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Speaker 1: A few weeks ago, we had on Jesse Coleman was

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Speaker 1: documented to walk through how the same dark money network

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Speaker 1: that once funded climate denial is now funding state treasurers

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Speaker 1: in an effort to push back against so called woke

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Speaker 1: capital or woke capitalism.

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Speaker 2: The reference to Environmental, Social and Governance Guidelines in the

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Speaker 2: finance space or ESG, which if anything, has mostly been

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Speaker 2: a pretty handy greenwashing tool for a lot of polluting

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Speaker 2: industries over the years. That was until the Securities and

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Speaker 2: Exchange Commission announced that the next phase of its ESG

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Speaker 2: plan was to require companies to disclose climate risk. Seems

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Speaker 2: logical enough. Climate impacts could definitely have a financial impact

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Speaker 2: as well, both in terms of extreme weather events and

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Speaker 2: in terms of legislative changes, not to mention the massive

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Speaker 2: amount of litigation currently facing many companies that are the

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Speaker 2: drivers of climate change. But remember Coleman told us the

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Speaker 2: anti ESG crowd, they're reaching way back into the vault

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Speaker 2: of climate change denial, claiming not only that climate change

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Speaker 2: isn't happening, but that actually more CO two in the

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Speaker 2: atmosphere is a net gain.

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Speaker 3: You know, CO two isn't bad for you. It's causing

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Speaker 3: a great greeting of the Earth.

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Speaker 2: Coleman also told us about one state treasurer in.

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Speaker 3: Particular, Riley Moore, the treasure of West Virginia, who's a

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Speaker 3: real leader of all of this. Was actually on a

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Speaker 3: podcast with the head of SFOF and he was talking

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Speaker 3: about why the state treasures are so perfect as a

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Speaker 3: weapon against climb policy, and he said, the attorney's generals

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Speaker 3: they have to work through the courts. I speak with

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Speaker 3: the taxpayer's money with the stroke of my pen. I

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Speaker 3: can change things and it doesn't have to go through

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Speaker 3: the court system.

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Speaker 2: That podcast is called Gallantly Streaming, by the way, who

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Speaker 2: knows why, it's the State Financial Officers Foundation podcast. Here's

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Speaker 2: really Moore speaking with them in February twenty twenty two.

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Speaker 4: We're able to kind of speak with the taxpayer dollars,

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Speaker 4: is what I'd say. And because you're not just a

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Speaker 4: bureaucrat in here.

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Speaker 5: You are an.

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Speaker 4: Elected official, and you are there to represent the equities

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Speaker 4: and interests of your constituents, and you can do that

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Speaker 4: in a way that's uniquely different than say attorney generals do,

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Speaker 4: where they might sue over a certain issue or something

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Speaker 4: like that. This has more of an immediate effect, and

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Speaker 4: the end of the day, day citizens are paying taxes,

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Speaker 4: industries are paying taxes to the state in which you

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Speaker 4: manage those dollars, and so there is, I believe, a

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Speaker 4: responsibility to have those dollars invested in a manner that

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Speaker 4: reflects the interest and equity of your constituents.

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Speaker 2: Moore became a real hero of the anti ESG right

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Speaker 2: when he kicked Blackrock out of West Virginia in January

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Speaker 2: twenty twenty two. That was shortly after CEO Larry Fink

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Speaker 2: encouraged American companies to commit to carbon neutrality. It's interesting

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Speaker 2: that more specifically notes there how much more treasures can

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Speaker 2: do than attorneys general because guess who else is getting

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Speaker 2: in on the anti ESG action.

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Speaker 6: This is not a case about climate change. This is

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Speaker 6: a case about separational powers and ensuring that the legislative branch,

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Speaker 6: sception at an unelected bureaucrats don't try to weigh in

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Speaker 6: when they don't have power to act.

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Speaker 2: That's right. It's Patrick Morrissey, Attorney General of West Virginia,

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Speaker 2: the man who brought us West Virginia versus EPA. The

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Speaker 2: Supreme Court ruling in that case doubled down on a

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Speaker 2: convention entirely manufactured by Supreme Court justices in recent years,

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Speaker 2: something they call the Major Questions doctrine. Don't be fooled

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Speaker 2: by the doctrine part. It's only been around since the

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Speaker 2: early eighties. There's nothing established or original about this idea.

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Speaker 2: It's just a very handy tool that conservative justices like

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Speaker 2: to use. We've explained Major Questions doctrine on this podcast

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Speaker 2: a few times, but here's NYU law professor Richard Rivez

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Speaker 2: defining it for us back when West Virginia versus EPA

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Speaker 2: was being argued at the Supreme Court earlier this year.

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Speaker 7: The Major Question doctrine is a doctrine that was used

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Speaker 7: in the past extremely rarely. I mean the Supreme Court

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Speaker 7: maybe invoked it once every five years, only five times

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Speaker 7: before this past year in its whole history, starting around

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Speaker 7: nineteen eighty in cases that were actually quite exceptional for

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Speaker 7: some reason or other. But in the last couple of years,

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Speaker 7: it's a doctrine that's been invoked promiscuously by opponents of regulation,

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Speaker 7: and the Court has shown great interest in embracing it.

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Speaker 7: I mean, it basically says that if an agency decision

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Speaker 7: is going to have vast economic or political significance. It

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Speaker 7: needs to be authorized explicitly by Congress, and that the

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Speaker 7: agents shouldn't be doing it under kind of delegate authority

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Speaker 7: in a somewhat open ended statute. This term, the Court

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Speaker 7: has already invoked it in striking down the Osha vaccine

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Speaker 7: and testing mandate, in bicking down the eviction moratorium, and

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Speaker 7: it obviously played a big role in the argument yesterday.

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Speaker 7: So it's become you know, it's gone from something quite

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Speaker 7: extraordinary that happens where the Court really only deals with

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Speaker 7: her every several years, every five years, so something that

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Speaker 7: ends up like as a central issue in the Supreme

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Speaker 7: Court multiple times a year. And this whole transformation has

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Speaker 7: happened very quickly, i'd say, in the last couple of years.

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Speaker 2: And now West Virginia Attorney General Patrick Morrissey is injecting

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Speaker 2: major questions doctrine into guessed at the ANTIESG debate. We'll

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Speaker 2: be back with more on that right after this quick break.

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Speaker 2: I'm a new Westervelt and this is drilled. Earlier this year,

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Speaker 2: the Security is an Exchange Commission released its proposed climate rule.

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Speaker 2: Here's SEC head Gary Ginsler announcing and explaining that rule

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Speaker 2: on CNBC.

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Speaker 5: We've had this regime for ninety years where investors get

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Speaker 5: to decide on what risk they want to take. Companies

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Speaker 5: make full and fair disclosure, and increasingly companies are disclosing

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Speaker 5: climate risk. And so we're stepping in to help bring

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Speaker 5: some consistency, some standardization with regard to those disclosures, some

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Speaker 5: qualitative disclosures around strategy and governance and the like, but

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Speaker 5: also yes, some metrics as well with regard to their

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Speaker 5: greenhouse gas emissions and the financial effects on their current financials.

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Speaker 2: And let's just say industry was not a fan.

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Speaker 8: Your predecessor has a pretty stark warning in the Wall

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Speaker 8: Street Journal today about the path that you're going down,

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Speaker 8: where he worries that it would draw legal challenges, that

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Speaker 8: it's a matter that should be left up to Congress,

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Speaker 8: that perhaps no single agency should be responsible for setting

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Speaker 8: climate policy, which requires so much more input than just

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Speaker 8: a single agencies determinations. What's your response to those criticisms

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Speaker 8: and to those who feel that this puts at risk

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Speaker 8: your central task of safeguarding capital allocation, Well.

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Speaker 5: Kelly, I'm sorry, I don't accept the premise we at

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Speaker 5: the SEC are just narrowly focused on disclosure and investor

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Speaker 5: protection on one side, and capital formation on the other side,

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Speaker 5: efficiency of the market in the middle. So this is

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Speaker 5: trying to bring some standardization, some consistency to what's already happening.

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Speaker 5: We had our first environmental disclosures in the nineteen seventies.

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Speaker 5: We have a climate risk guidance from twenty ten, so

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Speaker 5: this is trying to build upon that and bring some

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Speaker 5: consistency in this one area. This is so investors are

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Speaker 5: better and for more consistently informed, and so companies on

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Speaker 5: the other side also get the benefit of consistently sort

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Speaker 5: of knowing how to kind of have that conversation with investors.

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Speaker 5: This is not about, with all respect, what some people

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Speaker 5: have said a broader bit about climate policy. It's about

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Speaker 5: disclosure and time tested rules of materiality around disclosure.

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Speaker 2: I don't think it's a freak coincidence that the fossil

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Speaker 2: fuel industry's love affair with ESG ended really ended in

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Speaker 2: twenty twenty one, just about the time the SEC began

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Speaker 2: talking seriously about requiring climate disclosure as opposed to just

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Speaker 2: continuing with the voluntary disclosures that had been in place

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Speaker 2: since twenty ten. In other words, as soon as it

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Speaker 2: looked like ESG might actually mean less money, not more.

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Speaker 2: The industry branded it as won't capital and began looking

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Speaker 2: for ways to get rid of it now. In addition

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Speaker 2: to the dark money funded state treasures pushing policies that

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Speaker 2: borrow their states from doing business with banks or investment

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Speaker 2: firms that are anti fossil fuel, or as they put it,

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Speaker 2: part of the war on energy, Mister Major Questions himself,

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Speaker 2: Patrick Morrissey has filed formal comments about the SEC's proposed

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Speaker 2: climber rule. It includes a whole section entitled Major Questions Doctrine.

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Speaker 2: Even if the relevant statues were ambiguous, the SEC's view

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Speaker 2: of its authority in the proposed rule would violate the

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Speaker 2: Major Questions Doctrine. It reads, an unelected body like the

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Speaker 2: SEC cannot answer major questions like those in the proposed rule.

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Speaker 2: Then it cites West Virginia versus EPA as President, quoting

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Speaker 2: the ruling as saying that the Major Questions Doctrine recognizes

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Speaker 2: that quote in certain extraordinary cases. Both separation of powers

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Speaker 2: principles and a practical understanding of legislative intent and make

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Speaker 2: courts reluctant to read into ambiguous statutory text. The delegation

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Speaker 2: to an agency claimed to be lurking there. And yes,

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Speaker 2: Morrissey's formal comment to the SEC is co signed by

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Speaker 2: a long list of other Republican attorneys general, so we

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Speaker 2: know he's sending out the bat signal to RAGA.

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Speaker 9: Again.

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Speaker 2: That's the Republican Attorney's General Association, which regular listeners of

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Speaker 2: this podcast are probably tired of hearing about already. Morrissey

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Speaker 2: is a member, of course, these leadership positions both in

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Speaker 2: RAGA and its fundraising arm, the Rule of Law Defense Fund.

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Speaker 2: In twenty twenty, those organizations ponied up close to two

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Speaker 2: million dollars for Morrissey's re election campaign. Here's Lisa Graves's

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Speaker 2: former Senate investigator and the head of True North research

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Speaker 2: on RAGA and the push for structural change.

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Speaker 9: Has had enormously distorting effect on US law. It provides

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Speaker 9: a mechanism for corporations to pass money through to help

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Speaker 9: attorneys general in ways that they would not be able

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Speaker 9: to individually solicit for their own campaigns given their role,

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Speaker 9: their regulatory role over those very industries. And that's been

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Speaker 9: going on since RAGA was created back more than twenty

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Speaker 9: years ago now, and it has accelerated under some of

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Speaker 9: the attorneys general who have led it, like Scott Krewitt,

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Speaker 9: who was, in my view, another corrupt individual, someone who

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Speaker 9: was selaxed on ethical rules to say the least, and

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Speaker 9: who was willing to do the bidding of the oil

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Speaker 9: industry in attacking climate legislation and climate rules, even the

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Speaker 9: very modest clean Power Plan to advance the interests of

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Speaker 9: the funders of RAGA.

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Speaker 2: And now here they are pushing back on the pretty

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Speaker 2: minimal requirements of the SEC. So you've got the age

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Speaker 2: of West Virginia going after the EPA and the SEC,

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Speaker 2: the same state's treasure banning any investment firm or bank

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Speaker 2: that's not pro coal all while Joe Manchin, west Virginia's Senator,

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Speaker 2: is trying to ram a pro pipeline's permitting deal through Congress.

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Speaker 2: Here's State treasurer. Riley Moore encapsulating it all in one

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Speaker 2: big dad joke.

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Speaker 4: I'd say here in West Virginia, the only kind of

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Speaker 4: black rock that we like is cold.

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Speaker 2: That's it for this time, Thanks for joining us, and

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Speaker 2: we'll see you back here next week. Drilled is an

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Speaker 2: original Critical Frequency production. The show was created and reported

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Speaker 2: by me Amy Westerveld. Original music and mixing and mastering

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Speaker 2: for this episode by Peter Duff. Artwork is by Matthew Fleming.

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Speaker 2: You can find us online at Drilled podcast dot com.

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