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EXCLUSIVE: Investment Giants Leveraged Red State Universities’ Endowment Funds To Back Anti-Oil Agenda, Report Finds

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From the Daily Caller News Foundation 

 

By Jason Cohen

Several asset managers leveraged two major Texas university systems’ endowment funds to advance anti-fossil fuel shareholder proposals in 2022 and 2023, according to a report from the conservative watchdog group American Accountability Foundation (AAF).

BlackRock-owned Aperio Group, Cantillon, former Vice President Al Gore-chaired Generation Investment Management, GQG Partners and JP Morgan Asset Management collectively manage approximately $4 billion for The University of Texas/Texas A&M Investment Management Company (UTIMCO) as of July, which handles the university systems’ endowments. Despite the company’s policy against it and Texas’ status as the leading crude oil and natural gas-producing state, UTIMCO’s asset managers backed over 150 shareholder resolutions under the environmental, social and governance(ESG) umbrella, including proposals that could undermine the oil and gas industry, according to documents AAF obtained through a public records request and shared exclusively with the Daily Caller News Foundation.

“Once again, woke ESG ideology has infected a public institution and hijacked its money for their own purposes. This is an outrageous betrayal of the public’s trust,” AAF president Thomas Jones told the DCNF. “[Republican Texas] Gov. Greg Abbott must take immediate action to end this nonsense. He must shake up the leadership at UT/A&M that let this happen and use his influence with UTIMCO to ensure that it never happens again.”

UTIMCO told the DCNF that the ESG and diversity, equity and inclusion (DEI)-related votes violate “a long-standing policy that prohibits using the endowments’ economic power to advance social or political agendas” and that a review found they consist of 0.3% out of around 45,000 proxy votes in recent years. The endowment manager added that it has since modified its guidelines after finding the violative votes and will impose them on all of its third-party investment managers before future proxy votes, and revoking voting authority for those that cannot follow them.

The company’s asset managers voted in favor of a total of 159 shareholder proposals between them that include “racial and gender pay gap reports, efforts to defund conservative candidates and pro-business trade associations, radical climate policy, targeting of gun purchasers, and proabortion initiatives,” according to the watchdog.

UTIMCO oversees the largest public endowment fund in the U.S., managing over $76 billion as of Aug. 31.

“UTIMCO’s mission is to ‘generate superior long-term investment returns to support The University of Texas and Texas A&M University Systems,’ yet these votes endorse political agendas that run contrary to the Systems’ best interests,” American Energy Institute CEO and former Republican Texas state Rep. Jason Isaac told the DCNF. “By supporting proposals that harm American energy producers, UTIMCO’s fund managers are violating their fiduciary responsibility.”

Texas leads the nation in crude oil and natural gas production and in 2023 was responsible for 43% of crude oil output, according to the U.S. Energy Information Administration. However, AAF found many examples of UTIMCO’s asset managers voting in favor of proposals aimed at reducing greenhouse gas emissions (GHG) emissions and other actions to mitigate so-called climate change, which the watchdog alleges comes at the expense of producing value for investors.

For instance, at ExxonMobil’s May 2023 yearly shareholder meeting, Aperio Group voted in support of a proposal to recalculate its GHG emissions to account for the assets it has sold. The resolution asserted that “the economic risks associated with climate change exist in the real world rather than on company balance sheets” and argues that the investments ExxonMobil sells may lower emissions on paper but that they fail to actually help achieve the goal of keeping global temperatures from rising by 1.5 degrees Celsius — which is an objective of the 2015 Paris Climate Agreement — potentially exposing the company and its stakeholders to what it calls “climate risk.”

Some of Aperio Group’s clients have access to customize their individual proxy voting policy, according to BlackRock. BlackRock itself voted against this ExxonMobil proposal on behalf of most of its clients.

AAF’s “report on UTIMCO’s investment practices should alarm every Texan who values our state’s proud oil and gas industry,” Texas Railroad Commissioner Wayne Christian told the DCNF. “It’s outrageous to see Texas university investments being used to support radical ESG agendas, decarbonization, and dangerous policies like Net Zero and the Paris Accord, which threaten our energy independence and economy. We must put an end to the woke political agendas that undermine the very foundation of Texas’ success and ensure our investments align with the values of hard-working Texans.”

Moreover, at defense contractor Raytheon Technologies’ yearly shareholder meeting in May 2023, J.P. Morgan Asset Management backed a proposal urging the company to publish a report on efforts to reduce GHG emissions in alignment with the Paris Climate Agreement.

“Raytheon Technologies creates significant carbon emissions from its value chain and is exposed to numerous climate-related risks,” it states. “Failing to respond to this changing environment may make Raytheon less competitive and have a negative effect on its cost of capital and shareholders’ financial returns.”

Isaac told the DCNF that UTIMCO’s “managers are discriminating against fossil fuel” companies through ESG investing based on the definition of “boycott” in Texas’ Senate Bill 13, which Abbot signed in 2021 and the former representative said he helped create.

The bill defines boycotting energy companies as refusing to engage or ending business with a company involved in fossil fuels “without an ordinary business purpose.” It also specifies actions aimed “to penalize, inflict economic harm on, or limit commercial relations with a company because the company” does business related to fossil fuels and fails to “pledge to meet environmental standards beyond applicable federal and state law.”

Isaac added that the asset managers “should be held accountable and placed on Texas’ list of “financial companies that boycott energy companies,” which mandates Texas public investment entities subject to SB 13 “avoid contracting with, and divest from, these companies unless they can demonstrate this would conflict with their fiduciary duties.”

The S&P Global Clean Energy Index, which includes companies that engage in energy production from renewable sources, has fallen about 7% so far in 2024, while the S&P 500 Energy Index, which features many oil and gas companies, has risen close to 3% in that same time.

Louisianans’ pension funds were similarly leveraged to push climate-related proposals within publicly traded companies, the DCNF reported in April, based on another public records request by AAF.

“UTIMCO’s asset managers’ apparent promotion of leftist objectives, including ESG, is extremely troubling and contrary to Texas law banning boycotts and discrimination against fossil fuels. The legislature must exercise oversight and hold UTIMCO accountable,” Republican Texas state Rep. Brian Harrison told the DCNF. “Governmental bodies, including their proxies, should not pursue objectives that harm the Texas economy and go against our values.”

Cantillon, GQG Partners, Texas A&M and Abbot’s office did not respond to the DCNF’s requests for comment. Aperio Group, Generation Investment Management, JP Morgan Asset Management and the University of Texas declined to comment.

Business

Virtue-signalling devotion to reconciliation will not end well

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From the Fraser Institute

By Bruce Pardy

In September, the British Columbia Supreme Court threw private property into turmoil. Aboriginal title in Richmond, a suburb of Vancouver, is “prior and senior” to fee simple interests, the court said. That means it trumps the property you have in your house, farm or factory. If the decision holds up on appeal, it would mean private property is not secure anywhere a claim for Aboriginal title is made out.

If you thought things couldn’t get worse, you thought wrong. On Dec. 5, the B.C. Court of Appeal delivered a different kind of upheaval. Gitxaala and Ehattesaht First Nations claimed that B.C.’s mining regime was unlawful because it allowed miners to register claims on Crown land without consulting with them. In a 2-to-1 split decision, the court agreed. The mining permitting regime is inconsistent with the United Nations Declaration on the Rights of Indigenous People (UNDRIP). And B.C. legislation, the court said, has made UNDRIP the law of B.C.

UNDRIP is a declaration of the United Nations General Assembly. It consists of pages and pages of Indigenous rights and entitlements. If UNDRIP is the law in B.C., then Indigenous peoples are entitled to everything—and to have other people pay for it. If you suspect that is an exaggeration, take a spin through UNDRIP for yourself.

Indigenous peoples, it says, “have the right to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired… to own, use, develop and control, as well as the right to “redress” for these lands, through either “restitution” or “just, fair and equitable compensation.” It says that states “shall consult and cooperate in good faith” in order to “obtain free and informed consent prior to the approval of any project affecting their lands or territories and other resources,” and that they have the right to “autonomy or self-government in matters relating to their internal and local affairs, as well as ways and means for financing their autonomous functions.”

The General Assembly adopted UNDRIP in 2007. At the time, Canada sensibly voted “no,” along with New Zealand, the United States and Australia. Eleven countries abstained. But in 2016, the newly elected Trudeau government reversed Canada’s objection.

UN General Assembly resolutions are not binding in international law. Nor are they enforceable in Canadian courts. But in 2019, NDP Premier John Horgan and his Attorney General David Eby, now the Premier, introduced Bill 41, the Declaration on the Rights of Indigenous Peoples Act (DRIPA). DRIPA proposed to require the B.C. government to “take all measures necessary to ensure the laws of British Columbia are consistent with the Declaration.” The B.C. Legislature unanimously passed the bill. (The Canadian Parliament passed a similar bill in 2021.)

Two years later, the legislature passed an amendment to the B.C. Interpretation Act. Eby, still B.C.’s Attorney General, sponsored the bill. The amendment read, “Every Act and regulation must be construed as being consistent with the Declaration.”

Eby has expressed dismay about the Court of Appeal decision. It “invites further and endless litigation,” he said. “It looked at the clear statements of intent in the legislature and the law, and yet reached dramatically different conclusions about what legislators did when we voted unanimously across party lines” to pass DRIPA. He has promised to amend the legislation.

These are crocodile tears. The majority judgment from the Court of Appeal is not a rogue decision from activist judges making things up and ignoring the law. Not this time, anyway. The court said that B.C. law must be construed as being consistent with UNDRIP—which is what Eby’s 2021 amendment to the Interpretation Act says.

In fact, Eby’s government has been doing everything in its power to champion Aboriginal interests. DRIPA is its mandate. It’s been making covert agreements with specific Aboriginal groups over specific territories. These agreements promise Aboriginal title and/or grant Aboriginal management rights over land use. In April 2024, an agreement with the Haida Council recognized Haida title and jurisdiction over Haida Gwaii, an archipelago off the B.C. coast formerly known as the Queen Charlotte Islands. Eby has said that the agreement is a template for what’s possible “in other places in British Columbia, and also in Canada.” He is putting title and control of B.C. into Aboriginal hands.

But it’s not just David Eby. The Richmond decision from the B.C. Supreme Court had nothing to do with B.C. legislation. It was a predictable result of years of Supreme Court of Canada (SCC) jurisprudence under Section 35 of the Constitution. That section guarantees “existing” Aboriginal and treaty rights as of 1982. But the SCC has since championed, evolved and enlarged those rights. Legislatures can fix their own statutes, but they cannot amend Section 35 or override judicial interpretation, even using the “notwithstanding clause.”

Meanwhile, on yet another track, Aboriginal rights are expanding under the Charter of Rights and Freedoms. On the same day as the B.C. Court of Appeal decision on UNDRIP, the Federal Court released two judgments. The federal government has an actionable duty to Aboriginal groups to provide housing and drinking water, the court declared. Taxpayer funded, of course.

One week later, at the other end of the country, the New Brunswick Court of Appeal weighed in. In a claim made by Wolastoqey First Nation for the western half of the province, the court said that Aboriginal title should not displace fee simple title of private owners. Yet it confirmed that a successful claim would require compensation in lieu of land. Private property owners or taxpayers, take your pick.

Like the proverb says, make yourself into a doormat and someone will walk all over you. Obsequious devotion to reconciliation has become a pathology of Canadian character. It won’t end well.

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Vacant Somali Daycares In Viral Videos Are Also Linked To $300 Million ‘Feeding Our Future’ Fraud

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From the Daily Caller News Foundation

By Melissa O’Rourke

Multiple Somali daycare centers highlighted in a viral YouTube exposé on alleged fraud in Minnesota have direct ties to a nonprofit at the center of a $300 million scam, the Minnesota Star Tribune reported Thursday.

The now-infamous videos from YouTube influencer Nick Shirley, posted Dec. 26, showed several purported Somali-run daycare centers receiving millions in taxpayer funds despite little evidence that children were actually present at the facilities. Now it turns out that five of the 10 daycare centers Shirley visited operated as meal sites for Feeding Our Future, the Minnesota-based nonprofit implicated in a massive fraud scheme that has already produced dozens of convictions, the outlet reported.

Between 2018 and 2021, those five businesses received nearly $5 million from Feeding Our Future, the outlet reported. While none of the centers in Shirley’s video have been legally accused of wrongdoing, the revelations underscore the sprawling web of fraud engulfing the state. (RELATED: Somalis Reportedly Filled Ohio Strip Mall With Potential Fraudulent Childcare Centers)

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Federal prosecutors have charged over 70 individuals — mostly from the Somali community — with stealing more than $300 million from the Federal Child Nutrition Program through Feeding Our Future. During the COVID-19 pandemic, the program funded sites across Minnesota to provide meals to children. Prosecutors say leaders of Feeding Our Future, along with dozens of associates who ran sponsored “meal sites,” submitted false or inflated meal counts to claim reimbursements.

One facility featured in Shirley’s video, the Minnesota Best Childcare Center, received $1.5 million from Feeding Our Future, according to the Minnesota Star Tribune.

Minnesota Best Childcare Center, which has been licensed by the state since 2013, did not respond to the Daily Caller News Foundation’s request for comment.

Other daycares featured in Shirley’s video have been cited dozens of times for rule violations while continuing to receive millions in state funding. The now-infamous Quality “Learing” Center was cited for 121 violations in the past three years, including for failing to report a “death, serious injury, fire or emergency as required,” according to the Star-Tribune.

The paper’s investigation found that six of the facilities featured by Shirley were either closed or employees did not open their doors.

Following that exposé, which has accumulated more than 135 million views on X, the Trump administration announced it would freeze all childcare disbursements to Minnesota while federal officials review how taxpayer dollars have flowed to licensed providers.

The fraud allegations extend beyond childcare, with prosecutors claiming millions in taxpayer funds were also stolen from Minnesota’s Housing Stabilization Services and autism treatment programs. Federal prosecutors also estimate that as much as half of the roughly $18 billion Minnesota has spent since 2018 on 14 Medicaid programs may have been siphoned off by fraudsters.

Even the state’s assisted living program has come under scrutiny, with Republican state Rep. Kristin Robbins warning that individuals connected to the Feeding Our Future scheme continue to receive millions in taxpayer funds.

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