A protester holds an indication during a youth climate strike outside of the BlackRock offices on December 06, 2019 in San Francisco, California.
Justin Sullivan | Getty Images
A gaggle of Republican state financial officers gathered last February at a Hyatt hotel in downtown Latest Orleans to take aim at one in all the party’s corporate enemies: BlackRock CEO Larry Fink.
One panel hosted by Republican Utah Treasurer Marlo Oaks posed a matter increasingly uttered by congressional Republicans and and prospective GOP presidential candidates in recent months, in response to an agenda obtained by the Center for Media and Democracy and later reviewed by CNBC.
The panel’s description asked: “Who’s more vital: shareholders or stakeholders? Is the ‘stakeholder capitalism’ being sold by Larry Fink and other investors really stakeholder politics?”
The conference was organized by the conservative leaning State Financial Officers Foundation, a tax exempt 501(c)(3) nonprofit group that doesn’t publicly disclose its donors. The group is at the middle of a growing network of organizations aligned with pockets of the Republican Party which have grown more comfortable criticizing investing firms equivalent to BlackRock, Vanguard and State Street for what critics call politically motivated investing plans.
A 12 months after the panel in Latest Orleans, incoming House GOP committee chairs and GOP White House hopefuls equivalent to former President Donald Trump and Florida Gov. Ron DeSantis have put Wall Street’s environmental, social and governance investing policies near the highest of their political hit lists. The Senate is set to vote Wednesday on a measure to dam the Biden administration from allowing retirement plans to think about ESG aspects of their investments.
Greater than a half dozen conservative groups have helped to drive the criticism of Wall Street’s ESG investing methods — and a few have little-known ties to longtime conservative donors or lawyers who’ve aided Trump himself.
Members of the State Financial Officers Foundations are all powerful state Republican officials, a lot of whom have scrutinized ESG practices or pulled back billions of dollars from investing firms. They include Oaks, who last 12 months announced he would move $100 million in state funds from BlackRock to other money managers, and Florida’s GOP Chief Financial Officer Jimmy Patronis, who in December said the state treasury would pull out $2 billion in assets previously managed by BlackRock.
A representative for the State Financial Officers Foundation didn’t return a request for comment.
Behind the scenes, a bigger network of conservative interest groups helps to fund the organization’s events or send representatives to attend.
Conservative leaning groups including the 1792 Exchange, the Heritage Foundation, Consumers’ Research, American Legislative Exchange Council and Mercatus Center, were among the many attendees of the private February meeting of the State Financial Officers Foundation in Latest Orleans, in response to the attendee list reviewed by CNBC.
A few of those organizations participated in an analogous State Financial Officers Foundation gathering in Washington D.C. in November 2022, in response to an agenda. The meeting in D.C. focused, partially, on pushing back on ESG investment standards. The inspiration announced on the time a targeted ESG campaign that features an internet site and an initial six-figure digital marketing effort.
Considered one of the organizations that attended last February is the 1792 Exchange, a nonprofit sponsor of the State Financial Officers Foundation. The group, which has develop into a key player within the anti-ESG movement, has ties to key Trump allies.
The 1792 Exchange says it intends to “develop policy and resources to guard and equip non-profits, small businesses and philanthropy from ‘woke’ corporations to teach Congress and stakeholder organizations concerning the dangers of ESG (environmental, social, and governance) policies.“ Critics have deployed the vague term “woke capitalism” in response to a broad range of stances taken by corporations that they see as too beholden to liberal politics.
The organization recently published an internet index that grades over 1,000 firms on “policies, practices, and other relevant criteria to find out the likelihood an organization will cancel a contract or client, or boycott, divest, or deny services based on views or beliefs.” The businesses that the group has given a critical “high risk” grade include BlackRock, Vanguard and State Street.
The 1792 Exchange doesn’t report on its website who its founders are, and the group’s president, Paul Fitzpatrick, wouldn’t reveal the identity of those that formed the organization.
Nathan Estruth, a former vice chairman at Procter & Gamble, said this 12 months that he was a co-founder of the 1792 Exchange. Estruth was among the many group’s representatives on the State Financial Officers Foundation’s February 2022 national meeting in Latest Orleans.
Estruth has played a varied role in GOP politics in recent times. He ran a failed bid to develop into lieutenant governor of Ohio in 2018. He has also given money to conservative groups, including a $10,000 donation last 12 months to the Women Speak Out PAC, an excellent PAC and partner of the anti-abortion group Susan B. Anthony Pro-Life America.
Records show the 1792 Exchange also has early ties to Cleta Mitchell, an attorney who worked with Trump as he tried to overturn the 2020 presidential election, and Ken Blackwell, a Republican former Ohio secretary of state. Fitzpatrick told CNBC that neither Mitchell nor Blackwell have a current role with the 1792 Exchange.
In 2021, Mitchell was listed as secretary and Blackwell as director of Constitutional Congress Inc., the name by which the 1792 Exchange was previously known, in response to financial forms filed to the Internal Revenue Service and obtained by CNBC. The unique group, which said it focused on educating the general public and lawmakers concerning the Structure, modified its name to the 1792 Exchange last 12 months and shifted its focus to fighting corporate policies, in response to Delaware state business records.
“Constitutional Congress was formed to teach officials and residents on various issues, and the 1792 Exchange carries on that mission nevertheless it is giving attention to retiree and likewise shareholder issues,” Fitzpatrick told CNBC.
Fitzpatrick, who provided CNBC with the group’s 2021 forms filed with the IRS, didn’t offer its 2022 documents because they’ve not been filed yet.
Each Mitchell and Blackwell have ties to Trump’s efforts to spread conspiracies concerning the 2020 election. Mitchell worked on the previous president’s scheme to overturn 2020 state election results.
Meanwhile, Blackwell is the chair of the Trump-aligned America First Policy Institute’s Center for Election Integrity, which was created after Trump’s failed try and get reelected in 2020. It has challenged the integrity of the U.S. election system. He was also a part of Trump’s controversial Presidential Advisory Commission on Election Integrity, which the previous president created shortly after the 2016 election.
Mitchell declined to reply inquiries to CNBC when asked about her role with Constitutional Congress, and as a substitute ripped this reporter, falsely claiming in an email that he has “never done a single story that won’t successful piece against conservatives.”
Blackwell didn’t return requests for comment.
The sources of anti-ESG funding
A growing list of Republican donors, including other Trump allies, together with a large donor advisory fund have helped to offer funding for the anti-ESG fight.
The State Financial Officers Foundation itself raised $911,000 in 2021, in response to its latest public 990 forms filed with the IRS. An archived webpage from September 2022 shows Consumers’ Research was a “diamond sponsor” of the group.
It counts the 1792 Exchange as a “gold sponsor,” which give $50,000 and receive advantages like access to exclusive events and a column in an e-newsletter, in response to Responsible Investor. The Heritage Foundation, meanwhile, is a “silver sponsor.”
Other previously listed sponsors of the State Financial Officers Foundation include Mastercard, H&R Block, Visa, Fidelity and JPMorgan Chase. Mastercard, Fidelity, Visa and JPMorgan Chase all promote their very own sustainability investment models. None of those firms returned a request for comment.
Tax-exempt 501(c)(3) groups equivalent to Consumers’ Research and the 1792 Exchange aren’t required to release their donors. Nevertheless, documents and news reports offer some clues into who has contributed to those organizations.
Together with sponsoring the financial officers group, Consumers’ Research has also spearheaded attacks against ESG and run multimillion-dollar ad campaigns against BlackRock, including by highlighting the firm’s business dealings with China.
Consumers’ Research received a multimillion-dollar investment from a nonprofit called Marble Freedom Trust, in response to the Wall Street Journal. The group goals to finance the fight against corporate ESG activities, in response to the Journal.
Marble Freedom Trust is led by former Trump judicial advisor Leonard Leo, who helped to coordinate campaigns to substantiate the previous president’s Supreme Court nominees. The group received a $1.6 billion donation in 2021 from Barre Seid, an electronics manufacturing mogul, in response to The Latest York Times.
Meanwhile, Constitutional Congress, the precursor to the 1792 Exchange, raised $225,000 in 2021 from anonymous donors. At the least one previous donor to the group could offer a clue into who’s funding the organization because it becomes a key player within the anti-ESG movement.
The National Christian Charitable Foundation, which acts as a donor advisory fund, says on a 990 form that it funneled $6,000 to Constitutional Congress in 2017. A search through ProPublica’s nonprofit database shows only the National Christian Charitable Foundation as a donor to Constitutional Congress and doesn’t list some other contributors. The group received other undisclosed donations, including in 2021.
The inspiration acts a donor advisory fund for contributors who wish to use it to finance other organizations but remain anonymous. The National Christian Charitable Foundation gives out 1000’s of contributions annually: it raised greater than $3 billion and donated $1.5 billion in 2021, in response to a 990 form posted on its website.
When asked concerning the contribution to Constitutional Congress, a spokesman for the advisory fund, Steve Chapman said the group often doesn’t know the intent of donors.
“Unfortunately we do not know the precise purpose of most every grant that NCF distributes, and we do not on this case,” he said.