Montana sues nonprofit over ESG investing to claw back taxpayer funds

Montana Attorney General Austin Knudsen filed a lawsuit Thursday against a nonprofit group of attorneys general seeking to recoup state money after the organization allegedly made investments that violated state law.

The filing in Montana District Court alleges the National Association of Attorneys General, a bipartisan organization that has faced increased accusations from Republicans of liberal bias, refuses to return taxpayer funds in its possession after making investments in environmental, social and corporate governance — or ESG — funds that violate Montana law.

“NAAG does not comply with Montana law governing how public money must be deposited or invested,” Mr. Knudsen’s lawsuit said. “NAAG operates without oversight from the public officials and entities the Montana Legislature has created to safeguard Mon­tana’s public funds.”

He said NAAG is in possession of legal settlements entered by Montana and other current or former member states totaling $100 million meant to be split among them.  

Mr. Knudsen, a Republican, is seeking court intervention to determine what share of NAAG’s assets are Montana’s public funds and to have them returned.

NAAG did not immediately respond to a request for comment.

The association has previously denied using state funds for ESG investing, a financial strategy that takes climate change and social justice politics into consideration that Republicans condemn as “woke capitalism.”

The legal action comes amid heightened scrutiny of NAAG by Republican-led states, some of which have left the organization over accusations the nonprofit has recently pivoted to the left.

Utah Attorney General Sean Reyes, a Republican, was first to sue NAAG earlier this year related to alleged ESG investments that may go against laws in his state.

Source: WT