, and you know, a more fulsome sort of disclosure system, which you know is kind of in the works right now in certain regulatory agencies, would be a good thing. But at the beginning of this year we noticed a real shift. Whereas before it seemed like these climate disclosures were sort of inevitable. You know, the big oil companies like Chevron and Exxon were you know,
saying we're on board for this. You know, everybody everybody was saying, you know, we're going to do these climate disclosures, it's going to happen. Previously at the at the at the beginning of this year, started to see like a
lot of pushback. We started to see direct sort of attacks on this idea of climate disclosure, and we started to see sort of little brush fires pop up in different states, you know, attacking the idea of disclosing climate information like this, and we thought, well, you know that's
pretty interesting, that's really interesting. Yeah right, yeah, yeah, So, you know, it all kind of kicked off, especially with a bill that became law in Texas, which you know, it was called kind of colloquially the Fossil Boycott Rule, which said that you know, the state of Texas will no longer do business with any company that quote unquote Boycott's fossil fuels, and that became a law in the state,
and you know, we said, well, that's that's interesting. This isn't coming from nowhere, you know, So we started kind of filing records requests around around the states, looking for initially just communications between you know, the Texas Comptroller, which is what they call their treasure and other sort of of state officials that would be potentially pushing these boycott bills in different states. And as we got started to get some of these records back, you know, it wasn't
exactly what we anticipated. We kind of anticipated this group, the Texas Public Policy Foundation was maybe you know, driving this in the back seat to a large degree, and you know, it actually turns out they are really involved.
But there's this other group called the State Financial Officers Foundation that was acting as this really important central node of a much wider campaign to fight climate policy in general that you know, included this web of dark money groups that did include, like I said, the Texas Public Policy Foundation, but other major national political players like Heritage, the American Legislative Exchange Council ALEC, and some of the you know, kind of the most powerful dark money groups
in the United States.
Wow, that is so interesting, so so interesting. Okay, So that tipped you off like that, This random I mean, it's such a perfect, like innocuous sounding group, right.
Yeah, exactly, Yeah, hiding behind their very boring name.
Yeah, So what are they and what were they getting up to?
So the State Financial Officers Foundation is a nonprofit group. They kind of build themselves as a group of state treasurers that are interested in the quote unquote free market, which is really interesting. That's usually sort of code word as I'm sure you and many other people know for you know, Republican like righting politics, and that's kind of what they had been since they're founding about ten years ago. But they didn't, you know, they weren't really weighing into
major national issues. Like the things that they were focused on were really within the realm of financial officers of states, you know, pension you know, like retirement plans, college savings plans, that kind of thing. But we see about a year ago this group of state financial officers foundation, they really shift their focus and become completely obsessed with climate measures and talking about climate change and repeating you know these
like really old lines on climate denial. You know, CO two isn't bad for you, it's causing a great greeting of the earth, and all of these efforts to.
Hit in the wayback machine.
Yes exactly. Yeah, we've heard all this before and kind of thought some of it had you know, kind of passed into into messaging that doesn't work anymore. But sure enough, you know, here it is again at the state level.
Wow, Wow. So okay, so they had this big shift last year starting to talk about climate and ESG all the time and whatnot. What did you find about what kind of drove that shift?
Well, So, I mean, just just to like one more thing kind of how they operate. They're really closely tied, like I said, to the American Legislative Exchange Council, and they have a lot of similar attributes. One of those is that they have you know, two or more yearly meetings where they get together all their Republican treasure and all of their corporate sponsors and they go to fancy dinners and they kind of talk about, you know, how they're going to you know, strategize on whatever the issue
of the day is. Well that you know, about a year ago, that issue of the day, like I said, became opposing climate finance policy kind of in many different ways, but it really coalesced around attacking policies by large financial institutions like Black Rock, and moves in the financial sphere of you know, by like the Securities and Exchange Commission or the Department of Labor where these agencies are saying you should disclose climate risks and that and that sort
of thing. So yeah, so they they kind of shifted from talking about more financial stuff to these really kind of hard line climate issues, and they invited in like a key turning point here is when they was when this other dark money group called Consumers Research became a top fiscal sponsor of the State Finance Officers Foundation. And then you see the agenda of these, you know, yearly gatherings.
These meetings shift like almost completely over to how do we attack black Rock, how do we stop climate finance disclosure rules, how do we take on quote unquote wote capitalism.
It's so funny because I was reading through your through the description on the documented website, and as soon as I as I saw woke capitalism, I was like, oh god, I'm sure there's like a Peter Teal strive capital uh say here. Sure enough. It was like two paragraphs later, I was like, there it is, so yeah, tell me about this is this is like a thing right in the last year or two of these kind of libertarian folks being all up in arms about ESG and quote
unquote woke capitalism. What what's that about?
Well it's a great example of how uh, you know, these sort of republican dark money groups are really good at creating a like a fake thing to attack and really kind of driving it into reality, you know, from a very niche, very like sort of off the wall issue that nobody is talking about to now. You know, you hear Mike Pence talk about it, You hear it's on Fox News every day like to you know, now it's really kind of taken taken been taken up by
the zeitgeist. And like I said, really I think you can trace that back to a large degree to groups like consumers Research, who you know, they kind of saw the writing on the wall. They saw that, you know, climate policy was really stalling in most places, but one place that it wasn't really stalling and was continuing to move was in this financial world. And like I said, you know, the SEC was taking up rules and these large financial asset managers were saying, we have to take
climate change into account, you know, in our investments. And so they kind of said this is quote unquote wote capitalism and black Rock is a vulte capitalist, which is kind of ridiculous if you know anything about Blackrock right there, you know, I mean, WOK doesn't really have a meaning necessarily, but they're.
Just capitalism is an oxymoron. That's it's just yeah, it just is.
But it allowed them to sort of, in this really new and interesting way, meld defense of the fossil fuel industry with the culture war, and it was way more successful than other attempts like this. And you know, this group of State Financial Officers Foundation, because they were made up of treasures, state treasurers who actually have a lot
of power over financial decisions in their states. You know, they elevated this group, the State Financial Officers Foundation, into this really key weapon against climate policy.
That's so interesting because I feel like it kind of coincides with with a lot of folks in the climate movement kind of. I mean, a lot of people have been very focused on the financial sector for a long time, the divestment movement and all of that, right, But I feel like there's just in the last year to people who had traditionally kind of been like finance and you know, it scares me. I have been, you know, have been
kind of turning towards it too. So it's interesting that these guys sort of anticipated more attention in that realm. So what are some of the things that they've been able to accomplish well.
So they've passed laws in five states and are aimed at passing laws in twenty more states that are based off of this sort of fossil fuel boycott rule, which there's different sort of model policies that they're passing around. The end result is kind of all the same, which is to either scare asset managers into backing away from their climate promises or to get rid of the asset managers that have climate promises. And that's you know, that's that's been a really sort of big and interesting piece
of this like sort of wide ranging campaign. But they're also doing, you know a lot of other things. They're opposing federal nominees to you know, like key positions in federal government that oversee you know, financial measures. They're sending
comments to rules that are signed by the Treasures. So they look you know like very legitimate and look very serious, but yet they're all kind of coordinated behind the scenes by this other national group, and they're they're also just kind of, like I said, just figuring out how to kind of scare the financial industry away from over talk about climate change.
That is a big deal because I feel like it's just been kind of this innocuous thing in the background for like twenty years, you know, and yeah, you're right, like for a long long time the oil companies, it was more like something that they seem to see as a helpful tool for them to relaunch.
Honestly, totally. Yeah. I mean we've heard the oil industry say, you know, this is a great way to access low cost capital because all we have to do is disclose X and Y, and then suddenly, you know, we get cheaper money from it. So you know, it's not and I think this is another really interesting thing about this, and you know, you kind of hear ALEX leader Lisa Nelson talk about this recently. She talked about this recently. But you know, they did polling on Blackrock and what
they found was that Democrats don't like Blackrock. It's nobody large corporation in the wall. Yeah, and now Republicans don't like Blackrock. So they were able to kind of do this great, uh, you know, sort of pivot to where they're the you know, they're the people that are opposing you know, corporate power, and they're the ones that are doing corporate accountability, which you know, and it isn't really true, but it does it does kind of scramble their opposition
in a way. Who's who's used to being the people that stand up for the people against against large corporations, and now it kind of looks like they are, you know.
So interesting. Did you do get any sense of like what happened that made them go from thinking this is a handy tool too, this is a threat. Did you get any sense of that from any of these documents or just from you know, being immersed in it in general? Yeah?
Sure, I mean you have to look at who's behind the State Financial Officers Foundation, you know, I mentioned ALEC Heritage. Yeah, so they've played really key roles in all of this, and you know, they're dark money groups, so we don't actually know who's funding them behind the scenes, but we do know that, you know, these are the places that a lot of these larger quote unquote culture war messaging
sort of campaigns come from. You know, so I think large national groups basically saw a political advantage to going after this, and as they did their thing, as they did polling, as they did you know, as they did the various measurements that they do, they kind of saw
that it was it was being rather successful. So I think that it was really you know, like I said, these large national dark money political groups that saw this as a as a as a powerful tool, and it kind of filtered down into the state level because of that, because you know, you have to look at this sort
of incentive structure that these state treasurers have. If they talk about wote capitalism, suddenly they're going to the big Heritage Foundation meeting with all of the biggest funders in the Republican Party in d C. You know, sfof got a huge award from Heritage Foundation this last year, and they took a lot of key treasures with them, you know, to this big meeting where they you know, were feeded by you know, some of the biggest you know funders around.
So politically, for these state treasurers, it's a great deal to get attention for doing something like this. They get to go on Tucker Carlson, you know, so you know, they have an incentive to do this since it's being supported by Heritage and now like and others.
It makes me wonder too if maybe they sort of realized or noticed that this was an area that would be less I don't know, like less touched by the whole litigation strategy. You know, Like I know, I've heard people talk about, well, if policy fails and litigation is getting you know, ultimately gummed up at the Supreme Court, we should be leaning on the fed right to like
embrace certain financial policies. And it makes me wonder if these groups start like we're like, Okay, what's the one place that's not really touched by by our court strategy, and it's it's finance and insurance. I wonder if they're if they're looking at the insurance industry as part of this too. When I say they, I mean like Heritage and ALEC and all of those groups.
Yeah, that's a great question. I would say. You know, they kind of are very upfront about why the treasures, why finance? And you know Riley Moore, the treasure of West Virginia, who's a real leader of all of this, was actually on a podcast with the with SFOF, the head of SFOF, and he was talking about why the state treasures are so perfect as a weapon against climate policy, and he said, you know, the attorney's generals, they have
to work through the courts. I speak with the taxpayers money with the stroke of my pen I can change things and it doesn't have to go through the court system. And you know, sure enough, the law that Riley Moore got passed in West and West Virginia this last year, it gave him the power, even more power than the treasurer already had to decide who the state's going to
invest with. And you know, then you saw, you know, just in the last month, Riley Moore kicked you know, five large asset managers out of the state, you know, with that newfound power. So they see the treasurers as this you know, sort of extra judicial you know, power center that they can exploit a little bit. And you know, it obviously fits into a larger you know, right wing strategy of sort of mobilizing down ballot elected officials. So
you know, it fits into this larger trend. But I think the treasures they're in a particularly good place to kind of cause havoc here.
Yeah, yeah, So what impact is having on the financial sector? Are they do you have any sense of like, you know, is JP Morgan like, oh no, maybe we should rethink this strategy because we're getting kicked out of West Virginia or are they like whatever, this is not a big deal to us.
It seems like they don't know how to handle the pressure. You know. I mean, these giant asset managers, they're so big, they're so used to being the giant, you know, the biggest fish in the in the pond.
Yeah, like calling the shots, right, Like I mean, usually it's like everyone competing for their business, not them having to worry about who wants to do business with them. So yeah, that's interesting. So yeah, sorry I interrupted you, but you were saying they're not sure how to handle it.
No, yeah, no, that's exactly right. Yeah, So I mean we get I get the feeling that, you know, Blackrock, they just don't they don't know what to do with this criticism. You saw them after the Texas law was passed. You saw them hire lobbyists for the time in Texas. Who did they hire. They hired oil and gas industry lobbyist. What did they do. They went around to you know, key Texas officials and said, you know, we love oil and gas. Here's all of our oil and gas investments.
We're always going to continue to invest in oil and gas. You know, you saw them do that in other states as well, so you know, you do see remarkable change in tone. I'd also say, you know, in West Virginia, you know, we just I just mentioned that Riley Moore kicked out five or said that, you know, these five large asset management companies can no longer do business with
the state. Well, there were six asset management companies that were under review, right but one one company, US Bank Court apparently walked back their climate stances enough to continue to be able to do business with the state, you know, and and Riley Moore and others, you know, considered this a huge win obviously because they've forced you know, US Bank Corp. To you know, change in some way. And we don't have all the details on that yet, but you know, US Bank Corp. Was not put on the
boycott list. So yeah, I mean, I think that there are definitely changes happening as a response to this campaign, and I think that's why we'll see this kind of campaign continue. You know, I don't think that this is by any means.
Over And I mean, what kind of impact can this have on taxpayers in the state if you know, large pots of capital are suddenly like not not at play in their state.
Yeah, well that's kind of you know, this is where we get to like how this is also bizarre because you know, there was a big study that just came out that was looking at the Texas law and looking at the changes that Texas is making in response to that law and in response to state investments, and pensioners in Texas are set to lose like hundreds of millions
of dollars because of this. So it is actually really hurting, you know, the people that are trusting these publican states with their pensions and with their investments.
Can they be sued then for that under the like what is it ezvere laws where like the people in charge of pensions have to be acting, you know, in the best interests of returns for the people enrolled in those pensions.
Yeah, I don't know, that's a great question. But you know, that's another side of this whole campaign is that they're actually also mobilizing attorneys generals to say it is illegal, it is against the fiduciary duty to take into account these climate disclosure rules. So if you as a pension fund this happened to Kentucky, if you as a pension fund, you know, are talking about ESG and other climate disclosure rules and making decisions off that you are you are violating your conduciary duty.
That's so interesting because I feel like that could just be easily disproved by objective data on like financial performance, right, you know, where you could say, well, actually, this fund that consider these things outperformed this fund that didn't, you know, buy x percent or whatever. That's so interesting, that's really really interesting.
Well, we're just going back to the sort of the climate like the really straight up climate science denial that undergirds a lot of this. I mean, I guess, I guess I just don't know how much reality right they
sent to this, you know what I'm saying. I mean, And it's also just so blatantly hypocritical because you know, that's what they're accusing, you know, these large asset management funds of doing is you know, is hurting the people that are invested in them by not investing enough in fossil fuels when you know it's the exact opposite, right, true.
Yeah, Like I think it's it's interesting, right because it's like, oh, we're going to just change this reality by pretending it's not true. I mean, that's kind of across the board of thing with these folks. But it's wild to see it in the financial space. I think it's like particularly strange to it in a space it's not many like numbers and objective data.
You know.
Wow.
Yeah, And I don't know if you feel this way, but you know, I mean because you've you've done so much amazing work on climate science denial and sort of all the contours of that. But you know this this honestly, it feels like an older It feels like science denial from ten years ago or something. You know, it does, it does.
It's really weird that it's working so well. I forgot to ask you how are treasurers? Are they appointed or are they elected?
It changes state to state. Most treasures are elected officials. There most treasures are sort of constitutional constitutional officials where you know they're elected separately and you know their job is sort of written into the state's constitution. There are a couple of states that are appointed, like Georgia's treasurers appointed. But that's that's more the exceptions in the rule.
Okay, So is there any for to either from on the you know, Republican side, to get more you know, Republican treasures elected, or on the Democrat side to try to take back some of these positions.
Well, that's certainly something that we're watching as the midterms come up. You know, there's a number of sfo F treasurers that are up for reelection or you know moving, you know, trying to get electric position. So you know, I think that it's going to be a really interesting space to watch.
Hot state treasure race. Not a thing we've ever really paid attention to. Now we need to Wow wow, Yeah, so interesting, awesome. Is there any kind of aspect of this we didn't talk about that you think is important to draw people's attention to.
Well, I mean, I think there's a couple of interesting things. One, you know, you mentioned Strive asset Management and the back Ramaswami earlier, and we didn't really get a chance to talk about that. But it's a really kind of fascinating subtext all of this is that there are these you know, people that are really important in this greater campaign against
climate disclosure. You know, so there's sort of the big talking heads of the campaign, but they also have for profit entities that are set to profit from this campaign to drive money away from Blackrock. In the case of Vivek Ramaswami, you know, he set up this group called Strive Asset Management, which is the unwoke asset manager manager.
So so while Vivek has spent the last two years, you know, helping orchestrate this campaign to drive West Virginia and other states to divest from Blackrock, he also set up a company that's waiting there with open arms to catch the money that he's shaking out of the tree.
Didn't like a lot of the founding capital for Strive come from Peter Thiel.
Yes, right, yeah, roads back to Peterfield. Yes, no, you know he did. And he's also hired a bunch of of the you know, the people that have really undergirded
this anti climate campaign for a long time. You know, he's hired people from these other dark money groups that are really well connected in this sort of network, so that you know, the circle is complete between the nonprofit political organizations that are campaigning to push black Rock out of these states and the for profit side that's sitting there waiting for the money. You know, they're they're literally
the same people. And I feel like with these sort of you know, quote unquote culture war issues, you don't see the profit motive that clearly all the time so that's another really interesting piece about this. And then nonprofit motive. I think the other thing to talk about would be, you know, the fossil fuel industries precipason in this right. There's been other efforts obviously to kind of mobilize you know, sort of the culture warriors to the defense of the
fossil fuel industry. I don't think it's ever been as successful as it is now. But you know, we in our research, we saw the American Patrolling Institute, the largest you know, fossil fuel lobbyists in the country, having meetings with sfof you know, like helping support their messaging, you know, giving these treasures pats on the back for the good
work that they're doing. And you know that's another instance of this you know, obvious profit motive undergirding this campaign that you know is about you know, opposing China and communism and capitalism and stuff.
The China thing is such an old talking point too. It's just like, yeah, yeah, is there any sense given that this Riley More guy is is West Virginia's state treasure? Is there any sense that this any of this stuff has had an impact on Joe Mansion's kind of persistent obstructionism on climate policy.
Yeah, that's a great question. I mean, you know, West Virginia, the political world there is actually like it's kind of small, you know, so you know, I mean we see people that are have been close the aligned with Joe Manscheen for a long time that have become lobbyists that are sort of involved in this effort. You know, we don't know, you know, we obviously don't know what Joe Manchen thinks about this or what Riley Moore, you know, how Riley Moore wants to use you know, Joe Manchen if he
does to help accomplish this campaign. But there's you know, I mean there is, there's overlapping personnel there. But yeah, we just don't have a ton of information on that.
Yeah. Yeah, awesome. All right, Well I appreciate you walking me through it and also just doing all this work in general. Will link to the investigation in the show notes so people can go check that out. It's so interesting and it's just like this totally new area that I don't think anyone has been paying attention to. So so yeah, appreciate you drawing folks attention to it.
Yeah, Well, thank you very much. Yeah, it's a pleasure to talk to you.
Drilled is an original critical frequency production, mixing, mastering, and original music by Peter Duff. The show is reported and written by me Amy Westervelt. Our First Amendment attorney is James Wheaton of the First Amendment Project. Our artwork is done by Matthew Fleming. You can find us online at Drilled podcast dot com, where we post various articles related to the podcast, as well as transcripts of episodes. You can also follow us on Twitter at we are Drilled
or me at Amy Westervelt. Thanks for listening and we'll see you next week.