Biden’s SEC pressed to yank sweeping climate proposal: ‘Conflict of interest’

EXCLUSIVE — The Securities and Exchange Commission is being urged by a GOP lawmaker to withdraw a heavily scrutinized green energy proposal over “a potential conflict of interest” and legal concerns.

Internal emails obtained by the Washington Examiner and Fox News show extensive communication and meetings between the SEC and the climate software developer firm Persefoni leading up to the regulator’s March 2022 proposal that would require public companies to disclose their greenhouse gas emissions. Rep. Byron Donalds (R-FL) raised concerns over the relationship in a letter Tuesday to SEC Chairman Gary Gensler while pressing the regulator “to focus on its core mission” and yank the proposed rule — which free-market advocacy groups say could lead to a widespread crackdown on appliances reliant on oil and gas.

“Not only does your agency lack the statutory authority on its face to promulgate, publish and enforce the proposed climate disclosure rule, but there are serious questions as to whether the SEC violated both the letter and spirit of the Administrative Procedures Act in the rule’s development,” Donalds, who sits on the House Financial Services Committee, wrote in the letter to Gensler.

“As laid out in the holding of Business Roundtable vs. SEC, the SEC may not ‘inconsistently and opportunistically frame the costs and benefits of the rule,’” the lawmaker continued, citing a 2011 court ruling against the SEC. “Rather than continuing its jurisdictional expansion efforts at the expense of American taxpayers and markets, I urge you to withdraw this proposed rule and return the agency’s focus to its core mission.”

The letter, which hasn’t been previously reported, is the latest escalation of attempts by Republicans to pressure the SEC to reverse course when it comes to the proposal. By next spring, the SEC will make a decision on the rule, which comes as the Biden administration prioritizes sweeping climate change initiatives to the ire of the GOP.

The proposal is supported by Persefoni and Ceres, a Boston-based nonprofit organization that the Washington Examiner reported has helped shape President Joe Biden’s green energy agenda and gained influence in the highest levels of government. Ceres and Persefoni commissioned a cost-benefit analysis study for the proposal, which repeatedly cited Ceres and Climate Action 100+, a coalition that Ceres helps lead that includes investors claiming to have a staggering $68 trillion in assets.

Ceres was subpoenaed last year by the House Judiciary Committee over concerns by Republicans that its relationship with Climate Action 100+ could mean Ceres is violating antitrust law.

In his letter, Donalds cited emails obtained by Government Accountability and Oversight, a watchdog group, showing that a “concept of the study” was mentioned in an “undocumented” 2021 meeting between the SEC and Persefoni, as well as the lobbying firm Boundary Stone Partners.

“Around the same time, on Oct. 2, 2021, then [SEC] Senior Counsel for Climate and ESG to the Director of the Division of Corporation Finance, Kristina Wyatt contacted Senior Vice President of Strategic Market Engagement at Persefoni, Mike Wallace, and informed him that she mentioned Persefoni to other government agencies to discuss climate cost disclosure initiatives,” Donalds wrote in his letter to Gensler.

“Following Ms. Wyatt’s referrals, Mr. Wallace met with representatives from the Environmental Protection Agency, Department of Defense, Office of Management and Budget, the General Services Administration, and the White House Council on Environmental Quality to discuss Persefoni’s climate management and carbon accounting services,” the lawmaker wrote to Gensler.

Wyatt has since left the SEC to become an employee at Persefoni and helped craft the SEC proposal with the firm at the time, which could financially benefit from its implementation, Fox News reported.

Meanwhile, Donalds is sounding the alarm over how Wyatt and Persefoni’s Wallace in January 2022 “discussed potential job openings at Persefoni,” and just two days later, Wyatt “confirmed her intention to join Persefoni.”

Separate emails reported on by the Washington Examiner show that the SEC was apparently given advance notice of the Persefoni-Ceres study by then-chief sustainability officer Tim Mohin of Persefoni in 2022, just five days before the study was published.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

In an interview with the Washington Examiner, Ceres employee Steven Rothstein denied his group has any “special access” to the federal government and applauded the SEC for “the thoroughness of their diligence” in connection to the proposal.

The SEC did not return a request for comment.

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