Bonds

Oklahoma treasurer sued over documents tied to anti-ESG law

Oklahoma Treasurer Todd Russ, his office and his chief of staff were sued alleging they withheld documents related to the state’s anti-ESG law.

Oklahoma Treasurer Todd Russ, his office and his chief of staff and deputy treasurer, Jordan Harvey, were sued last week by an open-records company that accused them of withholding and possibly destroying documents related to the state’s controversial law targeting firms that employ environmental, social and governance-minded investment practices.

The complaint offers a glimpse of talking points and notes apparently from an outside party to state officials about ESG-related activities by BlackRock, Citi, Bank of America and JP Morgan.

Oklahoma’s Energy Discrimination Elimination Act of 2022, which prohibits state and local government contracts worth $100,000 or more with companies determined by the Oklahoma Treasurer’s Office to be “boycotting” the fossil fuel industry, was permanently blocked in July by an Oklahoma County District Court judge. The injunction stemmed from a lawsuit brought by a state pension recipient.

Under the law, Russ had created a list of financial firms that were restricted from doing business with the state. The list included Barclays, Bank of America, JP Morgan Chase, Wells Fargo, BlackRock, State Street Corp., and Climate First Bank. Wells Fargo resigned in May 2023 as lead underwriter for a $500 million Oklahoma Turnpike Authority revenue bond deal after it landed on the list and was replaced with RBC Capital Markets.

Alabama-based FOIA Professional Services, LLC filed the complaint Oct. 17 in Oklahoma County District Court. The company manages public document requests for companies who want to access any information made legally available by the Freedom of Information Act.

The complaint said the treasurer’s office only partially complied with its requests for documents that are “related to or discuss divesting from or limiting contracts with financial institutions” and regarding “determinations of which financial institutions are or are not listed in a list of financial companies prepared by” the Office of the State Treasurer.

The company specifically accused the treasurer of withholding and possibly destroying documents sent to Harvey’s personal account from outside parties, emails that she later forwarded to her state account and then to accounts at Gov. Kevin Stitt’s office.

The documents are attached to an email from Harvey to the governor’s office with the message, “These are from our friends in DC that came about two months ago to meet with Treasurer Ross and the Governor…”

“On information and belief, the emails from the ‘friends in DC’ to defendant Harvey at her personal email account either have been illegally withheld by one or more defendants or have been illegally destroyed by defendant Harvey,” the company said in the lawsuit.

The documents include a list of questions for BlackRock about its ESG-related activity, as well as “likely” responses to the questions and proposed counters to those responses.

The emails were sent on May 10, 2023, reportedly around the time that Stitt was set to meet with BlackRock representatives about the firm’s inclusion on Russ’s restricted list, according to the lawsuit.

“Hope this helps the governor,” Harvey said in one of the emails.

A second round of Harvey emails, sent on May 30, 2023, included pages of notes on ESG-related activities by Citi, Bank of America and JP Morgan.

A later August email is a memo “analyzing and discussing the Oklahoma Employee Retirement System’s vote to claim a fiduciary exemption to the [new anti-ESG law] and continue investing with BlackRock [and State Street] despite its inclusion on the Office’s Restricted Financial Company List.” The memo includes a letter sent at Russ’s request from the Oklahoma State Pension Commission to OPERS leaders that criticizes the request for an exemption.

The treasurer’s office has not explained “why no emails from the ‘friends in DC’ were produced,” the complaint said, and has not responded to a Sept. 12 request to either show “Harvey’s receipt of the three documents related to ESG investing at her personal email address or state why the office was withholding the emails.”

A spokesperson for the treasurer said the office “works diligently with multiple organizations in an effort to provide thousands of documents on a regular basis. It is deeply disappointing that an out-of-state company is using Oklahoma’s Open Records Act, a sunshine law designed to ensure transparency for the people of Oklahoma for the benefit of unknown out-of-state entities.”

Neither FOIA Professional Services nor its attorney at Doerner, Saunders, Daniel & Anderson, LLP responded to requests for comment.

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