Wells Fargo, RBC bankers meet Texas AG staff

NEW YORK: The Texas attorney general’s or AG staff have met with municipal finance executives from Wells Fargo & Co and RBC Capital Markets as Ken Paxton’s probe into whether the Wall Street banks “boycott” the fossil fuels industry drags on.

Bankers from RBC, including Bob Spangler, the New York-based head of municipal finance for the firm, met with Paxton’s staff at the attorney general’s office in Austin, according to emails obtained by Bloomberg News through a public records request.

Earlier in April, Wells Fargo also met with members of the attorney general’s office, other emails between the bank’s employees and Paxton’s staff show.

Attendees included Scott Fontenot, senior vice-president for state and local government relations at the bank, and Blaine Brunson, a Texas public finance banker. They were joined by the bank’s lawyers.

Spokespeople for RBC and Wells Fargo declined to comment. The Texas attorney general’s office didn’t respond to email and phone calls requesting comment.

The meetings cast a rare light on the investigation, which has become a six-month long headache for municipal bond bankers, who help facilitate debt sales for cities and states to raise money to build infrastructure.

Since October, the Texas AG’s office has been examining the policies of banks that joined Net-Zero Banking Alliance, a group of companies that have committed to cut their greenhouse gas emissions.

The probe upended the Texas muni underwriting market after Paxton’s letter to bond lawyers last year, but the investigation’s progress has had little transparency, and it isn’t clear when it will conclude.

Paxton’s office is working to determine whether any of the banks engage in a “boycott” of the fossil fuels industry as part of an effort to enforce a 2021 GOP law targeting banks’ climate change commitments.

Both RBC and Wells Fargo were removed from transactions in the weeks following Paxton’s Oct 17 announcement.

Both banks have repeatedly maintained that they don’t boycott the energy industry.

Paxton, a Republican, could ultimately bar more banks from the state’s roughly US$50bil-a-year muni market. His office already blacklisted Citigroup from working on local deals there in 2023 and Barclays in early 2024.

It’s unclear if the other banks that Paxton is looking into have held meetings with his office. — Bloomberg