The GOP just gave ExxonMobil a gift
Last week, Senate Republicans in the United States voted along party lines to get rid of the Dodd-Frank rule that forces huge oil and gas companies to disclose how much they pay foreign governments while they’re doing business abroad.
Now, you can be excused if you feel like the urgency for killing this specific rule seems to have come out of nowhere. Arguments for getting rid of Dodd-Frank — the 2010 legislation meant to help protect taxpayers from another financial crisis — usually involve helping overregulated community banks that can’t lend, or helping small businesses get loans.
The arguments usually do not involve helping massive oil companies like ExxonMobil keep its dealings in foreign countries secret. Yet getting rid of this rule was first on the agenda.
“The fact that that’s what they’re singling out for their attack tells you where their agenda is heading. It tells you that they’re not serious about what they say they want to do,” said Michael Barr, a professor of law at the University of Michigan and expert on financial reform. “It’s not that they want to unleash lending in the US, it’s that they want to let Wall Street firms do whatever they want. It’s not helping families or small businesses.”
A CEO’s work is never done
In 2010, as this rule was being written into Dodd-Frank, Tillerson, then the CEO of Exxon, visited Richard Lugar, then the Republican senator from Indiana — one of the rule’s architects — in hopes that it would never see the light of day.
According to Politico, Tillerson argued that forcing his company’s dealings with foreign governments into the light would hurt its competitiveness in the market.
But Lugar was undeterred. By forcing transparency, he hoped that governments in poor, resource-rich countries would also be forced to give their people a fairer shake. Exxon continued to lobby against the rule. It expressed its displeasure to the Securities and Exchange Commission in a comment letter in March 2016, when Tillerson was still CEO.
That aside, it could be considered a political success. After the rule was passed in the US, the European Union, Norway, and Canada followed suit with their own versions. That means a lot of Exxon’s competitors have to disclose to someone, even if not to the US government. Even state-owned Russian firms have to adhere to this rule to operate within the EU.
Democratic Rep. Maxine Waters of California pointed all of this out in a statement last week admonishing Republicans for rolling back the rule.
“That rule helps fight corruption in the extractive industries sector, provides investors with crucial information on their investments, and enables citizens to demand greater accountability from their governments for spending that serves the public interest,” she said. “It also helps to diminish the political instability in resource-rich countries, which is not only a threat to investment, but also to our own national security.”
She also said that non-state actors like ISIS benefit when oil money falls through the cracks, and that resource-rich countries like Venezuela and Angola have become unstable because of corruption and a lack of transparency in their energy sectors. (Business Insider)