Congress passed it, President Obama signed it, but two years later we still do not have the rules that will implement the key “Cardin-Lugar” transparency requirements in the Dodd-Frank Wall Street Reform bill. The Securities and Exchange Commission (SEC) is responsible for producing the rules oil, gas, and mining companies will follow to disclose payments to governments in exchange for resources.
In March we called on our supporters to sign a petition calling for oil companies to actively support strong rules for transparency under the new law. More than 25,000 Oxfam supporters signed it, and our leaders in Washington are also urging the SEC to go “as far as possible,” in the words of Secretary of State Hillary Clinton, to implement financial transparency measures.
In early May Pulitzer Prize-winning journalist Steve Coll wrote about the Cardin-Lugar provision in Businessweek saying that the provision “may only be a start toward breaking the resource curse. But it’s a start all the same. Dodd-Frank is the law of the land; it’s past time for the SEC to transform the intent of Congress into change.” In this piece he refutes arguments that transparency provisions would make companies covered by the law less competitive than those that aren’t. Coll also makes the compelling case that “tougher rules on transparency would also benefit national security” and cites the landmark study commissioned by Senator Lugar in 2008. The Lugar report argues that corruption linked to oil and instability in places such as Nigeria create a “seedbed for terrorism,” and contribute to volatile energy prices.
Later in May the Irish rock star Bono published an editorial in Time magazine calling on leaders at the G8 meeting to support strong transparency rules in both the US and EU. “The information lets Africans hold their leaders to account for the way revenue is spent,” he says, noting that “Transparency is the vaccine to prevent the biggest disease of them all—corruption, which any African can tell you is killing more kids than AIDS and malaria combined.”
Now the SEC faces a legal case for dragging its heels more than a year beyond the deadline that Congress set for final rules. . Oxfam America filed a lawsuit against the SEC on May 16. The suit states that the SEC is unlawfully delaying the final rules that will implement the transparency measures in Dodd-Frank.
Congress instructed the SEC to finish the final rule by April 17, 2011. Ian Gary, who is leading Oxfam’s work on revenue transparency, says “For those living in poverty in resource-rich countries, there’s no time left to wait.”