There is a political effort underway in our state that if left unchecked could cost the taxpayers of the
state of Oklahoma tens of millions of dollars while throwing into question the promises the state has made to thousands of retired public employees. At issue is an effort by Treasurer Todd Russ to override a vote and settled decision by the Board of Directors for the Oklahoma Public Employees Retirement
System (OPERS), in the name of leveraging the pension funds of our retired public servants as pawns in
an out-of-state political campaign to divest from companies some believe boycott the energy industry.
Members of the Oklahoma State Senate recently held a hearing on this very topic to address concerns
from pensioners, cities, retirement systems, and others over how Treasurer Todd Russ has been implementing House Bill 2034 – specifically the creation of a subjective list of companies he believes boycott energy companies. Just days after the boycott list was released, stories began warning of the millions in unintended costs the list is creating – including OPERS who manage the retirement of tens of thousands of our members.
The Oklahoma Public Employees Association (OPEA) was formed to protect and improve state
employees’ interests. Since OPEA’s creation in 1975, we have made great progress for state employees and refuse to stand idly by as Treasurer Russ diminishes our members’ hard-earned retirement funds, and the promises made by the state to public sector employees, in the name of political activism.
While major financial institutions have received their fair share of media coverage as it relates to their
fiduciary duty to everyday Americans, state elected officials who are attempting to influence the decisions of investment experts have not yet received that same level of scrutiny.
That includes Treasurer Russ, who seems to have neglected his fiduciary duty to Oklahomans and instead
chosen to undermine the will and fiduciary duty of Oklahoma’s pensions, and, if unchecked, could cost taxpayers and retirees millions.
Treasurer Russ’ boycott list was updated in August and includes several large banks and asset managers despite their significant investments in the state – including financing tens of billions of dollars in Oklahoma oil and gas companies and helping hundreds of thousands of pensioners save for retirement. According to the law, state entities – like pensions – are banned from doing business with companies on
the boycott list, in addition to holding stock in any of them.
The treasurer’s boycott list includes Bank of America, JP Morgan Chase, Wells Fargo, BlackRock, State
Street, and Climate First Bank, but does not provide transparent, objective criteria for companies’ inclusion or exclusion on the list.
Notably, the list omits several firms that the Treasurer seemingly prefers, such as Northern Trust, which
voted for more than 80% of climate-related shareholder proposals in 2022 – significantly higher than BlackRock and State Street – and is a member of several of the same climate-related initiatives the Treasurer claims warrant other firms from being banned in the state. Mellon, also omitted from the list, also voted for more climate-related shareholder proposals than BlackRock and State Street.
OPERS responded to the boycott list by conducting an extensive search to replace existing asset
managers – only to come up empty-handed.
Their exhaustive research also found that divesting from BlackRock and State Street would cost the
pension system approximately $10 million, with the potential for even greater losses. This led the OPERS Board of Trustees opted to rightly apply a fiduciary exemption to ensure pensioners and Oklahoma taxpayers did not incur substantial costs or lower returns. After reviewing the facts, the OPERS board unanimously voted in favor of the fiduciary exemption – with the sole exception of Treasurer Russ.
Following the vote, Russ submitted a complaint letter to the OPERS Board and now appears to be working to overturn the vote to the detriment of the pension funds promised to retired state employees.
This post-decision challenge of the Board’s near-unanimous decision – which aligned with the
recommendations of its independent consultants – is unprecedented. And it’s certainly showing Treasurer Russ’ motives: putting politics ahead of our pensions.
Our treasurer appears to be motivated by outside voices. Why else would he be so rigid in these attacks
that will ultimately hurt the citizens of Oklahoma?
Russ is a leading member of the State Financial Officers Foundation (SFOF) and has accepted thousands
of dollars to attend their events. The group – which among its funders is a large amount of right-wing policy organizations with ties to conservative dark money leader Leonard Leo – has been driving much of the public support for Treasurer Russ and his boycott list.
Selling out Oklahoma values for the political support of out-of-state interests is simply wrong.
Treasurer Russ’ political activism, if unchecked, could force Oklahoma down a disastrous route that hurts our state employees. Restricting competition for Oklahoma pensions will only limit the free market and pass higher costs onto taxpayers.
We cannot allow Treasurer Russ to keep playing politics with our pension funds and cost retirees their
financial freedom.
