Recently, Texas Republican Attorney General Ken Paxton released advisory and guidance on the enforcement of laws passed by the state regarding how government entities grant contracts to private companies. The statement from Paxton pertains to companies that discriminate against firearm-related organizations, boycott energy companies, or boycott Israel.
Texas passed a law that no government entity within the Lone Star State can issue a contract valued at $100,000 or more to companies that meet this criteria. Paxton’s announcement reaffirms this law, reminding business owners of the consequences of their leftist political endeavors. According to the advisory, companies in contractual obligations with governmental entities must affirm in writing that they do not and will not engage in the specified practices at any point in the future.
“The Office of the Attorney General will continue to vigorously enforce our laws that prevent taxpayer funds from going to companies whose ‘ESG’ policies harm Texans or key Texas industries,” Paxton told the Daily Caller. “Companies who discriminate against firearms businesses and organizations, the oil and gas industry, or the nation of Israel will not enjoy the opportunity and privilege of winning public contracts in Texas,” he continued.
Texas Governor Greg Abbott signed these rules into law after the Texas legislature passed the regulatory measures. The law covers virtually any type of contract a government entity could engage in with a private business, including listing various expected financial services but also exhaustively specifying “any other professional services.”
“Texas law prohibits state agencies and political subdivisions (“Governmental Entities”)from contracting with businesses that boycott energy companies, discriminate against firearm entities or associations, or boycott Israel. As Attorney General, my job is to uphold state law and ensure that Texas remains a friendly state for companies to do business—including those that produce the energy we depend on and the firearms that secure our safety and freedom. And given the recent brutal Hamas terrorist attacks against Israel, it is more important than ever to enforce public policy supportive of one of America’s closest allies and a beacon of freedom in the Middle East,” Paxton’s notice states.
A key portion of Paxton’s advisory addresses municipal finance and the implications of contracting with particular banks. Municipal bond issuance is a critical activity for governmental entities within a state. However, this requires the entities to work with a bank to underwrite the process. Paxton’s advisory lists large banks, such as Blackrock, HSBC, and Credit Suisse, as violating Texas’ regulations.
“Moreover, governmental entities are not free to do business with firearm entity discriminators, energy company boycotters, or Israel boycotters merely because neither the Comptroller of Public Accounts nor the Attorney General has publicly designated them as such.Although Governmental Entities may not always be positioned to fully evaluate a company’s policies and practices, they may not turn a blind eye to publicly known conduct. When considering whether a company is an energy company boycotter, for instance, particular notice should be taken of whether the company is a member of the Net Zero Alliance or a signatory of any other similar entity that espouses a commitment to the furtherance of so-called Environmental, Social andGovernance policies.” the advisory concludes.
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