The Financial Accountability and Corporate Transparency Coalition (FACT Coalition) sent a letter to senators Monday urging them to reject a provocative Congressional Review Act resolution to nullify the bipartisan Cardin-Lugar Amendment (Section 1504) to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
The full letter can be read below or downloaded here.
January 30, 2017
United States Senate
Washington, DC 20510
RE: Oppose Efforts to Overturn the Bipartisan Cardin-Lugar Anti-Corruption Measure (Dodd-Frank Sec. 1504)
We are writing on behalf of the Financial Accountability and Corporate Transparency Coalition (FACT Coalition) to urge you to oppose any effort to overturn the implementing rules of the bipartisan Cardin-Lugar anti-corruption provisions (Section 1504) of the Wall Street Reform and Consumer Protection Act of 2010. The FACT Coalition is a non-partisan alliance of more than 100 state, national, and international organizations that promotes policies to combat the harmful impacts of corrupt financial practices.
Sponsored by former Sen. Richard Lugar (R-IN) and Sen. Ben Cardin (D-MD), the bipartisan measure combats corruption and protects national security by requiring oil, gas, or mining companies that file an annual report with the Securities and Exchange Commission to disclose their country and project-level payments to host governments each year.
It’s inaccurate to suggest that the implementing rules promulgated by the SEC in July put U.S. companies at a competitive disadvantage. 30 other countries—including Norway, Canada, and all 28 members of the European Union—have instituted the same disclosure requirements on extractive companies. This means that over 90 percent of internationally operating companies in the extractives sector are covered by these transparency measures. And, there are already reports coming out of these countries. We have seen reports from BP, Shell, and BHP Billiton—among other major multinational oil and gas companies. Despite this, no European company has suffered any disadvantage as a result of disclosures it has made.
Moreover, it’s estimated that Cardin-Lugar would result in negligible compliance costs for American businesses, as was noted by one company, Tullow Oil, which has been reporting under requirements equivalent to Cardin-Lugar for several years. The rule requires disclosure of payments that companies track in the normal course of doing business.
Additionally, the SEC issued an equivalency order alongside its implementing rule for the Cardin-Lugar provision determining that companies reporting under EU rules, Canadian rules, or the U.S. Extractives Industry Transparency Initiative (EITI) standard would be deemed substantially similar to the SEC rule. As such, companies reporting under the above equivalent rules may submit those existing required reports to fulfill the SEC disclosure requirements, and would not add any new burdens or compliance costs for those companies.
While we take for granted the transparency of federal budgets in the United States, this is simply not the case in many developing nations. In a number of countries, government revenues and budgets aren’t published anywhere—which encourages public officials to steal from their citizens and extort private companies for bribes and kickbacks.
The problem is especially acute in a number of countries in the Middle East and Africa, where natural resource revenues often constitute the bulk of a government’s funds. As we’ve seen in countries such as Syria and Iraq, such widespread graft (combined with a lack of transparency) breeds disillusionment and instability—and can have very serious national security consequences for the United States.
Corruption is more than just a threat to economic growth and human rights; corruption threatens U.S. national security by fueling and funding terrorism and driving conflict globally. Disclosure of company payments to governments for access to natural resources, and government commitments to publish receipts of those payments, are key to battling corruption and ensuring citizens benefit from their country’s natural resource wealth.
We would strongly urge you to consider ways to strengthen anti-corruption measures rather than weaken this important safeguard.
We again call on you to reject the pending Congressional Review Act resolution to roll back the bipartisan Cardin-Lugar amendment of the Wall Street Reform and Consumer Protection Act.
Should you have any questions, please feel free to contact Clark Gascoigne at [email protected] or +1 (202) 827-6401.
The FACT Coalition
Deputy Executive Director
The FACT Coalition
1225 Eye St. NW, Suite 600 | Washington, DC | 20005 | USA
+1 (202) 827-6401 | @FACTCoalition | www.thefactcoalition.org