The eco-friendly company this Arizona congressional candidate co-founded is under federal scrutiny
Federal investigators are probing whether the eco-friendly financial firm co-founded by congressional candidate Andrei Cherny is as green as it claims.
The company, Aspiration, markets itself as a climate-conscious alternative to mainstream finance. At the core of its business model are carbon offsets, or efforts to counteract planet-warming carbon emissions by funding initiatives such as planting trees.
Its services include a “reforest while you shop” debit card, which gives customers the option to round up their purchases to fund tree-planting, and an investment fund oriented around environmental and social responsibility. It also helps equip businesses with carbon offset schemes such as buying carbon credits.
Cherny founded the company in 2013 along with entrepreneur Joseph Sanberg. Boosted by celebrity endorsements of the likes of actors Robert Downey Jr. and Leonardo DiCaprio, by 2021 it had struck a deal that would leave it worth more than $2 billion. Cherny left his post as CEO in 2022 when the company hit choppier waters and that deal was delayed.
The carbon offset industry has come under scrutiny by environmental experts and regulators amid revelations that many projects have had less of an impact than they claim.
Aspiration has not been immune. A 2021 ProPublica investigation questioned several of its environmental bona fides, including the company’s claim that it had planted more than 35 million trees. In fact, that figure referred to the “cumulative total of to-be planted trees.” Cherny told the outlet that only 12 million of those trees were actually in the ground, adding that it can take up to 18 months for its nonprofit partners to plant a given tree.
Now, the Justice Department and the Commodity Futures Trading Commission are investigating whether Aspiration “misled customers about the quality of carbon offsets it was selling,” Bloomberg reported Thursday. Authorities are “reviewing the actions” of Cherny and Sanberg, according to Bloomberg.
Media contacts for both agencies did not respond to requests for confirmation or additional specifics about the investigation.
The CFTC recently escalated its efforts to crack down on the fast-growing carbon credit industry, including soliciting tips from whistleblowers and proposing guidelines for some parts of the market.
Cherny defended his work with Aspiration in a statement to The Arizona Republic.
“I have spent more than 25 years working to combat the climate crisis and am proud of the work I did to promote cutting-edge solutions at Aspiration,” Cherny said. “The carbon removal credit industry is an emerging industry and deserves to be regulated and scrutinized to ensure it is as effective as possible.”
“I have no knowledge whatsoever of any wrongdoing at Aspiration and will fully cooperate with this inquiry.”
Cherny is a leading fundraiser in the race for Arizona’s 1st Congressional District, which stretches across northeastern Maricopa County. He led the packed Democratic primary field in total fundraising as of September 2023, rivaling the Republican incumbent, Rep. David Schweikert, R-Ariz.
Cherny frequently raises the issue of climate change while campaigning.
“David Schweikert may call the climate crisis ‘folklore,’ but I’ve spent my career taking on Big Oil and climate crisis and that’s what I’ll do in Congress,” Cherny wrote in an August social media post, referencing a past remark by Schweikert.
Schweikert has in the past denied the scientific consensus that human activity, particularly the burning of fossil fuels, is causing climate change.
In a video launching his candidacy, Cherny echoed Aspiration’s recent claim that the company has planted more than 100 million trees. The company has claimed that those trees are all in the ground as of February 2023, with 40 million more funded but not yet planted.
Aside from his work with Aspiration, Cherny worked at age 21 as a speechwriter for President Bill Clinton, served in the U.S. Navy Reserves and was the chair of the Arizona Democratic Party from 2011 to 2012.
Other candidates in the packed Democratic primary field include Marlene Galán-Woods, a former journalist and the widow of former Arizona Attorney General Grant Woods; Conor O'Callaghan, who works in finance; Andrew Horne, an orthodontist; Amish Shah, a doctor and a state representative; and Kurt Kroemer, a former nonprofit executive.
Laura Gersony covers national politics for the Arizona Republic. You can reach her at [email protected] or 480-372-0389.
This article originally appeared on Arizona Republic: Andrei Cherny's former company under inquiry over carbon offset claims