- Austin Knudsen, Montana Attorney General, wrote to NAAG executive director Brian Kane on Wednesday alleging the organization lost $37 million last year
- He singles out the NAAG for investing in ‘ESG-linked investments’
- Knudsen says he will sue the NAAH unless money ‘that belongs to Montana’ is returned
Montana‘s top lawyer has threatened legal action against the Nation Association of Attorneys General over environmental, social and governance investments that it’s claimed have lost tens of millions of dollars.
Austin Knudsen, Montana Attorney General, wrote to NAAG executive director Brian Kane on Wednesday 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 AG’s and their families’ and says it is ‘acting like an unaccountable slush fund’.
The NAAG is a nonprofit organization for America’s state and territory attorneys general. It ‘provides a community for attorneys general and their staff to collaboratively address issues important to their work, as well as training and resources to support attorneys general in protecting the rule of law and the United States Constitution’.
The NAAG receives annual membership fees of $3.2 million from member offices, which is paid with tax dollars.
Knudsen 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.
‘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.
Critics say prioritizing ESG over profits has harmed investment and pension funds. ESG funds underperformed the wider S&P 500 last year.
Knudsen pulled out of the NAAG last year, claiming the organization had taken a ‘leftward shift’ that made it ‘intolerable’.
Earlier this month, Kansas AG Kris Kobach asked the NAAG to disclose its investments to ‘combat the corrosive ‘ESG’ practices of investment firms and other players in the financial industry’.
‘These practices destroy shareholder value in pursuit of faddish ideological aims, often without proper disclosure to investors,’ Kobach said.
The NAAG has about $220 million assets under management. It sometimes lends money to attorneys general to pursue lawsuits, then recovers the money when cases are complete.
Republicans have also attempted to curb the growing use of ESG principles by federal agencies as they spend taxpayers’ money.
Legislation has been introduced that would prevent federal agencies from requiring contract applicants to disclose the amount of greenhouse gases they emit.
It is part of a push to prevent federal agencies promoting green energy or ‘woke causes’ in the same way that investment firms such as BlackRock are basing decisions on ESG principles.
Oramel Skinner, executive director of Alliance for Consumers, praised Knudsen for his recent NAAG intervention.
Skinner said: ‘NAAG has a track record of hiding the ball from its members, and playing games with its money, including investing in foreign stocks, financing foreign trips, and acting like an unaccountable slush fund.
‘We’ve been calling this behavior out and stand ready to support General Knudsen and any other Attorneys General who take action to protect their public money.’
