West Virginia’s Attorney General Patrick Morrisey (R), a leading critic of investing that incorporates environmental, social, and governance (ESG) factors, is considering a U.S. Senate rematch against incumbent Senator Joe Manchin (D) in 2024.
Morrisey lost the 2018 Senate race to Manchin by just 3.3% in a state former President Trump won by 30% in 2016 and 39% in 2020. Now the AG is attacking the senator for voting in favor of the Inflation Reduction Act (IRA) in 2022, which provides an unprecedented amount of funding for renewable energy to address climate change. “If I were to go into the U.S. Senate,” Morrisey has said, “we’d be ready on day one to take on the woke culture, to lead against the Green New Deal….”
Last month, the AG accepted an award from the American Legislative Exchange Council (ALEC), the bill mill where corporations and state lawmakers meet behind closed doors to draft model legislation designed to weaken unions, dismantle environmental protections, restrict legal protest, and deny healthcare funding.
ALEC presented Morrisey with its new Scalia Award for Restoring the Balance of Government, named after the late conservative Supreme Court Justice Antonin Scalia. The recognition came in part because the AG “challenged the Environmental Protection Agency (EPA) in a landmark Supreme Court case that reined in the power of federal agencies like the EPA and unelected Washington bureaucrats.”
In 2015, Morrisey sued the EPA with support from 17 fellow Republican AGs. In 2022, the right-wing majority on the court ruled in favor of these plaintiffs in West Virginia v. EPA, which prevents the agency from regulating greenhouse gas emissions under the federal Clean Air Act.
Morrisey’s attacks on ESG investing are consistent with his ongoing anti-environmentalism and align closely with ALEC’s own aggressive approach to the practice. As the Center for Media and Democracy (CMD) has reported, the organization is pushing model legislation that would prevent companies with 10 or more employees from qualifying for state contracts if they take into account any “social, political, or ideological interests” to limit their commercial relations with fossil fuel energy, logging, mining, or agriculture—and instructs legislatures to “insert additional industries if needed.”
Now Morrisey has set his sights on undermining companies that have made reducing climate risks part of their business model. He has joined with 19 other GOP attorneys general in attacking BlackRock, one of the world’s largest investment companies, for using ESG criteria in investing public pension funds. In an August 2022 press release announcing the letter they sent BlackRock, he said, “this is an example of a company pushing their climate agenda, using investments to force companies and people to abide by their ideology.”
Morrisey has also threatened to sue the Securities and Exchange Commission (SEC) if it requires companies to report on greenhouse gas emissions and other ESG matters.
In November 2022, 17 Democratic attorneys general wrote to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services to push back against the GOP attack, forcefully arguing that “for over twenty years, the finance industry has understood—and studies have confirmed—that consideration of ESG factors yields important information about risks and rewards, which leads to greater value for beneficiaries.”
These Democratic officials criticize Morrisey and other Republican attorneys general for failing to recognize the costly climate risks to companies that don’t consider ESG principles in their investment decisions. Democrats also support a recent rule by the SEC to “create greater transparency” to prevent investment companies from “greenwashing” or exaggerating their commitments to carbon reduction.
Morrisey is also one of 17 GOP attorneys general to sue the EPA for allowing California to set its own emissions standards for vehicles, claiming that one state does not have the right to set its own rules under a federal law.
Opposite Parties, Similar Stances
For his part, in finally agreeing to vote for the IRA and the billions it allocates to addressing climate change, Manchin walked a fine line between his own company’s and state’s interests in selling coal and helping to deliver on one of the Democrats’ and Biden’s most significant and sorely needed pieces of legislation.
As CMD noted in 2021, “Manchin is one of many members of Congress who are personally invested in the fossil fuel industry…. As of late 2019, he had more money invested in dirty energy than any other senator.”
In return for his vote last August, Manchin extracted concessions from the Democratic Senate leadership that were supposed to hasten permits for Mountain Valley Pipeline, a long-delayed gas pipeline set to pass through West Virginia, by making it part of the 2023 budget bill.
When Senate Republicans subsequently prevented that in December, Manchin was livid, saying, “the decision to strip out the permitting item from the budget bill was purely political, because Senate Minority Leader Mitch McConnell and many other Republicans did not want to give [me] a big victory.” A new bill to greenlight the pipeline is expected to be reintroduced this year.
One issue on which Manchin and Morrisey agree is that they both oppose proposed new regulations by the SEC that would create disclosure requirements for firms making ESG investments.
In announcing its proposal, the SEC wrote, “The proposed amendments seek to… require funds and advisers to provide more specific disclosures in fund prospectuses, annual reports, and adviser brochures based on the ESG strategies they pursue. Funds focused on the consideration of environmental factors generally would be required to disclose the greenhouse gas emissions associated with their portfolio investments.”
In a 17-page “comment” submitted to the SEC in opposition to its proposed rule, Morrisey and 20 other AGs claim it would place onerous disclosure and reporting requirements on public pension funds and the investment firms that advise them. He has pledged that West Virginia would “go to court to defend against any regulatory overreach by the SEC or any other agency in the name of climate disclosures” and has accused the Biden administration of wanting to “radically transform the SEC and other agencies run by unelected bureaucrats and make them champions of climate change, regardless of what those agencies’ functions are.” He has also threatened the SEC with another multi-state lawsuit if it adopts the ESG rule.
Morrisey’s attempts to point out a clear contrast between him and Manchin if they face each other again in the upcoming Senate race may fail, since the sitting senator also opposes the proposed rule. Noting that it represents a departure from the SEC’s mission, he says that it would place excessive burdens for disclosure and reporting on corporations, and adds that “the most concerning piece of the proposed rule is what appears to be the targeting of our nation’s fossil fuel companies.”
Other candidates have announced or are considering a run in the GOP primary to determine who faces Manchin, but if Morrisey is the nominee, the fossil fuel industry could face a tough choice. Manchin raised more than any other member of Congress from oil and gas interests in the 2022 election cycle, bringing in almost $741,000.
The Republican Attorneys General Association (RAGA), a 527 group that has helped Morrisey organize his efforts against the EPA, takes large contributions from the fossil fuel industry. A CMD study found that “from 2017 through mid-2019, oil, gas, and coal companies, trade associations, fossil fuel utilities, and industry executives donated over $6.7 million to RAGA.” And in his 2018 Senate race against Manchin, Morrisey actually outpaced his opponent in campaign contributions from the oil and gas industry.
While both Manchin and Morrisey actively support fossil fuel interests, a win by Morrisey could help the GOP reclaim its Senate majority. With that in mind, he likes to remind West Virginians that he only lost by 20,000 votes last time around—and that was before Manchin voted in favor of the most massive and impactful clean energy bill ever passed in the U.S.
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