Oklahoma lawmakers advanced legislation that could “gut” a three-year-old anti-ESG law, and leave state taxpayers vulnerable to environmental, social, and governance-based investing, Heritage Action for America contends.
The Oklahoma Senate Energy Committee recently advanced SB 714, sponsored by state Sen. Dave Rader, which amends the existing law on state contracts and transfers enforcement authority from the state treasurer to the state attorney general. A House version is sponsored by Speaker Pro Temp Anthony Moore. Both lawmakers are Republicans.
“It’s in a lawsuit now and we just want to make some corrections so it’s not in a lawsuit,” Rader told The Daily Signal in a phone interview. “We are being proactive to keep the bill applicable.”
The 2022 Energy Discrimination Elimination Act bans state investments with companies that boycott or penalize energy companies for lawful action, according to Heritage Action. Oil and gas companies are key to the Oklahoma economy.
In July, Oklahoma District Court Judge Sheila Stinson issued an order to permanently block the law, stemming from a legal challenge by a state pensioner. The case is pending an appeal in the state Supreme Court.
Rader argued enforcement of the anti-ESG law should have been with the attorney general in the first place.
Under the 2022 law, the Oklahoma state treasurer, currently Todd Russ, keeps a list of financial institutions that boycott oil and gas companies and creates a schedule for state governmental entities to divest from the companies that include BlackRock, Wells Fargo, JPMorgan Chase, and Bank of America.
BlackRock has been among the largest boosters of ESG pressure on companies.
The state Senate bill would transfer enforcement authority to the state attorney general, currently Gentner Drummond. Drummond is handling the appeal. It would also change disclosure and judicial provisions for state governmental entities.
Heritage Action counters the bill would “gut the EDEA and return power back to woke finance and climate activists.”
“The changes SB 714 makes to the EDEA would again allow taxpayer dollars to subsidize the demise of Oklahoma’s economic interests by empowering asset managers to use Oklahoma dollars to fund the Left’s agenda,” Heritage Action says in a statement.
The bill also creates loopholes for government agencies to ignore the law to divest companies if there are “transaction costs.” Any divestment will have some “transaction cost,” but the bill doesn’t require the costs be weighed against the significant cost to the state for subsidizing ESG, according to a bill analysis from Heritage Action.
Rader was not familiar with this during the call, but he said state agencies have been reluctant to enforce because of the litigation.
“Some state agencies are hesitant to do anything with the law because they only want to maximize the investment, and they worry about the legal ambiguity,” Rader said. “That’s why we want the attorney general. It’s not really a treasury matter.”
Russ, the state treasurer, opposes the legislation. It would allow “financial firms could continue discriminatory practices under weakened enforcement,” the treasurer’s spokesperson Lara Blubaugh said.
“The result could delay accountability, the attorney general’s office lacks the expertise and immediate oversight needed to track and respond to financial discrimination effectively,” Blubaugh continued. “The office has a structured, consistent process for managing state funds, investments, and financial relationships; moving oversight to the attorney general’s office adds uncertainty along with a century’s long-tested constitutional process.”
Past comment by Drumond suggests a faceoff between the two GOP officials.
In a December statement, after making the appeal to the state’s high court, Drummond faulted the state treasurer’s office for losing in a lower court.
“There is a great deal of lost ground to make up on this litigation after the treasurer and his hand-picked legal counsel failed in district court,” said Drummond. “I will not let that failure deter my efforts to protect Oklahoma’s oil and gas industry from discriminatory practices by financial entities kowtowing to a radical environmental agenda.”
