Trump To Repeal Dodd-Frank Anti Corruption Rule

President Trump signed legislation to repeal a Dodd-Frank anti-corruption measure requiring oil and mining companies to disclose payments to governments.  The rule had required public oil, gas and mineral extraction companies to disclose annually its payments to both foreign governments and the U.S. government.

According to lawmakers, these disclosures help fight corruption in resource-rich countries. The requirement was the Cardin-Lugar Anti-Corruption Provision of 2010’s Dodd-Frank Act – signed by former President Barack Obama and named for former Sen. Richard Lugar, R-Ind., and Sen. Ben Cardin, D-Md. The regulation was widely support from Democrats, who argued the transparency requirement could reduce instances of corruption in resource-rich countries overseas.

The goal of the rule is to prevent foreign leaders from skimming off the payments that drillers and miners make to their countries. It was put in place to stop the corruption that enriches the politically connected but deprives regular people of their country’s mineral wealth.

The oil industry had fiercely lobbied against the measure. The resource extraction rule has been controversial since it was mandated in 2010, which is why it took six years for it to be finalized.  Exxon, Chevron (CXW) and the National Mining Association were among the dozens of entities to submit comments opposing the rule.

Longtime ExxonMobil CEO Rex Tillerson, who is now secretary of state, personally lobbied against the rule, flying to Washington, D.C., to meet with then-Senator Richard Lugar in 2010 to try to get the measure removed from Dodd-Frank.  The American Petroleum Institute, the chief U.S. energy lobbying organization”s main argument against the rule was that it puts U.S. companies at a disadvantage, because their foreign competitors are not subject to the requirements.

However, many major European drillers like BP, Total and Royal Dutch Shell, Russian oil and gas giants Rosneft and Gazprom, as well as Canadian firms must report what they pay to foreign governments.  The U.S. rules would have forced some Chinese and Brazilian firms to do so as well.

House Speaker Paul Ryan said in a statement that the provision in question “would have put American oil and natural gas companies at a disadvantage on the world stage, and actually could have threatened the safety of American workers abroad.”

Lawmakers used the Congressional Review Act, a seldom-used legislative route that essentially fast-tracks the regulatory repeal process. By accessing the provisions laid out, it allows lawmakers to expedite a resolution that requires little notice before introduction and is not subject to filibuster.  It also requires only a simple majority of 51 votes in the Senate to pass.