The Daily Signal - Indiana’s Aggressive Divestment From China

Episode Date: October 16, 2024

State leaders in Indiana have taken significant steps to divest from China and from the environmental, social, and governance agenda.  “We have the good fortune in Indiana to have a Legislature that is on top of making sure that we divest from Chinese entities and from ESG-focused funds,” Indiana state Comptroller Elise Nieshalla says.  The ESG agenda has benefited China through its promotion of solar and wind energy, and electric vehicle batteries, all which China mass produces.  While some state asset managers are promoting investment in solar panels and EV batteries for electric vehicles in the name of “clean energy,” Nieshalla contends the methods China is using to produce those goods are far from clean.  “I think we have seen a true hypocrisy,” she says, “because while … the whole ESG movement has been putting intense pressure on the United States toward renewable energy and to move away from reliable energy—i.e., coal, oil and gas—they are making significant investments in fossil fuels in China, India, Brazil, and [those nations] do not implement the clean energy technology that we do with fossil fuels.”  The energy agenda moving away from coal, oil, and gas is not only benefiting China, but also harming the U.S. economy at a time when the U.S. is burdened with a national debt of more than $35 trillion.  Nieshalla joins “The Daily Signal Podcast” to discuss the ways Indiana has successfully divested from China and the ESG agenda, and how other states can follow suit.  Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Daily Signal podcast for Wednesday, October 16th. I'm Virginia Allen. State leaders in Indiana have taken significant steps to divest from the Chinese Communist Party and the ESG agenda. I recently had the chance to sit down with Indiana State comptroller, Elise Nishala, at a conference, to talk about the specific ways that the state of Indiana has said, no, we're going to break our ties with China, and we're going to break our ties. with ESG, which stands for environmental, social, and governance. Elise Nishala joins me today on the show to explain how Indiana is doing this, and also to explain how these actions are not only improving the economy in Indiana,

but provide a roadmap for other states to do the same. Stay tuned for our conversation after this. As conservatives, sometimes it feels like we're constantly on defense against bad ideas. Bad philosophy, revisionist history, junk science and divisive politics. But here's something I've come to understand. When faced with bad ideas, it's not enough to just defend. If we want to save this country, then it's time to go on offense.

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Joining me now is Indiana State CompTroller. Elise Ishala. Thank you so much for being here. Really, really appreciate your time. Thank you, Virginia. It's wonderful to be with you. Well, I want to start by talking about what exactly is a comptroller and what role do you play within state government? It is my privilege with our office to provide all of the accounting and reporting of Indiana's funds.

We also pay all the state's employees and vendors and distribute the tax revenues collected by the state that belong back to the local units of government. In addition, we administer Indiana's deferred compensation plan and the Indiana transparency portal that puts all of the financial information of Indiana at the fingertips of Hoosiers. Okay, so very, very important, especially important when it comes to, okay, where is that taxpayer money going, making sure folks get paid, all important things. So let's talk a little bit about this topic of ESG. We have a lot of ground to cover today, but it's one. One, that when it comes to state financial officers and what's happening, there's a lot of

concerns about where money is going and how it's being spent. And we're here at this conference talking a lot about ESGs and kind of this new push that really doesn't always use taxpayer money well. Let's be thinking about just kind of defining what exactly is this ESG movement. Where did it come from? So what could not get passed through the legislative process, there have been efforts to get it passed through the markets. Okay. And prioritizing in the world that I live in, pension fund dollars, prioritizing their investment in money markets that are uplifting environmental, social and governance agenda items.

that we've seen really favoring far-left political ideologies over a return on investment. And we see that as a real problem. fiduciary duty is king. And we live by that. Yeah, which is so critical. Well, one of the ways that yourself and a number of other state officials are trying to bring greater accountability is by calling out another comptroller, this one, in New York City and saying, hey, make sure you're staying in your lane when it comes to these

issues of companies and how we're directing them to act. So the situation is that the comptroller in New York City, he told a number of big grocery stores like Costco, Walmart, Kroger, hey, you all need to be carrying the abortion pill drug, make a pristone. Well, yourself and other state treasurers and comptrollers said, whoa, that's actually not within your realm. Talk a little bit about the letter that you have sent to the CEOs of these big stores and how you all are trying to bring some checks and balances. Yes, yes, indeed. So there are many factors that CEOs and boards are going to take into account when they consider a product and its placement in their stores. And so to just listen to a demand

from an elected official certainly does not exude due diligence. And we just wanted to lend our voice of support to them doing their diligence on the placement of any product. And with his argument that it is the fiduciary duty of these retailers to sell the abortion drug because it will increase their sales, which will, he says, you know, of course, increase shareholder value. Well, there is a problem. them with that reasoning because when you take it to its natural conclusion, while there may be

a short-term bump in sales, there will be lifetimes of loss in the sales of diapers, formula, food, school supplies, and on and on and on. So, yeah, just brought that to attention. Yeah, really, really critical. Obviously a very emotional topic for so many people, but one that really is critical. I'm like staying in your lane. Yes. Staying in your lane. All right. Well, let's talk a little bit for a moment. I want to go back to the topic of ESG.

Before we talk about the national debt, we're going to get there in a second. But you have been really speaking out in the state of Indiana about we need to be divesting not only from ESG programs, but also from China. Yes. Why is that such a priority for you? Yes. So we have the good fortune in Indiana to have a legislature that is on top of making sure that we divest from Chinese entities and from ESG-focused funds. And so I have the luxury, as does the board of the Indiana public retirement system and the Indiana Deferred Compensation Plan to look at the legislation and implemented. So in the case of China and divestment, the legislature said that impers has five years to divest from Chinese entities. And we leaned in and got it done in one year. It's so incredibly

important from a national security standpoint. And then with the public retirement plan, we did not have the legislation directed at that plan, but we saw what they said to the pension fund. And we said, you know, we need to reflect the legislature's intent with deferred compensation that they had for the pension funds. And so it was a pretty easy vote that went down to take out the fund that we did identify that had 4% invested in Chinese entities. It is now gone. Wow. That's so strategic and a good model for other states as well. Yes, indeed. And then they also put forth legislation to review our funds as far as if they are ESG-focused funds and the treasurer is to review them

and bring them to our attention and asset managers and their work on that. And so we have a treasurer who is implementing following through on that legislation and just brought before the Imper's Board, BlackRock, and we are now investigating BlackRock, each of us as independent board members and we'll be taking a vote next month

on the plan forward and looking at moving funds away or not. This topic of environmental and social governance, it's interesting to see kind of who the winners and losers are. And China plays a role in that, especially on this environmental side, when you're having companies and you're telling them like, hey, you need to commit to net zero or whatever it might be, Explain if you would, how does China benefit when you have companies that are really pushing

that ESG agenda or does China benefit? Are they the biggest winner at the end of the day? And we're the biggest losers. Yes, I think we have seen a true hypocrisy because while many of these asset managers and the whole ESG movement has been putting intense pressure on the United States toward renewable energy and to move away from reliable energy, i.e. coal, oil, and gas. They are making significant investments in fossil fuels in China, India, Brazil. And they do not implement the clean energy technology that we do with fossil fuels.

So you have to wonder, what is behind that? it does not make logical sense. Certainly not to our benefit. Yeah, yeah. And we need reliable energy with the increase in demand for energy that is leading toward more brownouts, blackouts, increase in cost. It's absolutely essential to have reliable energy. It ties so directly in with the state of the economy.

Yes. When you have that production at home creates jobs. obviously allows us to be less reliant on China. So let's talk a little bit about the state of the economy, where we are in our national debt. We were talking a little bit before we hit record that there's so much, which is true, there's so much accountability that needs to really stop at the foot of the federal government as far as the national debt and getting that down. But there's a role that the states play as well, is there not?

Yes. So we've asked ourselves, as state financial officers, what can we do? And there is so much that we are now coming together to do. We believe that we have an absolute duty to speak to the national debt crisis as well as the definite deficit spending. So in our states, right, we're working so hard to put ourselves in a solid financial position. And I can say on behalf of Indiana, it is good to be a Hoosier. We have low debt, low pension fund liability, healthy cash reserves, a balance by annual budget. And one of just, 14 states to have earned a AAA credit rating from all three independent credit

agencies. So, but we as a state are vulnerable to the fiscal position of our country that is rapidly dissolving. And so as state financial officers representing our states, we are coming together with a united voice to hold the federal government accountable to get their fiscal house in order and to support Congress in the necessary work that they must do. And it will be difficult. But we are rising up in support for them to come up with a financial plan to restore America's financial solvency. And we're pushing for that plan to be implemented by 2026, which is the year in which we will celebrate our country's 250th anniversary of the Declaration of Independence. And don't you know that our continued independence depends upon us being

financially solvent as a country. So critical. Well, it's an issue that unfortunately, both Republicans and Democrats have been weak on. There's been, you can't just blame one side or the other for this because you've seen time and time again, it's not popular to say, we're going to eliminate this program or we're going to cut back here in order to bring our debt down. But at the end of the day, those sacrifices have to be made in order to bring about that balance and ensure that we can have another 250 years as a free nation. So what would be some of, and I don't know, you know, when you talk about working with Congress, are there certain areas, aspects that you all are recommending, like, hey, even though it might

be painful in this area or this area, we need to be strategic about cutting back spending here or here. Yes. So that's absolutely critical to cut spending. and to live within our means. In Indiana, we have a balanced budget amendment. It passed in 2018, and it has served us exceedingly well. But we are literally plundering the futures of our children and our children's children

and beyond with this massive debt load that, you know, it took 205 years for our country to accumulate its first trillion dollars worth of debt. And now we are increasing by that amount every handful of money. months. It's hard to wrap your mind around. It is. It is so large and we cannot wait any longer for Congress and our president to address this crisis. We feel like it's also our job to help raise awareness of the severity of the problem to the constituents that we represent in our states so that this issue can be addressed right alongside the border crisis. as far as the amount of attention that's being given to it and mean into solving the problem.

Yeah. Well, I think with inflation the way it is, I think Americans are all glad to hear that. Let's talk a little bit about the future. And what are your sights set on as you think about the coming years in Indiana, what you want to see happen in your state? Indiana continues to be strong. Okay, let me just tell you this story, right? Please do. So 20 to 25 years ago, Indiana had a high amount of debt. And the person in my role would have to go around to the local units of government and say, I'm so sorry, we're going to have to delay your payment.

If you, a little cash draught, go to your local bank and take out a loan, and we'll get the money to you when we can. Indiana State comptroller, Elise Mishallah. Thank you so much for being built. Thank you, Virginia. And with that, that's going to do it for today's episode. Thanks for joining us here on The Daily Signal podcast. Don't forget to hit subscribe so you never miss out on brand new shows. And we will see you right back here around 5 p.m. for our top news edition when we bring you the top news of the day. These are the headlines that you don't want to miss to stay informed on what's happening in our world. We'll see you back here at 5. The Daily Signal podcast is made possible because of listeners like you. Executive producers are Rob Louis and Katrina Trinko. Hosts are Virginia.

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