Citi can’t issue bonds in Texas because it “discriminates against” guns, State AG says
Citigroup Inc. has a policy under which Texas Attorney General Ken Paxton’s office “discriminates” against the firearms industry, a decision that appears to bar the company’s ability to underwrite most of the state’s municipal bonds.
The ruling shows the New York-based bank violated a Republican-backed state law banning most government contracts with companies engaged in anti-gun business practices.
The decision means Citigroup’s standing letter, a document that had previously allowed the bank to underwrite debt on one of the country’s largest public bond markets, was rejected, according to a Jan. 18 letter distributed to lawyers and they viewed Bloomberg.
“Citigroup has been found to have a policy that discriminates against any arms company or arms trade association,” Leslie Brock, assistant attorney general for the Department of Public Finance, wrote in the letter.
“Therefore, until further notice, we will not approve any public securities issued on or after today in which Citigroup is acquiring or assuming the public safety or in which Citigroup is otherwise a party to a covered public safety contract,” the letter reads .
Paxton’s office, which must approve most state and local debt sales in Texas before the transactions can close, did not respond to a request for comment.
The decision ends months of debate over whether Citi broke the law. The bank has maintained for more than a year that it is not breaking the law and has successfully managed several transactions, including a $1 billion deal for Dallas-Fort Worth Airport. The National Shooting Sports Foundation, a trade group that spearheaded the legislation, has questioned the review.
“We are disappointed with the decision and will continue to work with the Texas AG office to evaluate our options,” said Mark Costiglio, a spokesman for Citigroup, in an emailed statement. “Citi has funded public works in Texas for more than 150 years and we currently have more than 8,500 employees who call Texas their home. As we have said before, Citi does not discriminate against the firearms sector and believes we comply with Texas law.”
In 2018, Citigroup announced policies that imposed restrictions on the firearms industry following a mass shooting at a Parkland, Florida high school. Citigroup said it would ban retailers who are customers of the bank from offering bump stocks — devices that allow semi-automatic rifles to fire even faster — or selling guns to people who haven’t passed a background check or are younger than 21. Exceptions are included , including an age restriction of under 21 if a person has military training.
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