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A New York University School of Law program funded by billionaire Michael Bloomberg is placing lawyers in the offices of Democratic state attorneys general and paying them to prosecute energy companies and challenge Trump administration policies on energy and the environment.

Nine states and Washington, D.C., including New York, Illinois and Pennsylvania, are participating in the multimillion-dollar program funded by the media magnate and ex-New York City mayor, who re-registered as a Democrat this week amid expectations of a run for president in 2020.

The 14 current fellows in the program report to the attorneys general, but they are paid by NYU’s Bloomberg-funded State Energy & Environmental Impact Center. State AG offices hire these trained lawyers – not students but seasoned professionals with years of experience – as special assistant attorneys general. Under terms of the arrangement, the fellows work solely to advance progressive environmental policy at a time when Democratic state attorneys general have investigated and sued ExxonMobil and other energy companies over alleged damages due to climate change.

Although many government agencies have employees funded by outside sources, critics say using special interest money for targeted government action is inappropriate. Christopher Horner, a senior fellow at the Competitive Enterprise Institute, who wrote a report on the NYU center, said the fellowships come with specific strings attached. “[AG] offices must agree to use prosecutors to ‘advance progressive clean energy, climate change, and environmental legal positions,’” Horner said.

David J. Hayes, the center’s executive director, did not respond to multiple requests for comment.

Amy Spitalnick, communications director and policy adviser to acting New York Attorney General Barbara Underwood, vigorously defended the program. “The NYU center,” she said, “has no role in supervising the fellows.”

Spitalnick also seemed to indicate the partisanship in play when she cited a 2011 report  that found former EPA Administrator Scott Pruitt may have relied heavily on the advice of the oil and gas industry when he was Oklahoma’s attorney general.

“Climate deniers continue to find new and creative ways to distract from reality,” she said.

The center was launched in mid-August 2017 with a reported grant of nearly $6 million from Bloomberg Philanthropies, the charitable entity controlled by the billionaire. It is billed as a non-partisan project to help “state attorneys general fight against regulatory rollbacks and advance clean energy, climate change [responses], and environmental values and protections.” 

Personally and through his political groups, Bloomberg has also donated millions of dollars to Democratic attorneys general campaigns in this midterm election cycle. For Democratic campaigns in general, he has announced plans to spend $80 million this year.

Some of the fellows from the NYU program developed their legal acumen at progressive advocacy organizations such as the Sierra Club and the National Resources Defense Council. Others served under Bloomberg during his mayoral tenure in New York – for example, Sarah Kogel-Smucker, now an NYU fellow in the District of Columbia government.

The fellows have played a role in filing at least 130 regulatory, legal and other challenges to federal environmental policies since 2017, according to a review of filings.

David J. Hayes

The full extent of the attorneys’ participation in many cases is veiled by attorney-client confidentiality. In an email last year to Democratic-held offices, Hayes wrote that “we are engaged with ethics experts and individuals in some of your offices to ensure confidentiality” of the program’s work. The email was provided to RealClearInvestigations by the office of Iowa Attorney General Tom Miller, a Democrat.

The center’s staff has made virtually no effort to engage Republican offices. Hayes, a former deputy secretary of the interior in the Obama and Clinton administrations, has coordinated campaign fundraisers and advised top officials for Hillary Clinton’s 2016 presidential campaign on energy and environmental policy. Last year he emailed an initial invitation to apply for the program to chiefs of staff of Democratic attorneys general. (There are 22 Democratic state attorneys general, 27 Republican and one independent.)

Lynn Hicks, a spokesman for Miller, declined to comment on why he decided against applying to NYU program. Hicks said the office accepts some third-party funding but not from groups seeking to advance a particular policy agenda.

“We have some third-party funding already,” he said. “For example, some of our internships are funded through a fellowship underwritten by the American Bar Association. To be clear, a minority of our office’s total funding is directly appropriated by the legislature. Other funding comes from grants, settlements and civil penalties and various funds, such as the Consumer Education and Litigation Fund, but those aren’t really ‘third parties.’”

The fate of the program in Virginia is uncertain. Hayes announced in a December 2017 press release that the office of Attorney General Mark Herring was awarded a grant and “will soon hire” a Bloomberg-funded fellow. But that hasn’t happened yet.

Howard Wolfson, a close Bloomberg adviser and Bloomberg Philanthropies executive, did not respond to multiple requests for comment on the question of whether the organization has donated any more than the initial pledge of nearly $6 million to the NYU center. He also declined to address Bloomberg’s campaign donations to Democratic attorneys general.

Bloomberg donated more than $2 million to Herring’s 2017 re-election campaign via two political groups Bloomberg controls and through a personal contribution. Through the philanthropist’s advocacy group Everytown for Gun Safety Action Fund, Bloomberg has donated $150,000 to the Democratic Attorneys General Association this cycle—$50,000 in July 2017 and another $100,000 in January 2018. Any additional donations to DAGA this cycle after June 30, the end of the second quarter, won’t be publicly disclosed by the IRS until Oct. 15. Everytown has also announced plans to spend $3.5 million this year to support Democratic attorney general candidate Aaron Ford in Nevada and the party’s nominee for governor, Steve Sisolak.

Bloomberg, 76, has a net worth estimated at around $50 billion, rooted in his founding the financial information service Bloomberg LP.

Races for attorney general represent a key battleground as Democrats and Republicans vie for control of offices that have the authority to challenge federal laws and regulations as well as pursue policy priorities through investigation of and litigation against disfavored industries.

Political analysts consider 10 AG races competitive—Democrats facing incumbent Republicans in Arizona, Georgia and Wisconsin; open seats held by Republicans in Colorado, Nevada, Michigan, Ohio and Florida; and open seats held by Democrats in Minnesota and Illinois.

Depending on which party controls Congress and the White House, attorneys general have become increasingly aggressive in forming coalitions to challenge federal laws and regulations. Multistate lawsuits filed by attorneys general against the federal government doubled after 2014, as Republicans resisted implementation of the Affordable Care Act and other Democratic policies. During President Trump’s first year in office, the number of multistate lawsuits against the federal government jumped to 36  from 13 the year before, according to Paul Nolette, an associate professor of political science at Marquette University.

In September, four special assistant attorneys general from the NYU program signed on to a lawsuit from eight AGs against the Interior Department, the U.S. Fish & Wildlife Service and Interior’s acting solicitor, Daniel Jorjani, over Trump administration regulatory changes regarding the Migratory Bird Treaty Act.

Anti-fracking protest, Albany, N.Y.

In May, two special assistant attorneys general from the program joined 18 AGs filing a lawsuit against the EPA for beginning the process of modifying vehicle emissions standards.

The primary focus of the fellowship program has been pushing back against the Trump administration, specifically its moves to replace Obama-era rules as well as its efforts to expand natural resources extraction (drilling, fracking, etc.). For instance, program attorney Megan Herzog signed comments with Massachusetts Attorney General Maura Healey "strongly opposing President Trump and Department of Interior Secretary Ryan Zinke’s ‘ill-advised’” proposal to allow offshore oil and gas drilling along the Massachusetts coast as part of a national program.

Aside from New York, Illinois, Pennsylvania, Massachusetts and Virginia, the other states participating in the NYU program are Oregon, Maryland, Washington state and New Mexico.

Some Republican offices challenged the authority of attorneys general to accept the funding and the attached obligation to report activities back to the Bloomberg center. Rebecca Ballweg, a spokeswoman for Wisconsin Attorney General Brad Schimel, said her office determined that the program would not be legal.

“This scenario would be a conflict of interest under the Code of Ethics for state employees, which prohibits a state employee from using his or her position for financial gain or for the private benefit of an organization with which the employee is associated,” she said, citing the Wisconsin ethics law for state employees.

“The public’s expectation is that a state’s chief law enforcement official acts in an unbiased and objective manner,” said Harold Kim, the executive vice president of the U.S. Chamber Institute for Legal Reform. “Regardless of the underlying issue, when political interest groups participate in embedding paid staff in a state attorney general’s office, that credibility is called into question.”

Horner of the Competitive Enterprise Institute suggested the NYU center is less likely to spur reform than an ideological arms race.

“It seems the only way to wake our usual constitutional watchdogs to the abuse is for conservative AGs to accept Federalist Society, National Rifle Association and National Right-to-Life chaired prosecutor positions to investigate those groups’ political opponents and advance their agendas,” he said. 

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