Gutless Congress Votes Yes To Corruption – February 3, 2017

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For Immediate Release: February 3, 2017

Jana Morgan, Director –

Mobile 703-795-8542

Gutless Congress Votes Yes To Corruption

Congress Repeals Transparency Rule by Passing “Kleptocratic Relief Act”

Washington, D.C. – Today Congress passed a resolution that voids a critical
anti-corruption rule for oil, gas and mining companies. The 40 member
Publish What You Pay – United States coalition strongly condemned this
action. By scrapping an important measure to combat graft in one of the
world’s most corrupt industries, lawmakers sided with Big Oil lobbyists and
voted against American energy and national security interests.

The rule, which implemented the bipartisan Cardin-Lugar anti-corruption
provision, required US-listed extractive companies to publish their
project-level payments to US and foreign governments, such as taxes and
royalties. By bringing transparency to oil, gas and mining payments, the
Cardin-Lugar rule, also known as Section 1504 of the Dodd-Frank Act, aimed
to help break the devastating cycle of corruption and poverty that breeds
public resentment and instability in resource-rich countries.

“Instead of taking on corruption as they had promised, Congress and the new
administration have gutted an important anti-graft measure that helps keep
Americans safer and more informed,” said Jana Morgan, Director of Publish
What You Pay-US. “The Cardin-Lugar rule is critical for ensuring that
authoritarian regimes around the world cannot treat oil and mining revenues
like state secrets, breeding corruption, distrust, and conflict that harms
U.S. security and energy interests. Many of the terrorist threats faced by
the US and its allies originate in resource-dependent regions, where
corrupt elites have looted natural resource revenues to line their own
pockets and fund extremist groups.”

US leadership in this field led to the creation of a global standard of
transparency for the extractive industries. Since the Cardin-Lugar
provision was adopted in 2010, 30 other countries including the UK, France,
Canada and Norway have followed suit, passing their own versions of the
legislation. As a result, European extractive companies have disclosed
around $150 billion in payments to governments over the past year, with no
harmful effects on their competitive position. This includes state-owned
Russian companies Rosneft and Gazprom, which are listed on European
exchanges and thus required to report their payments under EU law.

Despite the rhetoric used by the American Petroleum Institute (API), the
shadowy lobbying arm of Big Oil, to misinform Congress, the voided rule
would have required state-owned Chinese companies to report their payments,
as well as other state-owned companies like Brazil’s Petrobras, which was
recently embroiled in a corruption scandal that damaged the country’s
economy. Today’s action enables those state-owned companies to continue to
operate in secrecy.

“Today, Congress has given a gift to Big Oil and kleptocratic governments
around the world.” said Morgan, “It is clear that the interests of the
American public have taken a backseat to those of deep-pocketed lobbyists
and secretive corporations. However, despite this shockingly misguided
decision by the Republican-led Congress, the global mandatory disclosure
standard remains intact.”

The rule has received widespread support from the majority of the world’s
major extractive companies, including Dallas-based Kosmos Energy,
Nevada-based Newmont Mining, BHP Billiton, Rio Tinto, Total, and Statoil.
The regulation was also lauded by global civil society groups, foreign
governments, and investors with $10 trillion dollars in assets under
management. Public opposition to this law came only from ExxonMobil,
Chevron and API. Morgan continued, “A small number of bad actors have spent
millions of dollars lobbying members of Congress to block the law so that
their payments can remain secret.” From 2014-2016 the oil industry spent
nearly $350 million on lobbying and campaign contributions to Congress.

Late Thursday night, Democrats on the Senate floor spoke passionately in
defense of the regulation, with Senator Brown (D-OH) calling the repeal
effort the “Kleptocratic Relief Act.” Senator Cardin (D-MD), the original
sponsor of the provision along with retired Senator Richard Lugar (R-IN),
and long-time supporter Senator Leahy (D-VT) were joined on the floor by
Senators Kaine (D-VA), Schatz (D-HI), Merkley (D-OR) and Warren (D-MA).
Democrats criticized Republicans for voting to repeal the regulation, but
refusing to show up to the debate. This morning, the resolution to repeal
the Cardin-Lugar rule passed, with no Republican Senators willing to stand
up against corruption.

On Wednesday, the House Financial Services Committee Ranking Member Maxine
Waters (D-CA) and Rep. Gwen Moore (D-WI) strongly defended the regulation.
The House vote to repeal was largely along party lines, with a handful of
Texas-based Democrats voting in favor. Notably, Chair of the House Foreign
Affairs Committee Ed Royce (R-CA), Rep. Chris Smith (R-NJ), Rep. Walter
Jones (R-NC) and Rep. Brian Fitzpatrick (R-PA) voted against repeal.


Notes to editors:

● For an overview of the Cardin-Lugar rule, see this fact sheet:

PWYP-US – SEC Final Rule Fact Sheet

● PWYP-US submitted a letter to Senate leadership defending the
Cardin-Lugar Rule:

PWYP-US Letter to the Senate on S.J.Res.9

● Claims by API that this regulation hurts US company competitiveness and
that disclosure is barred in a handful of countries have been repeatedly
rebutted by PWYP-US, coalition members, government officials and academics.
Yet these disproven claims were repeated by Senators rule during the House
and Senate discussion of the disapproval resolution. See this document for
more information:

PWYP-US – Myth Busting: The Truth About the Cardin-Lugar
Anti-Corruption Provision

● See the this appendix of supportive statements by oil, gas and mining
companies in favor of the June 2016 regulation:

Company Statements and Submissions in Support of the Cardin-Lugar

● Yemeni and Iraqi civil society organizations submitted a letter stressing
the importance of the Cardin-Lugar rule to protecting US and Global

PWYP – Letter to US Senate and House from Iraqi and Yemeni civil
society organizations

● The Cardin-Lugar Rule has a long bipartisan legislative history, see this
document for more information:

PWYP-US – Legislative History of the Cardin-Lugar Amendment or Section

● A record of oil and gas industry lobbying payments to members of Congress
is listed on Open

OpenSecrets – Oil & Gas: Long-Term Contribution Trends

Oil & Gas: Lobbying, 2015

● Removal of this rule will benefit secretive leaders globally including
Vladimir Putin. Read more in this post on the PWYP-US blog:

PWYP-US – A gift for Putin, courtesy of Congress

● Removal of this rule threatens national security. Read this Global
Witness blog for more information:

Global Witness – Why Republican Plans to End Anti-corruption Regulations Can Put Our
Troops Serving Overseas in Greater Danger