- At least half a dozen conservative groups target Wall Street asset managers, such as BlackRock, Vanguard and State Street, for their environmental, social and governance investment platforms.
- Some of the organizations sponsor, or attend events held by, an organization of state finance officers that has members who have moved assets formerly controlled by BlackRock.
- Cleta Mitchell, an attorney who worked with former President Donald Trump as he attempted to overturn the 2020 presidential election, is associated with one such group, as is a nonprofit led by Leonard Leo, a former Trump legal adviser.
A protester holds a sign during a youth climate strike outside the offices of BlackRock on December 6, 2019 in San Francisco, California.
Justin Sullivan | Getty Images
A group of Republican state finance officials gathered at a Hyatt hotel in downtown New Orleans last February to target one of the party’s corporate enemies: BlackRock CEO Larry Fink.
A panel hosted by Utah Republican Treasurer Marlo Oaks asked a question that has been increasingly asked in recent months by Republicans in Congress and prospective GOP presidential candidates, according to an agenda obtained by the Center for Media and Democracy and later rated by CNBC.
The panel’s description asked, “Who is more important: shareholders or stakeholders? Is the ‘stakeholder capitalism’ sold by Larry Fink and other investors really stakeholder politics?”
The conference was hosted by the conservative State Financial Officers Foundation, a tax-exempt 501(c)(3) nonprofit organization that does not disclose its donors. The group is the hub of a growing network of organizations affiliated with segments of the Republican Party that are more comfortable criticizing investment firms such as BlackRock, Vanguard and State Street for what critics call politically motivated investment schemes.
A year after the New Orleans panel, new House GOP committee chairs and White House GOP candidates, such as former President Donald Trump and Florida Governor Ron DeSantis, have embraced the environmental, social, and put Wall Street’s managerial investment policies at the top of their political charts. . The senate is will vote Wednesday on a measure to prevent the Biden administration from allowing pension plans to consider ESG factors in their investments.
More than half a dozen conservative groups have contributed to the criticism of Wall Street’s ESG investment practices — and some have little-known ties to longtime conservative donors or lawyers who helped Trump himself.
Members of the State Financial Officers Foundations are all powerful state Republican officials, many of whom have ESG practices scrutinized or billions of dollars withdrawn from investment firms. They include Oaks, who announced last year that he would move $100 million in state funds from BlackRock to other money managers, and Florida GOP chief financial officer Jimmy Patronis, who said in December that the state treasury would withdraw $2 billion in assets. previously operated by BlackRock. .
A representative of the State Finance Foundation has not returned a request for comment.
Behind the scenes, a larger network of conservative interest groups help fund the organization’s events or send representatives.
Conservative groups, including the 1792 Exchange, the Heritage Foundation, Consumers’ Research, American Legislative Exchange Council and Mercatus Center, were among those in attendance at the private February meeting of the State Financial Officers Foundation in New Orleans, according to the list of attendees reviewed by CNBC.
Some of those organizations participated in a similar meeting of the State Financial Officers Foundation in Washington DC in November 2022, according to a calendar. The meeting in DC focused in part on pushing back ESG investment standards. At the time, the foundation announced a targeted ESG campaign with a website and first six-figure digital marketing effort.
One of the organizations in attendance last February is the 1792 Exchange, a non-profit sponsor of the State Financial Officers Foundation. The group, which has become a major player in the anti-ESG movement, has ties to key Trump allies.
The 1792 Exchange says it plans to “develop policies and resources to protect and equip nonprofits, small businesses and philanthropy against ‘awakened’ companies to educate Congress and advocacy groups about the dangers of ESG policies (environment, society and governance).“ Critics have used the vague term “awakened capitalism” in response to a wide range of corporate positions that they believe are overly dependent on liberal politics.
The organization recently published an online index that rates more than 1,000 companies on “policies, practices and other relevant criteria to determine the likelihood that a company will cancel a contract or customer, or boycott, divest or deny services based on beliefs or beliefs.” The companies that the group has given a critical “high risk” rating include BlackRock, Vanguard and State Street.
The 1792 Exchange does not list its founders on its website, and the group’s president, Paul Fitzpatrick, would not reveal the identities of those who formed the organization.
Nathan Estruth, a former vice president at Procter & Gamble, said this year that he co-founded the 1792 Exchange. Estruth was one of the group’s representatives at the February 2022 National Meeting of the State Financial Officers Foundation in New Orleans.
Estruth has played a varied role in GOP politics in recent years. He made a failed bid to become lieutenant governor of Ohio in 2018. He has also given money to conservative groups, including a $10,000 donation last year to the Women Speak Out PAC, a super 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, a lawyer who worked with Trump when he tried to overturn the 2020 presidential election, and Ken Blackwell, a Republican former Secretary of State from Ohio. Fitzpatrick told CNBC that neither Mitchell nor Blackwell have any current roles at the 1792 Exchange.
2021, Mitchell was listed as secretary and Blackwell as director of Constitutional Congress Inc., the name by which the 1792 Exchange was formerly known, according to financial forms filed with the Internal Revenue Service and obtained by CNBC. The original group, which said it focused on educating the public and lawmakers about the Constitution, last year changed its name to the 1792 Exchange and shifted its focus to fighting corporate policies, according to Delaware state corporate records.
“The Constitutional Congress was created to educate government officials and citizens on a variety of issues, and the 1792 Exchange continues that mission but pays attention to retirees and also shareholder issues,” Fitzpatrick told CNBC.
Fitzpatrick, who provided CNBC with the group’s 2021 forms filed with the IRS, has not offered the 2022 documents because they have not yet been filed.
Both Mitchell and Blackwell have ties to Trump’s efforts to spread 2020 election conspiracies. Mitchell worked on the former president’s plan to overturn the results of the 2020 state election.
Meanwhile, Blackwell is the chairman of the Trump-aligned America First Policy Institute’s Center for Election Integrity, which was founded after Trump’s failed bid for re-election in 2020. It has challenged the integrity of the American electoral system. He also served on Trump’s controversial Presidential Advisory Committee on Election Integrity, which the former president created shortly after the 2016 election.
Mitchell refused to answer questions to CNBC when asked about her role in the Constitutional Congress, and instead ripped this reporter apart by falsely claiming in an email that he “never did a single story that isn’t a hit.” against conservatives”.
Blackwell has not returned requests for comment.
A growing list of Republican donors, including other Trump allies, along with a huge donor advisory fund have helped fund the anti-ESG fight.
The State Financial Officers Foundation itself raised $911,000 in 2021, according to the latest public 990 forms filed with the IRS. An archived webpage from September 2022 shows that Consumers’ Research was a “diamond sponsor” of the group.
It counts the 1792 Exchange as a “gold sponsor,” giving $50,000 and receiving benefits such as access to exclusive events and an e-newsletter column, according to Responsible Investor. The Heritage Foundation, meanwhile, is a ‘silver sponsor’.
Other previously mentioned 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 own sustainable investing models. None of these companies have returned a request for comment.
Tax-exempt 501(c)(3) groups such as Consumers’ Research and the 1792 Exchange are not required to disclose their donors. However, documents and news reports offer some clues as to who contributed to those organizations.
In addition to sponsoring the group of financial officers, Consumers’ Research has also advanced attacks on ESG and conducted multimillion-dollar advertising campaigns against BlackRock, including highlighting the company’s business ties with China.
Consumers’ Research received a multi-million dollar investment from a nonprofit organization called Marble Freedom Trust, according to the Wall Street Journal. According to the Journal, the group aims to fund the fight against corporate ESG activities.
Marble Freedom Trust is led by former Trump legal adviser Leonard Leo, who helped coordinate campaigns to confirm the former president’s Supreme Court nominees. The group received a $1.6 billion donation in 2021 from Barre Seid, an electronics manufacturer, according to The New York Times.
Meanwhile, the Constitutional Congress, the predecessor of the 1792 Exchange, raised $225,000 in 2021 from anonymous donors. At least one previous donor to the group could provide a clue as to who is funding the organization as it becomes a major player in 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 the Constitutional Congress in 2017. do not list other contributors. The group received other undisclosed donations, including in 2021.
The foundation acts as a donor advisory fund for donors who want to finance other organizations but who want to remain anonymous. The National Christian Charitable Foundation makes thousands of contributions each year: It raised more than $3 billion and donated $1.5 billion in 2021, according to a 990 form on its website.
When asked about the contribution to the Constitutional Congress, a spokesman for the advisory fund, Steve Chapman, said the group often does not know the intent of donors.
“Unfortunately, we don’t know the specific purpose of almost every grant that NCF gives out, and we don’t know in this case,” he said.