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But the attorney general’s office says it has no record of complaint

A University of Chicago group that wants the university to divest from fossil fuels claims to have filed a legal complaint with the Illinois Attorney General’s Office, alleging the school has violated its legal obligation by investing its endowment in oil and gas companies.

The complaint occurred in conjunction with similar student groups from Pennsylvania State University, Pomona College, Tufts University, the University of Pennsylvania, and Washington University in St. Louis, who filed similar legal complaints in their respective states.

However, the Illinois Attorney General’s Office said it is “not aware” of having received the legal complaint, even though it’s been a full three months since the document was reportedly submitted by Divest UChicago.

“We are not aware of our office having received this complaint; however, we will review it if and when we do,” April McLaren, deputy press secretary for the attorney general’s office, told The College Fix via email.

It appears the office has still not received the complaint – McLaren did not respond to a Jan. 28 follow-up request for a status update.

The Fix asked Sanya Bhartiya, the contact listed by Divest UChicago, if the group had officially filed the complaint. “We have a case number and are working with the Illinois attorney general’s office to go forward with our case.”

The complaint alleges the university violated its “fiduciary duty to invest with consideration for the University’s charitable purposes.”

“In the midst of the climate crisis, powerful institutions must take responsibility for their contributions to global warming,” the complaint stated. “As concerned students, faculty, and civic groups, we ask that you investigate this conduct and use your enforcement powers to bring the Board’s investment practices into compliance with its fiduciary obligations.”

After being informed that Divest UChicago told The Fix that they were working with someone in the AG’s office and had a case number, McLaren told The Fix that the office still did not find a record of the complaint being filed.

“Do you by chance know what division within the agency they submitted it to? We’ve checked with multiple divisions without luck, but if they have specific information on who they submitted it to or who even gave them a case number, that might be helpful,“ McLaren told The Fix on Jan. 9.

On Jan. 9 and Jan. 21, The Fix inquired further with Divest UChicago, asking if it could provide the case number or identify the person the group had been in contact with at the Attorney General’s Office.

However, on both occasions the group refused to disclose the alleged case number or the officer they were in contact with, telling The Fix, “We are confident that all the relevant information for your article is publicly available.”

Financial experts question divestment claims

Several financial experts criticized the claims of the activists.

New York University finance Professor Aswath Damodaran, who wrote a popular textbook on securities analysis, said divestment would not have a substantial effect and appears to just be “virtue signaling.”

“The only thing I can say is that virtue signaling and economic ignorance create a potent mix, and I guess UChicago students are no exception,” Damodaran said via email.

He shared a 2023 article he wrote about “Environmental, Social, and Governance standards,” where he stated, “alternative energy companies have a cumulated enterprise value of about $600 billion as of September 2023, a fraction of the $8.5 trillion of cumulated enterprise value at fossil fuel companies.”

Another expert who studies pensions and writes regularly about investments, agreed.

Scott Shepard, director of the Free Enterprise Project at The National Center for Public Policy Research, told The Fix that the claims of the complaint were factually incorrect.

One of the claims in the complaint is that the Board of Trustees is breaking its legal duty to invest the endowment with “prudence” by investing in fossil fuels.

“Fossil fuel stocks have performed significantly worse than market averages over the last ten years. The oil industry has suffered from a decade of lost value, and recently elevated commodity prices for oil and gas have not made up for this long-term poor performance,” Divest UChicago argued in the complaint.

Shepard told The Fix in an email that this argument was incorrect: “Fossil fuels are reliable and economical; alternatives are not, even without backing out enormous and unsustainable government subsidies.”

Shepard has previously published papers about pensions and public finance.

“Reliance on and investment in reliable and economical energy sources, and broad diversification of holdings more generally are winning investment strategies.”

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