As a debate flared up earlier this year over whether Colorado’s public pension system should divest from climate-warming fossil fuels, the system’s board was confidentially advised on divestment policies by its legal counsel — which also happens to be a major law and lobbying firm for the oil and gas industry.
At a September board meeting in Colorado Springs, the trustees of the state’s Public Employees Retirement Association (PERA) held a “Divestment Education Session,” which included a closed-door presentation by two partners at Brownstein Hyatt Farber Schreck, the Denver-based lobbying giant whose clients include a long list of major fossil fuel corporations. Brownstein has served as fiduciary counsel to PERA’s board of trustees since 2011.
The presentation followed a petition circulated in August by PERA members and the environmental activist group 350 Colorado that asked the board of trustees to outline the steps it has taken to guard against climate-related financial risk and urged the pension system — which manages the retirement savings of over 500,000 current and former public employees — to sell off its more than $780 million in fossil fuel-related assets.
“We believe divestment from fossil fuels is not only morally right — but also in line with fiduciary responsibility,” the petition reads. “We call on PERA to divest from fossil fuels, which will protect our pensions and show bold leadership in investing in our future.”
The launch of the Fossil Free PERA campaign prompted immediate pushback from the oil and gas industry, which touted an analysis claiming that divestment would cost PERA tens of millions of dollars annually in lost returns. An op-ed by the study’s co-author on Colorado Politics warned that divestment would only “cause further financial injury to the pensioners who depend on the fund for payments and to the taxpayers who help support it.”
A month later, PERA trustees were briefed on divestment by Brownstein attorneys Thomas Krysa and Carrie Johnson during a planning session at the Cheyenne Mountain Resort in Colorado Springs, according to meeting minutes. Their presentation was made during a closed executive session, which means that the information presented is shielded from public view. (Brownstein Hyatt Farber Schreck declined to comment for this story.)
PERA spokesman Luc Hatlestad says that the Divestment Education Session was held as part of a periodic review of the board of trustees’ divestment policy, which it initiated in June. He declined to comment on concerns about Brownstein’s possible conflict of interest regarding fossil fuel divestment.
“It is not our policy to comment on the client rosters of our consultants or vendors,” he says.
Federal lobbying records show that Brownstein has lobbied on behalf of at least a dozen oil and gas firms over the past decade, in addition to fossil fuel trade groups like the American Coalition for Clean Coal Electricity and the New Mexico Oil & Gas Association.
Such disclosures do not include the extensive legal representation and other services the firm provides to fossil fuel companies in Colorado and beyond. Alongside other prominent energy law firms, Brownstein is a member of the Colorado Oil and Gas Association (COGA) and frequently represents the industry in regulatory and court proceedings in the state, including in several COGA lawsuits against Colorado cities and towns that have attempted to restrict or regulate drilling within their municipal borders. Lawyers for the firm also assisted fossil fuel interests in placing Amendment 74, the industry’s high-stakes insurance policy against Proposition 112, on Colorado’s 2018 ballot.
Activists say that Brownstein’s extensive involvement in the oil and gas sector compromises its ability to offer impartial advice on fossil fuel divestment to PERA’s board.
“Will Brownstein Hyatt Farber Schreck offer unbiased fiduciary counsel to PERA? I think not,” says Deborah McNamara, campaign coordinator for 350 Colorado.
“PERA should certainly do right by their members and hear from other financial experts on the fiduciary and legal case for fossil fuel divestment, and be sure to hear from experts who don't have a financial stake in the fossil fuel industry,” she adds.
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As scientists deliver increasingly dire warnings about the urgent need to zero out carbon emissions, and as warming-intensified disasters like California’s Camp Fire become more frequent and devastating, the divestment movement is gaining steam around the world. Earlier this year, New York City announced that its public pension system — one of the largest in the country — plans to divest from fossil fuel companies by 2022.
McNamara says that the Fossil Free PERA campaign is in discussions with unions and other stakeholders about its next steps, which could include pursuing divestment legislation through the newly Democratic-controlled state legislature.
Such an approach may be necessary, given PERA’s past opposition to divestment and its fiduciary counsel.
Shortly after 350 Colorado first circulated its petition in August, the fossil fuel industry held its annual Rocky Mountain Oil & Gas Awards at a ceremony in Denver. The winner of “Law Firm of the Year” was Brownstein Hyatt Farber Schreck.