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Economy and Society: July 5, 2022- SCOTUS ruling impact on SEC

Economy and Society is Ballotpedia’s weekly review of the developments in corporate activism; corporate political engagement; and the Environmental, Social, and Corporate Governance (ESG) trends and events that characterize the growing intersection between business and politics.


ESG Developments This Week

In Washington, D.C.

Did the Supreme Court throw a wrench into the SEC’s plans?

On June 30, the Supreme Court of the United States released its ruling in the case of West Virginia v EPA. Although the Court did not go as far as some observers were expecting by overturning or limiting the doctrine of Chevron deference, by which courts are expected to defer to administrative agencies in their interpretations and enforcement of statutes that are vague, it did strike a blow against agencies’ ability to regulate beyond the scope of their legislative mandates.

SCOTUS restrained the EPA and limited its powers to regulate climate change emissions under the major questions doctrine, which enjoins the agency (and, by extension, other agencies) from attempting to impose new regulatory schemes in the absence of an explicit mandate from Congress. Specifically, the Court said that the Clean Air Act of 1970 did not give the EPA the ability or the mandate to regulate C02. Therefore, neither the EPA nor other agencies not specifically charged with that task are able to undertake that task, unless Congress acts first.

According to some ESG commentators, the ruling raises questions about the Securities and Exchange Commission’s authority to demand corporate disclosure of climate change-related information. Those questions are in addition to existing others analysts have asked about the SEC’s mandate, including many that were expressed in the public comments posted in response to the SEC’s proposed rule. If under the major questions doctrine, some have argued, the EPA is not allowed to regulate C02 without a specific mandate from Congress, then the SEC’s power to do something similar could potentially be questioned. Some observers argue that the ruling will curtail the powers claimed by the SEC in its final rule, while others believe that the Commission will be challenged upon the release of that rule on the grounds that it has exceeded its regulatory authority:

“The U.S. Supreme Court‘s decision to limit the Environmental Protection Agency’s power to regulate greenhouse gas emissions has raised questions about whether the decision could impact the Securities and Exchange Commission (SEC) proposal to force companies to disclose their emissions.

Thursday’s ruling restrained the EPA’s authority to regulate power plant emissions, raising doubts about other federal agencies’ authority under the Biden Administration’s mandate to regulate companies’ greenhouse gas emissions.

That could potentially impact the SEC, which is drafting a controversial new rule requiring public companies to disclose their direct and indirect greenhouse gas emissions.

Former SEC attorney Walé Oriola, counsel at Faegre Drinker, said that “under the principle leaned on by the high court in the EPA case, the SEC should be cautious as it approaches finishing its climate disclosure rules. I think the EPA ruling would influence what requirements makes it into the final version of the rulemaking.”…

Some climate change activists and shareholder rights groups do not believe the Supreme Court ruling will derail the proposal. “We do not think yesterday’s SCOTUS rule on EPA Clean Air Act will have an impact on any court challenge to the SEC proposed rule on climate disclosure,” Andrew Behar, CEO of As You Sow, a Berkley, Calif.-based nonprofit that promotes corporate responsibility through shareholder advocacy, told Financial Advisor magazine.

“The new SEC rule that will require corporate disclosure be accurate, verified and included in the audit is the most basic requirement of good governance and commerce. It simply ensures trust between companies and their shareowners,” Behar said.

But John Pendergrass, vice president for programs and publications at the Environmental Law Institute, an independent nonprofit based out of Washington, D.C., disagreed. “Although the court’s decision in West Virginia v. EPA doesn’t directly affect the SEC climate disclosure rule, it certainly suggests the SEC, as well as every other agency, needs to emphasize the clear statutory basis for any new rule. The boundaries of the major questions doctrine are simply unclear at this time,” Pendergrass said.”

BlackRock Investment Institute chairman announced among selections for the U.S. Department of State’s Foreign Affairs Policy Board

On June 22, the Biden State Department announced its “selections for the U.S. Department of State’s Foreign Affairs Policy Board,” which is tasked with providing “independent advice on the conduct of U.S. foreign policy and diplomacy, consistent with each Secretary of State and administration’s evolving priorities for it.” Among those named was the co-chair, Tom Donilan, who is also an employee of BlackRock, the biggest player in the ESG world, and one of the people responsible for a high-profile ESG-related investment recommendation issued last year:

“The Biden administration’s pick to advise the State Department on “strategic competition” with Beijing chairs an investment think tank that urged Americans to triple their investments in China.

Secretary of State Antony Blinken on Friday selected BlackRock Investment Institute chairman and Obama administration national security adviser Tom Donilon to co-chair the Foreign Affairs Policy Board amid the State Department’s pivot to China.

Donilon’s work at BlackRock could pose a conflict of interest for the board, which provides “advice, feedback, and perspectives” to senior State Department officials on foreign policy matters. Under his leadership, the Investment Institute has urged investors to dramatically increase their stakes in Chinese companies. What’s more, BlackRock views “strategic competition” with China as bad for the company’s bottom line.

“Strategic competition between the U.S. and China and resulting tensions have also contributed to uncertainty in the geopolitical and regulatory landscapes,” reads BlackRock’s most recent annual report. The firm listed U.S.-Chinese competition as a factor that could hurt its revenue and profit. BlackRock opened a mutual fund in China in September, making it the first American firm approved to sell financial products there….

Donilon has sided with China in the debate over tariffs imposed during the Trump administration. He chided government officials in 2019 about the tariffs and inaccurately warned that they would cause a global recession.

“Future generations of Americans will judge today’s leaders harshly for squandering this moment,” Donilon wrote in an article touted by China Daily, a mouthpiece for the Chinese Communist Party….”

On Wall Street and in the private sector 

The Federalist: ESG ratings discrepancy favors China over USA

In a June 28 piece published by The Federalist, Chuck Devore, a conservative commentator and the vice president of national initiatives at the Texas Public Policy Foundation, compared ratings issued by ESG giant MSCI for American companies and those issued for Chinese companies. Devore argues that his comparison shows a discrepancy that favors Chinese companies and, in his view, betrays the spirit at the heart of the ESG movement:

“MSCI is one of the world’s largest investment support services firms, with $2.1 billion in revenue. It offers an ESG rating service. I noticed that my Charles Schwab account recently started to display MSCI’s ESG ratings alongside that of the more traditional ratings services — services focused on a company’s profitability.

Curious, I looked into the rating of a firm I own some stock in: Texas-based Brigham Minerals (NYSE: MNRL). Brigham looks for land that could produce oil and gas, and owns mineral and royalty interests in 7,909 oil wells and 688 natural gas wells in West Texas, New Mexico, Oklahoma, Colorado, Wyoming, and North Dakota. MSCI rates Brigham Minerals as a B, the sixth lowest of seven ratings that range from AAA to CCC, labeling it a “laggard” in the industry with an overall score of 2 out of 10….

I looked up three China-based energy companies and compared them to Brigham Minerals. They were Xinyi Solar Holdings (OTC: XISHY), China Resources Gas Group (OTC: CGASY), and China Coal Energy Company (OTC: CCOZF). All three beat the American energy company in their overall rating.

China Coal Energy is 58.36 percent owned by China National Coal Group, a state-owned enterprise. China Coal Energy owns 12 coal mines, 13 coal-processing plants, five coking plants, four coal mining equipment manufacturing plants, and two mine design institutes. They’re really into coal….

China Resources Gas Group mostly invests in natural gas pipelines. It’s a subsidiary of China Resources Holdings Company, a state-owned company….

MSCI generously rates China Resources Gas as an “A” — the third-best of seven grades, with better grades than Brigham in both the environment, 7.7 to 0.8, and social, 7.6 to 3.5….

Xinyi Solar Holdings should be problematic for MSCI — after all, China’s solar power industry, a global juggernaut, is a heavy user of materials produced by slave labor in Xinjiang, a Muslim-majority region formerly known as Turkestan where the Chinese communist government has been engaged in a grinding genocide. MSCI even has a corporate statement against “modern slavery” on its website, claiming that the firm “is committed to protecting human rights globally… Specifically, the Firm strongly opposes slavery and human trafficking and will not knowingly support or conduct business with any organization involved in such activities.”

This is at odds with MSCI’s ESG rating of Xinyi Solar — an “A” — with scores of 8.1 for environment (heavy metal pollution aside, apparently), 5.6 for social, and 2.6 for governance. Overall, Xinyi scores a 6.1 of 10 compared to 2 for the Texas firm.

That a firm in China that relies on slave labor for key portions of its supply chain has a better social score than an American firm that pays landowners who freely sell them their mineral rights betrays an upside-down ethic where freedom is slavery and ignorance is strength.”

Shareholders are less likely to support ESG initiatives than they were last year

For a variety of reasons​​including new SEC rules and an ongoing interest in ESGAmerican companies faced a record number of environmental and social-focused shareholder proposals during the just completed annual-meeting season. But despite the record number of proposalsor, perhaps, because of itshareholders overall were less likely to support such initiatives than they were last year:

“U.S. companies faced a record number of shareholder votes on environmental and social issues this year, but investor support was lukewarm for proposals calling for more ambitious climate targets.

Shareholder proposals called on companies to stop financing fossil fuels, reduce plastic waste and assess their positions on racial justice, among other issues, according to a review of the filings by The Wall Street Journal….

Shareholders have so far voted on a record 274 sustainability-related proposals this year, up 41% from last year, according to the Sustainable Investments Institute, a nonprofit that tracks such activities. About three dozen more votes are expected by the end of the year.

But overall support was muted. Despite the record number of proposals going to a vote, average support fell to 27% from 32% last year, the Sustainable Investments Institute said….

The drop in overall approval for ESG-related proposals partly reflects low support for a wave of new anti-ESG proposals from conservative groups, which are also included in the data, said Heidi Welsh, executive director of the Sustainable Investments Institute.

For instance, 10 votes asked companies, including AT&T Inc. and Levi Strauss & Co., to report on risks arising from efforts to tackle racial inequality. The proposal at AT&T drew the most support, with nearly 4%.

Ms. Welsh said requests that were more ambitious also contributed to the overall decline. “New proposals always get less support,” she said.

Proposals are increasingly asking companies to hit goals in specific ways, rather than merely calling for targets or disclosures. Ms. Welsh pointed to nine first-time votes calling on major U.S. banks and insurers to stop financing fossil fuels. They earned an average of 12% support, and none passed….

Mark van Baal, founder of shareholder advocacy group Follow This, which filed the resolutions, said the meager support shows concerns over energy security are trumping climate.”



Union Station: Public-sector labor policy litigation four years post-Janus

Note: The next edition of Union Station will be on July 8. In the meantime, have a happy Fourth of July!

Public-sector labor policy litigation four years post-Janus

June 27 marks the fourth anniversary of the Supreme Court’s Janus v. AFSCME decision. The court held that public-sector unions may not require non-member employees to pay agency fees covering the costs of non-political union activities, overturning precedent established in 1977.

Since late 2019, Ballotpedia has tracked close to 200 federal lawsuits related to public-sector labor policy. Today, we’ll take a look at the state of public-sector labor policy litigation four years after Janus, as well as highlight some recent cases we’ve been watching. 

Overview

Most of the lawsuits we’ve tracked since Janus have asked one or more of the following questions: 

  • Whether public-sector unions can be held liable for refunding agency fees paid before Janus
  • Whether public-sector unions may continue to collect union dues from an employee who leaves the union if there is a pre-existing agreement that membership or dues authorization may only be revoked during a certain window; 
  • Whether exclusive bargaining representation laws violate non-union members’ First Amendment rights; 
  • Whether mandatory bar association dues should be reconsidered in light of Janus.

We’re also tracking lawsuits in which public-sector unions challenge state or federal laws and policies. 

The map below shows the cases we’re tracking by the U.S. district court in which they originated. The three districts with the highest number of cases are the Middle District of Pennsylvania (18 cases), the Central District of California (17 cases), and the District of Oregon (13 cases).

Here’s the breakdown by circuit:

And by case status (pending cases are divided by court level, and cases that have been dismissed, settled, or otherwise resolved are counted together):   

Finally, this chart shows the cases we’ve tracked since 2019 by the year the case was originally filed:

Case highlights: Lawsuits filed by workers

Here’s a look at three recent worker-filed lawsuits we’ve been watching:

  • Adams v. Teamsters Local Union 429 (21-1372)
    • Four Lebanon County, Pennsylvania, public employees sued Teamsters Local 429, the county, the state attorney general, and the state labor board in the U.S. District Court for the Middle District of Pennsylvania on Feb. 27, 2019. The workers sought a refund of union dues collected before and after Janus, challenged the constitutionality of the state’s exclusive representation law, and the constitutionality of limiting union resignation to a 15-day window. 
    • On March 31, 2020, Judge Sylvia Rambo dismissed the case.
    • On Jan. 20, 2022, the U.S. Court of Appeals for the Third Circuit affirmed the district court’s ruling. 
    • The plaintiffs filed a petition for a writ of certiorari to the Supreme Court on April 20, 2022. 
    • The Supreme Court requested a response from the defendants by Aug. 24, 2022 
  • Hoekman v. Education Minnesota (21-01366):
    • On June 18, 2018, two public school teachers filed a class-action complaint in the U.S. District Court for the District of Minnesota challenging the constitutionality of agency fees before the Supreme Court’s ruling in Janus. In an amended complaint filed in October 2018, the plaintiffs sought a refund of fees the union had collected and challenged the union’s limiting resignation to a seven-day window. 
    • On Feb. 12, 2021, Judge Susan Richard Nelson ruled in favor of the defendants. 
    • The plaintiffs appealed to the U.S. Court of Appeals for the Eighth Circuit on Feb. 16, 2021. Oral argument was held on Feb. 16, 2022.
  • O’Callaghan v. Napolitano (19-56271):
    • Two University of California employees filed a complaint in the U.S. District Court for the Central District of California on March 27, 2019, challenging the constitutionality of limiting dues authorization revocation to a 15-day window and the constitutionality of exclusive representation.
    • Judge James Selna ruled in favor of the defendants on Sept. 30, 2019.
    • The plaintiffs appealed to the U.S. Court of Appeals for the Ninth Circuit on Nov. 1, 2019. A three-judge panel affirmed the district court’s decision on April 28, 2022. 
    • The court denied the plaintiffs’ petitions for a panel rehearing or rehearing en banc on June 6, 2022. 

Case highlights: Lawsuits filed by unions

We’ve also been tracking cases unions have filed challenging state or federal laws and policies. Here’s a quick look at three of those cases: 

  • AFSCME Council 4 v. Garland (3:21-cv-01524): 
    • Four unions representing workers in Connecticut filed a lawsuit in the U.S. District Court for the District of Connecticut on Nov. 15, 2021, asking the court to declare that a federal law prohibiting members of the armed forces from unionizing did not apply to members of the National Guard on state active duty.
    • U.S. Attorney General Merrick Garland and the U.S. Department of Justice agreed with the unions about the law and the parties settled on May 17, 2022.
  • Anderson Federation of Teachers v. Rokita (1:21-cv-01767)
    • Three Indiana teachers unions filed a lawsuit in the U.S. District Court for the Southern District of Indiana on June 15, 2021, challenging the constitutionality of a state law requiring teachers to sign an annual authorization form for dues deductions.
    • Senior Judge Sarah Evans Barker partially blocked the law from going into effect on June 30, 2021. 
    • Gov. Eric Holcomb (R) signed a new bill amending the law in question on April 22, 2021. 
    • The teachers unions filed an amended complaint on June 15, 2022. 
  • Fraternal Order of Police v. D.C. (21-7059)
    • The D.C. Police Union filed a lawsuit in the U.S. District Court for the District of Columbia on Aug. 5, 2020, challenging a D.C. law blocking disciplinary procedures as a subject of collective bargaining.
    • Judge James Boasberg dismissed the case on Nov. 4, 2020.
    • The union appealed to the U.S. Court of Appeals for the District of Columbia Circuit on June 7, 2021. Oral argument was held on Feb. 2, 2022. 

To see the complete list of cases we’re tracking, click here

What we’re reading

The big picture

Number of relevant bills by state

We are currently tracking 144 pieces of legislation dealing with public-sector employee union policy. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we’re tracking. 

Number of relevant bills by current legislative status

Number of relevant bills by partisan status of sponsor(s) 

Recent legislative actions

Below is a complete list of relevant legislative actions taken since our last issue.

  • California AB1577: This bill would allow state legislative employees to organize and bargain collectively.
    • Bipartisan sponsorship.
    • Senate Labor, Public Employment, and Retirement Committee hearing held June 22. Senate Judiciary Committee hearing scheduled for June 28.
  • California AB1714: This bill would allow unions representing excluded state employees to request arbitration with the Department of Human Resources in certain circumstances.
    • Democratic sponsorship.
    • Senate Judiciary Committee hearing held June 21. Committee recommends “do pass.” Sent back to Senate Appropriations Committee June 22 with recommendation to place on the consent calendar.
  • California AB2556: This bill would change the time frame for a local public agency employer to implement a final offer after a factfinders’ recommendation has been submitted in the case of a dispute between the employer and employee organization.
    • Democratic sponsorship.
    • Read second time, amended, and sent back to Senate Labor, Public Employment, and Retirement Committee June 22. Hearing scheduled for June 29.
  • California SB931: This bill would allow a union to bring a claim before the Public Employment Relations Board against a public employer allegedly in violation of California Government Code Section 3550 and sets civil penalties for violations. Section 3550 prohibits public employers from discouraging union membership. 
    • Democratic sponsorship.
    • Assembly Public Employment And Retirement Committee hearing held June 22. Committee recommends “do pass.” Sent back to Assembly Appropriations Committee June 22.
  • California SB1313: This bill would prohibit Los Angeles County from discriminating against union members by limiting employee health benefits.
    • Democratic sponsorship.
    • Assembly Public Employment And Retirement Committee hearing held June 22. Committee recommends “do pass.” Sent back to Assembly Appropriations Committee June 22.
  • California SB1406: This bill would allow unions representing excluded state employees to request arbitration with the Department of Human Resources in certain circumstances.
    • Democratic sponsorship.
    • Assembly Public Employment And Retirement Committee hearing held June 22. Committee recommends “do pass.” Sent back to Assembly Judiciary Committee June 22 with recommendation to place on the consent calendar.

Thank you for reading! Let us know what you think! Reply to this email with any feedback or recommendations.



Union Station: Ninth Circuit panel says California can deduct union dues from state Medicaid payments to home care providers

On June 8, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit affirmed two district court decisions dismissing challenges to California’s deduction of union dues from Medicaid payments to home care providers. The panel issued a single opinion after consolidating the two appeals. 

About the cases

U.S. Circuit Judge Jacqueline Nguyen summarized the two cases as follows: 

“Appellants provide services through California’s [In-Home Support Services] program. They all became members of the public-sector union with exclusive bargaining rights in their counties … When they signed up, appellants authorized the State Controller to deduct union dues from their paychecks. That authorization included an agreement that they could only revoke their consent during brief annual windows.

“Appellants resigned from their unions outside the annual revocation windows. But they wanted their dues deductions to stop immediately. When the dues deductions continued, they brought these two putative class actions under 42 U.S.C. § 1983 against their former unions and State Controller Betty Yee.

“Appellants alleged that the continuing dues deductions violated their rights under the First Amendment and the Medicaid Act’s anti-reassignment provision.”

Attorneys from the Freedom Foundation and the National Right to Work Legal Defense Foundation represented the plaintiffs in both cases. 

About the ruling

The three-judge panel—Senior U.S. Circuit Judge Richard Paez, Nguyen, and Chief U.S. District Judge for the District of Minnesota John Tunheim—affirmed the dismissals of the cases on June 8. Nguyen wrote in the court’s opinion:

“For a federal statute to confer a right, ‘Congress must have intended that the provision in question benefit the plaintiff.’… Here, the text and legislative history of the anti-reassignment provision make clear that Congress was focused on preventing fraud and abuse in state Medicaid programs rather than on serving the needs of Medicaid providers. Because Congress did not intend to benefit Medicaid providers, we hold that the anti-reassignment provision does not confer a right that they can enforce under § 1983. … 

“Both district courts dismissed these cases for the same reasons. As to the First Amendment claim, the district courts concluded that the unions were not state actors and that appellants’ consent to pay union dues precluded any First Amendment liability. This court subsequently decided Belgau v. Inslee, which rejected a virtually identical First Amendment claim on the same rationale. … Appellants now concede that Belgau forecloses their First Amendment claim. As to the Medicaid Act claim, both district courts held that the anti-reassignment provision does not confer a right on providers that is enforceable under § 1983. … 

“Appellants also point out that the Centers for Medicare and Medicaid Services (CMS) adopted their broad interpretation of the anti-reassignment provision in a 2019 regulation. … More recently, however, CMS issued a rule clarifying that employment-type payroll deductions do not violate the anti-reassignment provision. …

“We therefore hold that the Medicaid Act’s antireassignment provision, 42 U.S.C. § 1396a(a)(32), does not confer a right on Medicaid providers enforceable under § 1983. We affirm the district courts’ dismissals of these cases.”

In May, the Centers for Medicare & Medicaid Services (CMS) issued a final rule “explicitly [authorizing] States to make payments to third parties on behalf of individual practitioners, for individual practitioners’ health insurance and welfare benefits, skills training, and other benefits customary for employees, if the individual practitioner consents to such payments on their behalf.” To read more of the backstory to this ruling, click here

President Bill Clinton (D) nominated Paez to the Ninth Circuit, and President Barack Obama (D) nominated Nguyen. Clinton nominated Tunheim to the U.S. District Court for the District of Minnesota.

About the Ninth Circuit 

The U.S. Court of Appeals for the Ninth Circuit hears appeals from the district courts within its jurisdiction, which includes Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington, as well as Guam and the Northern Mariana Islands. The chief judge of the court is Mary Murguia, an Obama appointee. Of the court’s 29 active judges, Clinton nominated five, George W. Bush (R) nominated three, Obama nominated seven, Donald Trump (R) nominated 10, and Joe Biden (D) nominated four.

What we’re reading

The big picture

Number of relevant bills by state

We are currently tracking 144 pieces of legislation dealing with public-sector employee union policy. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we’re tracking. 

Number of relevant bills by current legislative status

Number of relevant bills by partisan status of sponsor(s) 

Recent legislative actions

Below is a complete list of relevant legislative actions taken since our last issue.

  • California AB1577: This bill would allow state legislative employees to organize and bargain collectively.
    • Bipartisan sponsorship. 
    • Read second time, amended, and sent back to Senate Labor, Public Employment and Retirement Committee June 15. Committee hearing scheduled for June 22. 
  • California AB1714: This bill would allow unions representing excluded state employees to request arbitration with the Department of Human Resources in certain circumstances.
    • Democratic sponsorship. 
    • Senate Labor, Public Employment and Retirement Committee hearing held June 13. Committee recommends “do pass.” Sent back to Senate Judiciary Committee with recommendation to place on the consent calendar. Senate Judiciary Committee hearing scheduled for June 21.
  • California SB931: This bill would allow a union to bring a claim before the Public Employment Relations Board against a public employer allegedly in violation of California Government Code Section 3550 and sets civil penalties for violations. Section 3550 prohibits public employers from discouraging union membership. 
    • Democratic sponsorship. 
    • Assembly Judiciary Committee hearing held June 14. Committee recommends “do pass.” Sent back to Assembly Public Employment and Retirement Committee.

Thank you for reading! Let us know what you think! Reply to this email with any feedback or recommendations.



Hall Pass: Your Ticket to Understanding School Board Politics, Edition #17

Welcome to Hall Pass. This newsletter keeps you plugged into the conversations driving school board politics and governance. Each week, we bring you a roundup of the latest on school board elections, along with sharp commentary and research from across the political spectrum on the issues confronting school boards in the country’s 14,000 school districts. We’ll also bring you the latest on school board elections and recall efforts, including candidate filing deadlines and election results.

In today’s edition, you’ll find:

  • On the issues: The debate over school funding and the purpose of public schools 
  • School board filing deadlines, election results, and recall certifications
  • A state-level look at school board candidates per seat
  • Extracurricular: links from around the web
  • Candidate Connection survey

Reply to this email to share reactions or story ideas!

On the issues

In this section, we curate reporting, analysis, and commentary on the issues school board members deliberate when they set out to offer the best education possible in their district.

The debate over school funding and the purpose of public schools

Arguments about public school funding and vouchers often come down to beliefs about the purpose of schools. Below, two authors provide competing points on this topic.

Adam Byrn Tritt writes that public funding of schools primarily exists to create good citizens who can participate in democratic processes. Tritt says education is a collective benefit, which is why people without children pay taxes that fund public schools, why parents should not be able to control curriculum, and why public funding should not follow children who leave public schools.  

Jason Peirce writes that public education funding exists primarily for the benefit of individuals, especially parents and students. Peirce says taxpayers should not have to support schools that perform poorly on tests and other metrics. He says public funding should follow students to protect individual liberty, promote decentralization, and promote parental oversight of public schools and curricula. 

Public schools aren’t for just children or parents, but for society as a whole | Opinion | Adam Byrn Tritt, Florida Today

“I asked, why is it that folks without kids still pay for schools for you guys? Why did Jefferson want free education? … Why is it that curriculum isn’t up to parents? Why are school boards not elected by just parents? Because schools aren’t for their benefit. They aren’t for your benefit, either. They are for the collective benefit. Collective. The benefit of our society as a whole, not the individual. The purpose of public education is to ensure the citizens, the voters, have the ability to look critically at facts, and tell fact from fiction, fact from opinion. So voters can make smart decisions based on facts and then become smart officials, and officeholders who make decisions based on what’s best for the country and its people.. … Thus, our public schools are not for the children. They are not for the parents. They are for the country and our democracy. A curriculum, based on literacy, numeracy, critical thinking, and rhetorical skill is necessary for the protection of our republic. If such a curriculum is not to the liking of a parent, there are private schools. If a parent does not like the secular nature of public education, there are religious schools. If there is a book a parent wishes a child not read, they may forbid their child to read it. But they must understand the public school is not made for the good of the individual student, and the parent is not the “customer.”

Students, not failing schools, should be the ones receiving funding | Opinion | Jason Pierce, Florida Today

“Recent guest columnist Adam Bryn Tritt’s use of Thomas Jefferson to make his case that public schools and the education system exist for ‘the collective benefit’ of our ‘country and democracy,’ and ‘not for the children’ and their parents, is wrong-headedly backwards. Fact is, Jefferson and his fellow Founding Fathers founded the United States on the idea of individual liberty. Logically therefore, this country exists to uphold the individual liberty of the individuals comprising it, not any other way around, and certainly not the way Tritt would have it, which assumes we the people exist for the country, and government. … Jefferson held the complete opposite view. He believed school management by ‘any authority of the government, than by the parents within each ward … is a belief against all experiences.’ … Indeed, parents should be allowed to seek whatever education options they deem best for their children. And for starters, they should be able to take all public education dollars available with them, to whatever school they choose. This is school choice, what many now call the “civil rights issue of our time.” School choice would fund students, not failing systems, while breeding competition in education, bringing quality up, and costs down. It would also provide a boon to the education job market.”

School board update: filing deadlines, election results, and recall certifications

Ballotpedia has historically covered school board elections in about 500 of the country’s largest districts. We’re gradually expanding the number we cover with our eye on all of the roughly 14,000 districts with elected school boards.

Election results from the past week

Districts in our scope in Nevada held elections on June 14. Click the links below to see results. 

Upcoming school board elections

Districts in Texas are holding general runoff elections June 18. Districts in Georgia and Alabama are holding general and primary runoff elections on June 21. Districts in Maryland are holding primaries July 19.

Texas

We’re covering general runoff elections in the following districts on June 18.

Georgia

We’re covering general runoff elections in the following districts on June 21.

Alabama

We’re covering general runoff elections in the following districts on June 21.

Utah

We’re covering primary elections in the following districts on June 28.

Maryland

We’re covering the following school board elections on July 19.

A state breakdown of school board candidates per seat

This year, 2.3 candidates are running for each seat in 968 school board races for which we have completed gathering candidate information. Greater awareness of issues or conflicts around school board governance can cause the number of candidates per seat to increase. Indeed, the 2.3 candidates per seat is 17% more than in 2020. 

The numbers vary significantly by state, however. So far this year, the five states with the highest candidate-to-seat ratios are Nevada, Alabama, Tennessee, Alaska, and Nebraska.

The five states with the lowest candidate-to-seat ratio are New York, Georgia, Texas, Maryland, and California

(Note that this analysis includes the 200 largest districts by student enrollment and any districts that overlap the 100 largest cities in the country. Also, these numbers will change over the course of the year as more filing deadlines pass.)

In four of the five states with the highest candidate-per-seat ratio this year (Nevada is the exception), the ratio is higher this year than in either 2018 or 2020.

However, in the five states with the lowest candidates-to-seat ratios, only one state (Texas) has a higher ratio than it did in 2020 or 2018. 

This isn’t an apples-to-apples comparison, because the data from 2020 and 2018 includes all the seats up for election in our coverage scope in those years, whereas 2022 data only goes through June 13. We will update and revisit these chart once all the school board elections in our coverage scope are completed. 

For more data on school board elections, including candidates per seat and incumbency success rates, click here

Extracurricular: education news from around the web

This section contains links to recent education-related articles from around the internet. If you know of a story we should be reading, reply to this email to share it with us! 

DeKalb County School District general runoff election survey responses

Today, we’re highlighting survey responses from the upcoming June 21 DeKalb County School District school board general runoff elections in Georgia. Three seats were up for election on May 24, with the top two vote-getting candidates in District 2 and 6 advancing to a runoff. 

The District 2 runoff features Whitney McGinniss and Candice McKinley.

Here’s how McGinniss responded to the question “What areas of public policy are you personally passionate about?”

“*COVID-19 Safety and Recovery*

As we move beyond COVID-19, it is important to acknowledge that our children have suffered emotionally, socially, and academically over the last two years. I will push for programs designed to address the student wellness and academic gaps created by COVID-19. I will prioritize in-person leaning, ensuring that our schools are safe for students and teachers.

  • Diversity, Equity, and Inclusion*

With students from over 155 countries, DCSD is one of the most diverse districts in the nation. Our diversity is one of our unique gifts, but it presents special challenges. I believe all children deserve the opportunity to succeed, regardless their zip code, race, ethnicity, household income, LGBTQ+ identity, immigration or disability status.

  • Building Construction and Maintenance*

The schools in District 2 are some of the oldest in the county, so maintenance and facilities concerns are among our schools’ biggest needs. I have been a vocal facilities advocate, securing millions of dollars of heating and air conditioning repairs and upgrades in 7 DeKalb County school buildings, and I coordinated local efforts to get lead paint removed from Laurel Ridge Elementary School’s aging windows. Our students cannot effectively learn in classrooms that are too hot, too cold, unsafe, or falling apart. I am committed to increasing the quality of school facilities across the county.”

Click here to read the rest of McGinniss’ answers. 

Here’s how McKinley responded to the question “What areas of public policy are you personally passionate about?”

“School Safety and Well-Being

Our schools in District #2 need immediate attention to ensure they are safe places for our students. The attention must be on both operational upgrades and intentionality to social and emotional supports inside our schools. When our students come into spaces that are not safe and do not feel safe due to wellness challenges from COVID-19, other mental health issues, or ineffective discipline policies –there is a dire problem. We must act now. Safety and well-being is essential and just as important to our staff who have spent the last two years on the front lines of an education revolution.”

Click here to read the rest of McKinley’s answers. 

If you’re a school board candidate or incumbent, click here to take the survey. The survey contains over 30 questions, and you can choose the ones you feel will best represent your views to voters. If you complete the survey, a box with your answers will display on your Ballotpedia profile. Your responses will also populate the information that appears in our mobile app, My Vote Ballotpedia.
If you’re not running for school board but there is an election in your community this year, share the link with the candidates and urge them to take the survey!



Six candidates are running in the Democratic primary for Illinois’ 17th Congressional District

Six candidates are running in the Democratic primary for Illinois’ 17th Congressional District on June 28, 2022. Incumbent Rep. Cheri Bustos (D) is not running for re-election. Jonathan Logemann, Angie Normoyle, Eric Sorensen, and Litesa Wallace have led in fundraising.

Logemann, a high school economics and business teacher, has been a member of the Rockford City Council since 2017, representing the 2nd Ward. Logemann said he decided to run because he felt a call to serve his community. Logemann has focused on his background as a teacher and a member of the National Guard, saying, “As a teacher, and with my service in the Illinois National Guard and as an alderman … none of these are glamorous jobs at all, but service to community is something that’s very important to me.” Logemann has also highlighted labor issues, writing, “I am running to raise wages, fight for workplace protections, defend the right to collectively bargain, and ensure our workers are treated fairly.”

Illinois AFL-CIO, the Illinois Education Association, and Vote Vets PAC have endorsed Logemann.

Normoyle has represented the 14th district on the Rock Island County board since 2019. A professor at Augustana College, Normoyle has cited education as a top issue. She has highlighted her work serving on the Moline school board, saying, “During my time on the School Board, we modernized the Moline School District, expanding schools to provide space for alternative learning, art, extracurriculars, and more.” Normoyle has also focused on her ties to the district, saying, “This district has been my home for the majority of my life, and I’m deeply committed to investing in a healthy community. We need more representatives who lead with a local approach – who meet with community leaders, hold open meetings, and listen to community members, not special interests.”

The Leadership Now Project has endorsed Normoyle.

Sorensen, a TV meteorologist in the Quad Cities area, has focused on climate change. Sorensen’s website says, “In Central and Northwest Illinois, we know that climate change is real — whether it was the 2021 summer drought or, the August 2020 derecho with 100 miles per hour winds.” He added, “Now is the time to act, and we need an experienced climate communicator to lead.” Sorensen has also focused on LGBTQ issues and has spoken about experiencing discrimination early in his career. Sorensen said, “[At my first TV job], I was told that I couldn’t be gay and work there. My experiences in Rockford and the Quad Cities were quite different — I was able to be out on TV! And in the Quad Cities, I took a more active role in our LGBTQ community.”

The LGBTQ Victory Fund, Equality PAC, and Climate Hawks Vote have endorsed Sorensen.

Wallace represented the 67th district in the Illinois House of Representatives from 2014 to 2019. A single mother and a mental health counselor, Wallace has focused on childcare issues. Wallace wrote, “When I get to Congress, I will fight hard to expand affordable childcare programs for parents who are working lower-wage jobs or who are in school or training programs.” She added, “Right now, many Illinois parents simply can’t afford to pay for good, reliable childcare. Paying average costs for day care for a 4-year-old would eat up more than half of a minimum wage worker’s annual income — and care for an infant would cost almost three-fourths of that worker’s paycheck.” In 2018, Wallace ran in the Democratic primary for lieutenant governor of Illinois on the ticket of gubernatorial candidate Daniel Biss (D), losing 45.1% to 26.7%.

The Illinois Federation of Teachers, Democracy for America, and the Illinois chapter of the SEIU have endorsed Wallace.

The lines of the 17th district changed after re-districting. According to FiveThirtyEight, the old district had a partisan lean of R+5, while the new district has a partisan lean of D+4. One election forecaster rates the general election Tilt Democratic, while two rate it a Toss-up, suggesting it will be competitive.

Jacqueline McGowan and Marsha Williams are also running in the primary.



10 statewide candidate filing deadlines coming up this month

Welcome to the Friday, June 3, Brew. 

By: Douglas Kronaizl

Here’s what’s in store for you as you start your day:

  1. Ten statewide candidate filing deadlines coming up this month
  2. New Jersey’s upcoming statewide primaries
  3. Campaign finance in California with Transparency USA

Ten statewide candidate filing deadlines coming up this month

June is one of the busiest months of the 2022 election cycle, with 17 primary elections, the most of the year, and 10 statewide candidate filing deadlines, the year’s second-most.

We will be bringing you information about the primaries throughout the coming weeks, but today, let’s look at those candidate filing deadlines, some of the last ones remaining in this election cycle.

Three filing deadlines have already passed in June. Candidates in Alaska, Kansas, and Wisconsin had until June 1 to file to run in primary elections.

Five filing deadlines are coming up next week. Connecticut, Hawaii, and Massachusetts have deadlines set for June 7. New Hampshire and New York’s deadlines are coming up on June 10.

For Connecticut, Hawaii, and New Hampshire, these filing deadlines apply for all state and congressional offices on the ballot. For Massachusetts and New York, these are the second major filing deadlines of the cycle. Both states had earlier filing deadlines for some offices. The ones coming up in June apply to congressional and statewide candidates in Massachusetts and congressional and state Senate candidates in New York.

Two deadlines will come later in the month. Candidates in Florida have until June 17 to file, followed by those in Rhode Island on June 29.

These June filing deadlines are some of the last for this election cycle. Only two states—Delaware and Louisiana—have later filing deadlines, with both scheduled for July.

We will continue to bring you primary coverage as the election cycle progresses and in-depth looks at post-filing deadline statistics from every state as they become available.

Keep reading 

New Jersey’s upcoming statewide primaries

We’re right around the corner from Super Tuesday. Seven states are holding statewide primaries for federal and state offices on June 7: California, Iowa, Mississippi, Montana, New Jersey, New Mexico, and South Dakota. Today, let’s take a closer look at New Jersey, the races on the ballot, and how their primaries work.

Elections in New Jersey tend to be quieter in even-numbered years. The state holds executive and legislative elections in odd-numbered years, most recently in 2021. That leaves only congressional races at the top of the ballot this year. 

New Jersey is holding elections for its 12 congressional districts. The state’s congressional delegation currently includes 10 Democrats and two Republicans. Every incumbent is seeking re-election except for Rep. Albio Sires (D) in the 8th District, who is retiring. Of the 11 incumbents seeking re-election, six will face contested primaries, with the remaining five guaranteed to advance to the general election. 

Overall, 56 major party candidates—20 Democrats and 36 Republicans—filed to run for the U.S. House this year, the largest number since 2014. This sets up 15 contested primaries, the same as in 2020. Unlike 2020, and every other cycle back to 2014, this is the first year New Jersey has more contested Republican primaries (9) than Democratic ones (6).

In New Jersey, candidates can advance from a primary with a plurality, rather than a majority, of the vote. The state does not hold runoff elections. This means the candidate with the most votes—even if less than 50% of the votes cast—advances. This is especially pronounced in primaries with many candidates like the seven-person Republican primary in the state’s 7th District.

In addition to the candidates on the ballot, New Jersey also allows write-in candidacies. These write-in candidates don’t need to file, but to win a primary, they must receive the number of votes greater than or equal to the number of signatures they would have needed to appear on the ballot.

These primaries are not the final step in completing the state’s general election ballot. The filing deadline for independent candidates, for example, is also set for June 7. 

If you have primaries coming up, use Ballotpedia’s Sample Ballot Lookup to see what’s on your ballot and bring your choices to the polls with our My Vote app!

Keep reading 

Campaign finance in California with Transparency USA

Campaign finance figures—how much candidates raise, spend, and have at their disposal—help voters understand where money is coming from and going in our elections. 

One entity, the Federal Elections Commission (FEC), tracks these figures at the federal level. At the state level, it gets trickier. Every state has different reporting systems and typically uses different formats when releasing these reports.

That’s why we are excited to announce that we’ve added a new state to our collaboration with Transparency USA: California.

Ballotpedia has published individual campaign finance data on state-level legislative candidates in California in partnership with Transparency USA. Candidates for state executive and state legislative positions are covered as part of this partnership. To explore those races and candidates on the ballot this year, click here. And here’s an example of what this partnership has helped us create:

Democrats currently hold a trifecta and a triplex in the state, meaning they control the positions of governor, attorney general and secretary of state, as well as majorities in both chambers of the state legislature.

This year, we plan to publish several hundred articles breaking down campaign finance numbers in the 12 states covered by Transparency USA: Arizona, California, Florida, Indiana, Michigan, Minnesota, North Carolina, Ohio, Pennsylvania, Texas, Virginia, and Wisconsin. Use the link below to learn more about our partnership with Transparency USA.
Keep reading



New Hampshire becomes final state to enact congressional map

New Hampshire enacted the final congressional map of the 2020 redistricting cycle on May 31, 2022, when the New Hampshire Supreme Court approved a map drawn by redistricting special master Nathaniel Persily. New Hampshire was apportioned two seats in the U.S. House of Representatives after the 2020 census, one more than it received after the 2010 census. This map will take effect for New Hampshire’s 2022 congressional elections.

The New Hampshire Supreme Court assumed control over the redistricting process as part of a lawsuit filed by former New Hampshire House Speaker Terie Norelli (D) and several voters. On April 11, the court announced it would take control of the process if the state legislature and governor could not draw a new congressional map.

The New Hampshire state legislature approved two congressional map bills. The first was approved 186-164 in the New Hampshire House on January 5 and 13-11 in the New Hampshire Senate on March 17. Shortly after the map was approved by the Senate, Gov. Chris Sununu (R) said he planned to veto the map. The House voted 176-171 and the Senate voted 14-10 to approve a second map bill on May 26. On the same day, Sununu said he planned to veto the map.

As of May 31, 43 states have adopted new congressional maps, six states were apportioned one congressional district (so no congressional redistricting is required), and Florida’s congressional map is currently undergoing a legal challenge. As of May 31 in 2012, 42 states had enacted congressional redistricting plans.

States have completed congressional redistricting for 408 of the 435 seats (93.8%) in the U.S. House of Representatives.

Additional reading:



Zeigler, Allen advance to Alabama secretary of state primary runoff

Jim Zeigler and Wes Allen advanced from the Republican primary for Alabama secretary of state to a June 21, 2022, primary runoff. A candidate needed at least 50% of the primary vote to win outright. Zeigler had 43% and Allen, 40% as of Wednesday afternoon. Christian Horn and Ed Packard also ran in the May 24 primary. Incumbent John Merrill (R) was term-limited.

Each candidate said his experience prepared him for the position. Allen was a Pike County Probate Court judge and said he administered more than a dozen elections without error. Zeigler, the state auditor, said he had been a “watchman against government waste, mismanagement and corruption” and would be a watchman for election integrity.

The candidates each highlighted areas of election policy they would focus on. Allen said he opposed mass mail, no-excuse absentee, early, and curbside voting and supported a photo ID requirement. Zeigler highlighted his support for a photo ID requirement and opposition to same-day voter registration, allowing non-citizens to vote, efforts to extend the voting period, ballot drop boxes, and allowing people to return ballots on behalf of other voters.

Republicans have held the Secretary of State office in Alabama since 2007. The secretary of state is Alabama’s chief election official and certifies vote totals, ballots, and fundraising records. The secretary of state is also responsible for business registration and keeping the state government’s official documents and public records.



Elon Musk continues push back against ESG

ESG Developments This Week

In Washington, D.C.

Documenting ESG pushback

On May 19, The Wall Street Journal carried an op-ed by Jonathan Berry, a Trump administration Labor Department official, and Boyden Gray, former White House Counsel to President George H. W. Bush. The piece focuses on index funds/ETFs, highlighting efforts made in the states in opposition to ESG, and suggesting that there may, in the near future, be federal efforts following the same tack. The two wrote the following:

“Passive investing through index funds lets ordinary Americans own the market. Those funds and similar vehicles spread risk and keep fees low. The resulting rates of return have triggered seismic shifts from active to passive funds.

The problem is that there’s been an equally seismic power shift to those passive funds’ investment managers. They’re trying to remake corporate America to suit their personal politics.

In truth, it’s the Big Three investment managers who now own the market. BlackRock, Vanguard and State Street control more than $20 trillion in assets. In 90% of public companies, one of the Big Three is the largest shareholder. More money means more votes: At S&P 500 companies, the Big Three cast about 20% to 25% of all shareholder votes. And that vote bloc will only grow as more Americans move their savings into passive funds.

That concentration of voting power in three like-minded investment companies, given the diversity of all other voting interests, means the Big Three can often direct the outcome of board elections and shareholder proposals….

Fortunately, it looks as if more of our elected representatives are waking up. West Virginia’s state treasurer recently fired BlackRock from a state investment board over its China ties and hostility to fossil fuels. Florida’s top officials have moved to claw back proxy voting power from outside fund managers over Chinese entanglements and politicized investment decisions. Texas (with other states to follow) has gone so far as to demand fair treatment in financing for industries that don’t fit the politics of Mr. Fink et al.—think fracking, guns and oil.

Congress is joining the conversation. This week, the Senate took up a major bill, the Investor Democracy is Expected Act. The Index Act requires passive investment managers to cast funds’ most important votes in accord with the wishes of actual investors. This kind of reform dissipates the political power amassed by the Big Three as an incident to the rise of passive investing. It would push America’s public companies to respond to the desires of ultimate investors—i.e., regular people.

Happily, the writing is already on the wall. Facing pushback, Mr. Fink has lately muted the imperious tone from his annual letter to CEOs, and BlackRock has started extending “proxy voting choice” to larger clients, representing 40% of index equity assets under management. So why not finish the job and send the rest of the power back?

American corporations are supposed to work for their shareholders. An ideal, yes, but requiring asset managers to pass voting power back to investors would bring it closer to reality.”

On Wall Street and in the private sector

Documenting the pushback against the pushback to ESG

Throughout May, numerous defenses against efforts in opposition to the ESG investment movement have appeared. Bloomberg ran two columns (one reprinted at The Washington Post) which argued that, in the view of the pieces, pushback efforts in opposition to ESG are somewhat less than they are cracked up to be. The first of these, by Liam Denning, ran May 19:

“Recently, it may feel as if your 401K is just a mathematical distillation of every wrong decision you’ve ever made. Even worse, though, what if your investments are nothing less than the means by which a shallow and divisive agenda is foisted on millions of unsuspecting Americans by an “ideological cartel”?

That choice phrase comes from Vivek Ramaswamy, a former biotech executive, author and now cofounder of a new investment firm seeded by, among others, the billionaire Peter Thiel. Strive Asset Management seeks to take on the Big Three — BlackRock Inc., State Street Corp. and Vanguard Group Inc. — accusing them of coordinating a campaign to push political objectives that are at odds with their clients’ best interests. In essence, BlackRock CEO Larry Fink et al. decide that they want to prioritize tackling climate change or systemic racism or whatnot and then use the trillions of passive dollars they invest to force companies to prioritize that, too. Strive will do the opposite, pushing instead “excellence capitalism” — that is, nudging companies to ditch the political stuff and focus on delivering good products and services….

Ramaswamy’s core argument is a warning about the growing power of passive money managers. This has merit. The Big Three own, on their clients’ behalf, about one-fifth of each S&P 500 member, on average, with potentially negative implications for governance and competition. There is already lively debate and a body of academic literature about this. 

Still, it remains a leap to conclude that there now exists a cartel — a loaded term — that effectively forces certain political stances on US companies and Americans in general. It is far from clear that corporations set the pace on social issues rather than take their cues from below. For example, plenty of people — indeed, a majority in the US — are concerned about climate change, and that didn’t require the imprimatur of any corporate executive….

Google articles about Strive and you will find terms like “ESG,” “SRI” — socially responsible investing — and stakeholder capitalism used interchangeably. Similarly, Ramaswamy’s book uses the catch-all term “woke”:

Basically, being woke means obsessing about race, gender, and sexual orientation. Maybe climate change too. That’s the best definition I can give.

If you say so. Dismissing climate change as just another activist obsession speaks to the logical disconnect of exhorting Exxon to focus on delivering a high-quality product without acknowledging that said product carries an inherent, climate-related flaw that requires a strategic response. One person’s liberal hobby horse is another’s systemic risk….

Strive’s timing is impeccable, effectively taking the opposite side of what has become a crowded trade.

That timing also makes it suspect. Strive launches amid a gathering Republican campaign against companies taking positions that oppose the party line on wedge issues. The day after Strive’s announcement, former Vice President Mike Pence gave a speech in Texas attacking ESG and socially minded investing, making a wild claim that Exxon’s new directors were “now working to undermine the company from the inside.” As much as Strive touts itself as “depoliticizing corporate America,” I’m afraid you don’t get to do that credibly while also boasting about seed money from Thiel.”

The argument that pushback against ESG is politically tinged is an argument reiterated in the second Bloomberg pieceby Jeff Green and Saijel Kishanpublished the following day, May 20:

“Heading into the hotly contested midterm elections, the American political right has a new rallying cry: Down with ESG.

Conservatives have identified the popular investing strategy, which accounts for environmental, social and governance risks, as part of a broader narrative about left-wing overreach and “ wokeness” run amok. Utah Treasurer Marlo Oaks calls it “corporate cancel culture.” Behind the rhetoric lie policies designed to sap the momentum of one of Wall Street’s most successful initiatives in recent years, now worth $35 trillion globally. If it works, it will firmly ensconce ESG in the culture wars, galvanize voters and weaken the resolve of big asset managers to act on climate change and other big, societal issues.

West Virginians are already all too familiar with ESG, according to state treasurer Riley Moore. He’s preparing a list of banks that, he says, will lose the state’s business unless they declare they aren’t boycotting the coal industry and other fossil fuels. “Certainly ‘woke capitalism’ is something they are very familiar with,” he said. “We’re facing threats from that in my state, right now.”

The attacks on ESG escalated last week when former Vice President Mike Pence made the strategy a key theme in an energy-policy speech in Houston. A potential candidate for the 2024 Republican presidential nomination, Pence said large investment firms are pushing a “radical ESG agenda” and took aim at BlackRock Inc., whose Chief Executive Officer Larry Fink is a champion of sustainable investing, and others who have pressed for progress on climate change….

With gas prices rising and energy a key factor in Russia’s invasion of Ukraine, it’s becoming easier for Republicans to tie ESG to pocketbook issues of their constituents. Just as Critical Race Theory grew from a catchall for parents unhappy or worried about what their children were learning in public schools to successful efforts to seize control of local school boards, ESG opponents see an opportunity to aim voters’ fears of inflation at the finance industry’s efforts to combat global warming and other social ills. 

It’s also a new front in a longstanding battle against further restrictions on fossil-fuel industries, which give generously to Republican party candidates, and more corporate accountability. At the state level, Republican governors and other officials are finding new ways to block major Wall Street firms from state business, including managing pension funds and bond issues, if they apply ESG principles to other parts of their portfolios.

Nationally, the broadsides against ESG bolster calls to abandon, or at least relax, environmental standards in favor of “energy independence.” It’s also a partisan issue at the US Securities and Exchange Commission, which is trying to require companies to report on their greenhouse gas emissions. In a virtual meeting on the plan in March, the agency’s only Republican commissioner, Hester Peirce, turned off her camera in protest, saying that she was trying to reduce her carbon footprint.

Republicans are increasingly using banks and “woke” companies as cudgels for their base voters, said Reed Galen, a co-founder of the anti-Trump group, The Lincoln Project. “If you’re taking on a company who has environmental and social justice goals, you don’t have to explain ESG to the voters. All you have to do is say ‘woke corporation.’”…

Few expect the Republican attacks on ESG to vaporize the industry. As of now, roughly $3.4 trillion of public retirement money is invested in line with ESG strategies of some sort, according to the sustainable-investing industry group US SIF. Some of the bigger, more liberal states like California and New York are pushing for more restrictive ESG screens for state funds, not less. What’s more, many of the world’s biggest financial institutions have their own goals to cut emissions, which include reducing the amount of business they do with heavy polluters — whether they bill it as ESG or not. Many also have set targets for workforce diversity and elevating women in management, neither of which are politically popular among the right.

Still, the political pressure seems to be taking a toll. BlackRock sent a letter this week to the Texas state comptroller, rebutting the assertion that the firm boycotts the oil and gas industries, and Fink has made it clear he opposes divesting from fossil-fuel companies. The firm also said this year that it won’t back as many shareholder efforts to push companies to reduce their emissions compared with 2021. JPMorgan Chase & Co. is also taking steps to re-establish itself in Texas’s muni-bond market, about eight months after a new law forced that bank out of most deals because of its policies on guns and fossil fuels.”

In the spotlight

Tesla dumped from S&P ESG Index; CEO Elon Musk calls ESG a scam

Over the last several months, this space has documented the paradoxical but serious battle between the ESG gatekeepers and Tesla, the world’s best-known and most valuable maker of automobiles without greenhouse-gas-producing internal combustion engines.  Over the last several weeks, a war of words between ESG advocates and Tesla, a maker of automobiles without greenhouse-gas-producing internal combustion engines, has heated up.

First, Tesla got kicked out of the S&P 500 ESG index:

“This week, S&P Global SPGI +2.51% ’s (SPGI) S&P Dow Jones Indices division said that Tesla (TSLA), which CEO Elon Musk says he founded to put the world on a path to a sustainable-energy future, doesn’t have a comprehensive low-carbon strategy and no longer qualifies for inclusion in the S&P 500 ESG Index (SPXESUP). 

Tesla was “ineligible for index inclusion due to its low S&P DJI ESG Score,” Margaret Dorn, head of ESG Indices, North America, at S&P Dow Jones Indices, wrote in a blog post explaining the decision. “So, while Tesla’s S&P DJI ESG Score has remained fairly stable year-over-year, it was pushed further down the ranks relative to its global industry group peers.””

After that, its CEO Elon Musk called ESG a scam:

“This week, a major move to cut Tesla from a closely followed environmental, social and governance (ESG) index brought anger and relief in nearly equal measure.

Defiance was on display from Standard & Poor’s, which rejected Tesla from its ESG index; annoyance emerged from Tesla TSLA, 1.20% investors, including well-known asset manager and Tesla bull Cathie Wood. There was also a seething snapback from Elon Musk….

“ESG is a scam. It has been weaponized by phony social justice warriors,” tweeted Musk, lamenting that ExxonMobil topped Tesla.

“Ridiculous,” was Wood’s terse response to Tesla’s removal.”



Year in review: A recap of donor disclosure and privacy policy in the first half of 2022

State legislative sessions are winding down. This will be our last edition of The Disclosure Digest for the next few months as we take a short break and gear up for 2023.. We’ll be back later this year to help you get ready for the 2023 sessions. For now, please enjoy this look back at the 2022 session, and as always, thanks for reading!

Disclosure Digest

State legislators have considered at least 143 bills on donor disclosure and privacy policy this year. Some of these bills required the disclosure of donor information, such as names, addresses, and donation amounts, while others prohibited certain types of disclosure and expanded donor privacy. Of the 143 bills we tracked this year, Republicans sponsored 48, Democrats sponsored 62, and bipartisan groups or committees sponsored 33. 

Ballotpedia also covered six court cases in Alaska, Connecticut, New Mexico, Oregon, Rhode Island, and Washington that affected or could affect disclosure and privacy policy.

Let’s take a look back at session activity in 2022 and how it compares to past years.

Enacted legislation

Of the 15 bills on donor disclosure and privacy enacted this year, 11 focused on disclosure and four focused on privacy. Seven bills were passed in Republican trifecta states while three were in Democratic trifectas. 

Disclosure bills:

  • Colorado HB1060 sets limits on contributions to candidates for school board director and require candidates to disclose campaign contribution information to the secretary of state. 
  • Florida H0921 prohibits a foreign national from making or offering to make contributions or expenditures in connection with any election held in the state.
  • Indiana SB0134 requires appropriations of any donation from a nongovernmental organization to a state agency or local unit of government to be listed in a separate line item in the budget of the state or local unit of government. The budget line item must specify each individual state employee or local government employee, whichever is applicable, whose salary is funded in whole or in part from the donated money.
  • Indiana SB0388 requires a postsecondary educational institution to submit a report to the Indiana commissioner for higher education disclosing gifts of at least $50,000 from a foreign source. 
  • Kentucky HB301 prohibits a state government employee from accepting contributions to assist with election administration unless entered into as a lawful contract.
  • Kentucky HB740 requires a candidate exempt from filing a campaign finance report to file a 30 day post-election report of receipts and disbursements. It would also require a candidate who is exempt from filing for the primary who advances to the regular election to refile for the filing exemption. 
  • Maine LD1754 requires contributors giving more than $100,000 to a political action committee or ballot question committee for the purpose of influencing a ballot question to file a disclosure statement with the Commission on Governmental Ethics and Election Practices.
  • Maine LD1782 prohibits a ballot question committee from making contributions to a candidate or political action committee if the contributed funds are derived from a business. 
  • Virginia HB492 requires campaign committee treasurers to keep accounts of campaign contributions and expenditures and authorizes the Department of Elections to conduct reviews of a percentage of campaign committees.
  • Wyoming HB0049 increases the penalty for failing to file disclosure reports.
  • Wyoming HB0080 requires all campaigns and political action committees to file an itemized statement of contributions and expenditures.

Privacy bills:

  • Kansas HB2109 prohibits a state agency from requesting or releasing the personal information of donors to 501(c) organizations.  
  • Utah HB0040 prevents the disclosure of the names and information of donors or prospective donors to a governmental entity.
  • Virginia HB970 prohibits government agencies from requesting or disclosing donor information from any 501(c) organization. The bill exempts the Campaign Finance Disclosure Act of 2006 from the privacy requirements.
  • West Virginia HB4419 removes restrictions on candidate and campaign caucus committees’ donations to their affiliated state party executive committees or a caucus campaign committee.

In comparison, we tracked 40 bills during the first five months of 2021, and eight of these bills had been enacted by this point in the year. Three of the enacted bills were focused on disclosure and five were focused on privacy. In 2020, we tracked 48 bills in the first five months of the year, and four of those bills had been enacted. 

Court activity 

Gaspee Project v. Mederos

On April 25, the U.S. Supreme Court announced it would not take up Gaspee Project v. Mederos, a lawsuit challenging Rhode Island’s campaign finance disclosure regulations. The court’s refusal to hear the appeal means a lower court ruling upholding the state’s law will stand.

Smith v. Helzer

On April 7, five Alaska residents and several independent expenditure groups sued the Alaska Public Offices Commission in U.S. district court challenging donor disclosure requirements enacted through a 2020 ballot measure. 

Ofsink v. Fagan

In a March 22 filing, three Oregon nonprofit groups asked the Oregon Supreme Court to reconsider its decision on a series of campaign finance ballot measures. On March 18, the court rejected the groups’ request to overturn Secretary of State Shemia Fagan’s (D) decision barring the initiatives from appearing on the general election ballot. If the court rejects the groups’ request, the petitioners would have to start the initiative process over.

Cowboys for Trump, Inc. v. Oliver

On Feb. 15, the United States Court of Appeals for the Tenth Circuit affirmed a lower court’s dismissal of a lawsuit challenging New Mexico’s disclosure requirements for political action committees. Cowboys for Trump (also known as C4T), a group founded by Otero County Commissioner Couy Griffin (R), filed the original suit after New Mexico Secretary of State Maggie Toulouse Oliver (D) ordered the group to register as a political action committee or pay a fine.

Washington v. Grocery Manufacturers Association

On March 2, Washington Attorney General Bob Ferguson (D) announced a settlement with a grocery trade group, ending nine years of litigation over the group’s alleged failure to disclose its donors’ identities in a campaign against a 2013 ballot initiative. Under the terms of the settlement, the group will pay a reduced fine in return for accepting responsibility for violating Washington’s disclosure laws and agreeing not to pursue an appeal.

Kissel v. Seagull

On Jan. 19, the United States District Court for the District of Connecticut issued its final ruling in Kissel v. Seagull, striking down a Connecticut statute that required paid solicitors to disclose the names and addresses of donors to the Connecticut Department of Consumer Protection upon request. 

What we’ve been reading

The big picture

Number of relevant bills by state: We’re currently tracking 143 pieces of legislation dealing with donor disclosure and privacy. Of these bills, 116 are primarily focused on disclosure, and 27 are primarily focused on privacy. To reflect this distinction, the charts in this section and the recent legislative actions below are divided between disclosure legislation and privacy legislation. On the maps below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we’re tracking. 

Donor disclosure legislation

Number of relevant bills by current legislative status

Number of relevant bills by partisan status of sponsor(s)

Donor privacy legislation

Number of relevant bills by current legislative status

Number of relevant bills by partisan status of sponsor(s)

Recent legislative actions

For complete information on all of the bills we are tracking, click here

Donor disclosure legislation

  • Louisiana SB473: This bill would require postsecondary education institutions to disclose the source of any foreign gifts. 
    • Republican sponsorship
    • This bill was referred to committee on May 16.

Donor privacy legislation

No legislative actions were taken on privacy bills this week. 

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