ELI STEELE: California forces companies to mine the past for slavery's sins

California's AB 2599, which takes effect January 1, 2025, requires publicly traded companies and state contractors with over $1 million in annual revenue to disclose any connection to slavery—either in their own history or in that of predecessor companies acquired through mergers. The law applies retroactively, meaning companies must excavate records going back to 1865. State Comptroller Lorie Rice will maintain a public database. The measure passed in 2023 with bipartisan support, including votes from Republican legislators, framed as historical transparency rather than reparations policy.

The actual mechanism creates real friction for companies: those unable to document their genealogy face presumed non-compliance, while those that find historical ties become permanent entries in California's public record. For institutional investors screening investments through environmental, social, and governance frameworks—a $35 trillion market segment—this creates pressure to divest or demand remediation. Banks like Wells Fargo, which acquired Wachovia, face particular scrutiny given Wachovia's documented slave-holding connections. The law doesn't mandate payouts or specific corrective actions; it mandates confession as the remedy.

The critique from Steele and other skeptics cuts deeper than procedural complaint: they argue California is outsourcing moral reckoning to corporate disclosure while its own schools remain dysfunctional. California spends $23,000 per student annually yet ranks 43rd nationally in math and reading proficiency. The implicit trade—corporate self-flagellation in exchange for political absolution—leaves substantive inequities untouched. The law becomes performance, not policy. This tracks historically with the corporate "diversity spending" boom of 2020-22, which generated $50+ billion in consulting fees while systemic metrics on hiring, promotion, and compensation barely budged.

The conservative reading here isn't opposition to historical accuracy—it's opposition to guilt as commodity. AB 2599 creates a market where corporations can purchase moral status through disclosure compliance and diversity consulting contracts, while actual educational and economic inequality persists unmeasured. It's guilt without consequences, confession without restitution, history without reform. California lawmakers get credit for confronting "systemic racism" without confronting the systemic failure of schools that serve predominantly Black and Latino students. Companies get their names in a database and a roadmap for hiring consultants.

Watch for the Comptroller's first report in 2025, due within six months of the law's implementation. That database will clarify which companies face disclosure requirements and how many claim complete historical innocence. Simultaneously, watch for lawsuits—companies have already indicated challenges on grounds of vague compliance standards and First Amendment concerns. More pragmatically, track whether California corporate tax revenue shifts as companies relocate headquarters or whether major contractors actually exit state contracts, which would expose whether the law functions as actual economic pressure or symbolic theater.