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Speaking to a private gathering of conservative operatives and fossil fuel advocates in January, a top deputy to Texas Attorney General Ken Paxton gave “the inside story” about how his office bullied Wells Fargo, one of America’s biggest banks, into dropping out of a global initiative to reduce carbon emissions.
The official spoke in January at the exclusive Consumers’ Research Summit in Sea Island, Georgia. Rolling Stone has exclusively obtained audio and documents from the event.
Brent Webster, the First Assistant Attorney General of Texas, recalled how his office moved to cut off lucrative bond business to Wells Fargo. Webster then shared how he, in a private dinner at the governor’s mansion with Gov. Greg Abbott, Paxton, and the bank’s execs, told the bank Texas could “reinstate the bond market” if it left the Net Zero Banking Alliance.
When the Wells Fargo team got flustered, Webster said he threatened an antitrust lawsuit against them, telling the bank’s executives they were this close “to being sued right now.”
After the Texas attorney general launched an antitrust lawsuit against BlackRock and other large asset management firms, Webster said he called up his contact at Wells Fargo and warned, “you guys might be next.” It worked: “They left a week later,” he said. “They left the Net Zero Banking Alliance, and then all the banks followed.”
On the plus side for the banks, once they left the alliance, Paxton allowed them to get municipal bond business again.
Paxton’s office did not respond to Rolling Stone’s request for comment.
In a statement, Consumers’ Research Executive Director Will Hild, who interviewed Webster at the event, said that the organization is “appalled at the lengths that Wall Street’s financial cartels will go to defend their tyranny over consumers,” adding that “we are proud of the courageous work that Brent Webster and Attorney General Paxton’s office have done fighting for Americans against such antitrust abuse. If big banks and asset managers like BlackRock think that they can intimidate those who oppose their misdeeds into silence … they are mistaken.”
Consumers’ Research, a one-time watchdog group that now works to limit consumer protections, has led the fight against environmental, social, and governance (ESG) investing, with support from Supreme Court puppetmaster and billion-dollar money man Leonard Leo. The organization and Leo have worked in coalition with Republican attorneys general, state financial officers, legislators, and national Republican groups to pressure businesses to drop public commitments to ensuring the future habitability of our planet.
Major ESG initiatives undertaken by Wall Street firms like Wells Fargo and BlackRock include membership in global groups like the Net Zero Banking Alliance and Net Zero Asset Managers, which require a commitment to achieving net-zero carbon emissions by 2050. These clean energy alliances became key targets, and ultimately casualties, in conservatives’ “war on woke.”
Of course, corporate climate pledges, like the one from the Net Zero Banking Alliance, and ESG were nowhere close to solving the global climate crisis. The banks never stopped funding the fossil fuel industry. That hasn’t stopped conservatives — ranging from Donald Trump, Republican state officials, and dark money interests — from waging an all-out war on these concepts regardless, in an effort to ensure that no one with any institutional power at all prioritizes climate action.
Webster made clear how easy it is to weaponize the legal apparatus of the state to bring the financial industry to its knees. He urged his allies to do the same: “Anybody who has power over state enforcers or influence over state subpoena power … states should be ramping up right now.”
“We’re Not Recording This, Right?”
As part of their anti-ESG fight, conservatives have argued that, by participating in clean energy alliances, financiers have engaged in illegal boycotts and manipulation of the energy markets, and breached their fiduciary duty to shareholders and retirees to prioritize investment returns above all else.
They have led an efficient and thorough campaign. Conservative think tanks like the Texas Public Policy Foundation and Heritage Action wrote model bills; state legislators affiliated with the American Legislative Exchange (ALEC) worked to pass those bills; upon passage, state treasurers and investment officials in the State Financial Officers Foundation (SFOF) and Republican attorneys general used these laws to launch enforcement actions; and everyone kept up the drumbeat of attack.
Texas, for instance, passed the nation’s first law banning banks from the municipal bond business if they are found to be discriminating against the fossil fuel industry.
Attorneys general have also weaponized federal antitrust laws to launch “unsubstantiated” attacks “against climate initiatives,” as several partners at the law firm Wilson Sonsini put it in an article published earlier this year by Thomson Reuters.
“At bottom, these are nothing more than political attacks, and the courts should quickly end the misuse of the antitrust laws for this political purpose,” they wrote.
In his fireside chat with Hild, from Consumers’ Research, Webster gave a basic outline of his role in initiating Texas’ antitrust lawsuit against BlackRock for allegedly conspiring with coal companies in its investment portfolio to shut down coal production.
Hild wanted more information — the backstory to explain why, after Texas filed suit against BlackRock and asset managers, “within weeks, what might seem unrelated at first,” big banks like Wells Fargo “start dropping like flies” from the Net Zero Banking Alliance. It produced a domino effect, with BlackRock leaving Net Zero Asset Managers, which subsequently ceased all activities.
Webster replied, “We’re not recording this, right? … Please don’t quote me, because I’m telling the inside story on this.”
He then described the leverage he had against Wall Street: potential enforcement actions that could end lucrative profit streams for the banks, and the possibility of long, painful lawsuits.
“They’re all deathly afraid of being sued,” Webster said, explaining: “None of them want to be subject to depositions. None of them want to be subject to discovery.”
Leo Network Powering the Anti-ESG Coalition
Leo’s network has long been the top funder of the Republican Attorneys General Association, which works to elect GOP attorneys general.. Marble Freedom Trust is the primary vehicle through which Leo disburses the $1.6 billion bequeathed to him from billionaire industrialist Barre Seid for the purpose of waging the right-wing movement’s culture war. Seid secretly gifted his surge protector empire to Leo’s dark money trust, before the business sold, creating a historic political advocacy fund for conservatives.
According to The Wall Street Journal, Leo’s Marble Freedom Trust and his consulting firm CRC Advisors have pumped millions into anti-ESG efforts, with much of it going through Consumers’ Research.
CRC Advisors played an active role in the Sea Island event. In planning documents from the Sea Island Resort obtained by Rolling Stone, Maria Marshall, a top Leo lieutenant at CRC Advisors, was listed as the point of contact for billing. A key cog in Leo’s network, the 85 Fund, was listed as the account holder.
While the 85 Fund moved its corporate registration to Texas in 2023, the planning documents still listed its address in Washington, D.C., at the same building where Leo’s organizations have long operated.
Consumers’ Research was originally founded nearly a century ago, in 1929. Just six years after its founding, its workers split to form Consumers Union, which produces the well-regarded Consumer Reports magazine. Meanwhile, Consumers’ Research would denounce unions as communist and the group became a shill for the tobacco industry.
The group was mostly dormant from 2002 to 2013, when it began advocating for conservative causes in court briefs, based on secret funding from Seid, according to leaked documents. Seid was eventually revealed to be the largest funder of Leo’s agenda.
Since 2020, Consumers’ Research has focused on fighting ESG investing and “woke capitalism,” with aggressive million-dollar ad campaigns, research reports, and outreach to officials with any leverage over Wall Street.
Some of the anti-ESG coalition’s biggest partners were in attendance at the Consumers’ Research summit, including representatives from ALEC, Heritage Action, and SFOF. These organizations have all received funding from entities tied to Leo.
According to an analysis from Democracy Forward, the Leo network was ALEC’s largest known donor in 2023. The same year, Hild, Consumers’ Research’s director, said that Consumers’ Research was the largest donor to SFOF.
The ESG Fig Leaf
For the past several years, as the Biden administration pursued greater action on climate change, Wall Street sought both to hedge its financial risks, and profit from new financial products touting ESG investing and diversity, equity, and inclusion — marketing them to the climate and socially conscious consumer.
ESG assesses a company or investment decisions through a sustainability framework, in order to bolster long-term growth and reduce harm. Socially responsible investing has existed in various forms for decades and was implemented by many banks and pension funds through the 2010s, but it really became mainstream during the Biden administration, as climate change took on a renewed urgency.
Left-wing critics of ESG say these products are merely a fig leaf helping Wall Street evade regulatory oversight and greenwash their continued investments in the fossil fuel industry, and there is some truth to this.
Take for example, a chief target of the Leo coalition — BlackRock, the biggest pension fund manager in the world, with $12.5 trillion in assets under management. BlackRock has been at the forefront of ESG evangelism, while at the same time holding $400 billion in fossil fuel industry investments.
Right-wing critics argue that financial performance should be the only factor driving investment consideration. Though conservatives decry ESG as free market malpractice harming the almighty shareholder profit, studies by McKinsey and Bain & Company have found that ESG boosts financial performance.
On a broader level, of course, allowing for maximum climate devastation will be both immensely costly for the citizens of Earth, as well as for business interests.
At one point at the Consumers’ Research summit, Webster spoke about the push to have Republican-led states end any investments with BlackRock, arguing that currently, “red states are funding the war against us.”
Webster acknowledged that some state investment officials managing retirement funds for public employees have been uncomfortable with the idea of ending their arrangements with BlackRock, on the basis that it could hurt their retirement systems’ finances.
“The biggest problem we have right now is both of our retirement funds, and I’m sure, I’m glad I’m not being quoted here, but they do not have the courage to stand up to BlackRock,” he said.
He argued that’s why Republican governors and other officials with control over state retirement systems must appoint people to those systems who view BlackRock as a problem.
“That’s the only way we’re going to change this system,” he said. “I’ll tell you right now, the pension funds in the red states and the bond market in the red states is larger than anything BlackRock has. You have more power than you have ever realized.”
Webster continued, “All of their security comes from your pensions and your bond markets. That’s where the security for their risky investments come from. If you mess with their security, they have to change their entire business model.”
