CHARLESTON — West Virginia Attorney General Patrick Morrisey has joined a coalition of 25 states in suing the U.S. Department of Labor over a recently issued rule governing certain investment practices.
The coalition says the 2022 Investment Rule (Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights) pushes a woke, left-wing agenda that inappropriately promotes environmental, social and governance initiative, irrationally contradicts the 2020 Investment Rule and offends the Employee Retirement Income Security Act.
The complaint was filed January 26 in federal court in Amarillo, Texas. The DOL and Secretary Martin J. Walsh are named as defendants.
The new rule becomes effective Jan. 30. At stake is the retirement security for tens of millions of Americans.
“The Biden administration will stop at nothing to further their woke climate agenda and so-called diversity measures at the expense of pension holders’ bottom line – and in likely violation of pension fund managers’ fiduciary duties,” Morrisey said. “We will vigorously fight this and all regulatory overreach as this administration tries to establish rules to advance their woke agenda.”
Preceding the lawsuit was a letter Morrisey and 22 other states sent to the DOL in December 2021 raising concerns about the rule. The coalition urged DOL’s Employee Benefits Security Administration not to adopt the rule because it encourages and “may in fact” require fund managers to consider ESG factors when making decisions about where and how to invest.
The rule “would allow employers and investment managers to invest employee retirement savings in a way that benefits social causes and corporate goals even if it adversely affects the return to the employee.” And by “allowing employers and investment managers to consider ESG factors,” the coalition says the DOL turns “what should be a financial decision into a political one.”
“Investment managers should only look at the economic value of the investment, not whether it advances this administration’s leftwing woke climate change agenda,” Morrisey said. “The Biden administration can try to spin this any which way to support their narrative, but this is plain and simple: they are circumventing Congress and pushing backdoor liberal policies to take hostage the pension funds of millions of hard working Americans, all to advance their ESG agenda.”
Morrisey says a December 2021 letter sent to the DOL by the National Center for Public Policy Research’s Free Enterprise Project shows ESG investing costs pension holders more and leads to lower returns.
Morrisey joined the Utah-led lawsuit with attorneys general from Alabama, Alaska, Arkansas, Florida, Georgia, Indiana, Idaho, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, South Carolina, Tennessee, Texas, Virginia and Wyoming. Other plaintiffs are Liberty Energy, Liberty Oilfield Services, Western Energy Alliance and James R. Copland, a participant in a retirement plan subject to the Employment Retirement Income Security Act of 1974.
U.S. District Court for the Northern District of Texas case number 2:23-cv-16-Z