JEFFERSON CITY 鈥 Secretary of State Jay Ashcroft, who is running for governor, is using taxpayer funds to pay a campaign donor to represent him in a high-profile lawsuit.
Instead of using the Missouri attorney general鈥檚 office to fight a challenge to new investment rules being pushed by Ashcroft, the Republican hired the politically connected Kansas City law firm of Graves Garrett to represent his office.
Among a trio of Graves Garrett lawyers on the case is Edward Greim, who contributed the maximum amount of $2,825 to Ashcroft鈥檚 gubernatorial campaign in June.
The Securities Industry and Financial Markets Association sued Ashcroft in August arguing that a new state rule designed to limit the impact of environmental, social and governance factors in investment decisions conflicts with federal securities laws.
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The organization said the rule fails to acknowledge that federal law already requires financial advisers to act in the best interest of their clients when providing personalized investment advice.
The 43-page suit alleges that the rules violate the constitutional right to free speech by requiring brokers to stick to a script outlined in the new rule.
鈥淭he government cannot compel professionals to make policy statements on political issues,鈥 the lawsuit says.
Ashcroft issued the rules 鈥 the first in the nation 鈥 after a similar 鈥渁nti-woke鈥 died in the Legislature this spring.
Ashcroft, who is facing Lt. Gov. Mike Kehoe and Sen. Bill Eigel in the August 2024 GOP primary, is using the lawsuit to raise money for his gubernatorial campaign.
鈥淚 implemented new rules requiring Wall Street bankers and money managers to notify their customers when they choose to invest their retirement savings in woke ESG investments, rather than investments that generate the best return,鈥 Ashcroft said in a campaign memo to supporters earlier this month.
Ashcroft鈥檚 office spokesman JoDonn Chaney referred questions about the fundraising scheme to the secretary鈥檚 campaign team.
Campaign spokesman Jason Cabel Roe said in an email, 鈥淭his case requires specialized understanding of securities law. After conferring with several law firms, we chose Graves Garrett, because they have attorneys with the necessary technical knowledge and experience with the Western District of Missouri.鈥
In hiring Graves Garrett, Ashcroft鈥檚 office notified Attorney General Andrew Bailey鈥檚 office in an Aug. 16 letter, saying the firm has the expertise in the securities industry and will be beneficial to the defense of the rule.
Bailey鈥檚 office signed off on the hire but denied Ashcroft鈥檚 request to pay for the outside lawyers with a fund overseen by the attorney general.
Bailey chief of staff James Atkins said in an Aug. 24 letter obtained by the Post-Dispatch that hiring Graves Garrett is not eligible for that funding source.
鈥淩etaining independent counsel removes AGO oversight and thus negates coverage,鈥 Atkins wrote.
Greim and the law firm are politically active. Partner Todd Graves, a former head of the Missouri Republican Party, was named to the University of Missouri board of trustees in 2021 and Greim was mentioned as a possible pick for attorney general when Eric Schmitt vacated the post to become U.S. senator.
Greim also has represented witnesses involved in the U.S. House investigation into the Jan. 6 insurrection at the U.S. Capitol.
Greim also represented the Office of the Governor in 2018 when former Gov. Eric Greitens was under investigation for possible impeachment.
The law firm has done occasional work for state clients. In 2021, for example, taxpayers paid $432,000 to the firm for legal representation.
Ashcroft鈥檚 campaign committee paid Graves Garrett $1,190 in 2022 for legal consultations.