Saturday, October 1, 2022


The National Association of Attorneys General, known as NAAG, is under withering fire on several fronts.

The grounds for criticism are easy to find. While NAAG purports to be a nonpartisan forum for state attorneys general, it has increasingly become a “left-wing laundry” that passes off progressive initiatives as though they were bipartisan. And then there is the fact that NAAG has amassed hundreds of millions in assets from consumer protection cases brought by states. The Wall Street Journal has dubbed this “the Attorneys General Racket” — with accompanying complaints from consumer advocates who think the money is coming from victims, and questions about whether NAAG can hold these assets consistent with state law. States are starting to demand that the money be given back.

These are all existential threats to NAAG, but I recently wrote to every state treasurer in the nation because of a different problem: My grave concern is that NAAG is making it impossible for treasurers to do their jobs and fulfill their legal duties.

As a former state treasurer, I am keenly aware of the duty of treasurers to examine and accurately report the financial assets and obligations of their state. And documents that have become public this year show that financial reports filed by state treasurers are almost certainly inaccurate because NAAG has been managing, investing and lending public money with an almost total lack of transparency or accountability.

The key to all of this is that NAAG has repeatedly identified its hundreds of millions in assets as being state money that is being held at NAAG as a member service, separate from NAAG’s operating budget. That means that the money needs to be formally analyzed and recorded by treasurers who have a duty to examine and accurately report the financial assets of their states.

Yet NAAG is holding its millions off the traditional books. And a recent report to NAAG from Prime Buchholz, one of their vendors, shows that NAAG is investing this money in things far beyond what most states might allow, including investments like “international equity,” “private capital” and “flexible capital (hedge).” Moreover, NAAG seems to be holding debt obligations against state finances. Public documents indicate NAAG gives “grants” to finance public investigation and lawsuits, with states being contractually obligated to pay the money back upon the completion of a case.

In multiple different ways, the money and operations at NAAG are putting state treasurers in a perilous position and opening the door to the mismanagement of public funds. Treasurers must act immediately to ensure that they can fulfill their duties going forward and correct previously inaccurate filings. At a minimum, this means demanding answers from NAAG about its handling of state resources and clear accounting of how much public money NAAG is holding, state by state.

We talk a lot as conservatives about separation of powers, checks and balances, and government accountability. We do not trust public officials to run things in the shadows, without oversight or disclosure. And that is why we should all be deeply concerned about what is happening at NAAG, with its hide-the-ball financial shenanigans and corner cutting.

When we rail against the unaccountable administrative state, left-leaning bureaucrats and cannons of money being blasted around by left-wing politicians without oversight or limits, we are talking about exactly what NAAG is doing with our public money right now. These types of shell games and hide-the-ball routines don’t just put treasurers and other elected officials at risk of being in violation of their duties and responsibilities; they contravene all the core principles that we hold dear. And it is high time we demand some accountability and send a message, especially with over a quarter-billion dollars on the line.

• Ken Blackwell is the former Ohio state treasurer.

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