A little-known segment of the Dodd-Frank bank reform bill has been revoked by Trump’s Republican Congress and it allows major global corporations to do what they do to get business done: bribe foreign governments.
The measure to repeal Section 1504 passed by a vote of 52-47 strictly according to party lines and was done in a pre-dawn vote on Feb. 3, 2017. The vote repealed a SEC regulation requiring payment disclosures that U.S listed energy companies and others in the natural extraction business make to foreign governments. Revoking the regulation now is raising issues about corporate transparency, its impact on shareholders and how corruption contributes to terrorism, poverty and climate change.
The repeal of Section 1504 of Dodd-Frank required oil, natural gas and mineral companies to report payments made to foreign governments. Congress and Trump’s decision to eliminate this rule can fuel corruption and hinder the ability of citizens to benefit from natural resource extraction revenues, some contend.
The rule was very contentious even when it was being proposed. The SEC originally issued Section 1504 (also known as the Cardin-Lugar amendment) in August 2012, but it was delayed after a lawsuit challenging the rule was filed by the American Petroleum Institute and other business groups. A new rule was issued on June 27, 2016 and this is the one that was revoked.
Of course, corporation corruption is not new, but the global scope of it today makes the repeal of this Dodd-Frank rule even more chilling. Corruption is now an officially sanctioned practice allowed by the U.S. government and it is only a matter of hours before the cash floodgates are opened when the payoffs will start. That’s not my opinion, but the opinion of large groups that track corporation corruption and how it impacts foreign governments.
Groups, such as GlobalWitness.org and transparency.org note the direct link between terrorism, poverty, crime, drug smuggling, the need for illicit money laundering, and child exploitation in countries that accept bribes. Think “Heart of Darkness” type corruption from the 19th century or the more modern versions depicted in Blood Diamond, about the war in Sierra Leone.
Transparency.org even links corporation corruption to climate change as corporations pay bribes to circumvent and pollution and air quality controls, or open extraction companies that disregard all local anti-pollution regulations. On their site, this group says: “Many of those countries judged most vulnerable to the most visible effects of climate change– drought, flooding, storms or rising sea levels – are also countries where experts perceive high levels of corruption in public services.”
But this topic of corporate corruption is not an abstract subject. It lays at the basis for many of America’s global corporations, including the biggest culprit, Exxon. Rex Tillerson, Trump’s new U.S. Secretary of State, started at the company and over his 42-year-long career eventually became its CEO. He is therefore no stranger to knowing how the company does business worldwide. And now, Exxon is a main beneficiary of the revocation of the anti-bribery rules. It’s also within the realm of possibility that the Trump organization itself has bribed some companies and municipal leaders in the U.S.
Bribery As A Business Technique
Exxon is familiar with bribery, as cited in numerous publications and studies. There are many examples. Here are a few:
· In West Africa, Exxon Mobil made lucrative deals with the government of Equatorial Guinea, “which arbitrarily detains and tortures critics, disregards elections, and has faced international prosecution for using oil profits to enrich the president’s family,” according to the New York Times. The same story says “doing business in Equatorial Guinea, Exxon Mobil was complicit in reinforcing President Teodoro Obiang Nguema Mbasogo — a strongman who has held office since 1979.” Exxon Mobil and other oil companies deposited hundreds of millions of dollars owed to Equatorial Guinea into a bank that the Mbasogo family government “literally used the oil wealth of the country as a personal A.T.M.,” said Arvind Ganesan, a director at Human Rights Watch. A similar practice was followed in Nigeria, the largest oil producer in Africa. During this entire period, Tillerson was Exxon’s CEO.
· In Nigeria, the site GlobalWitness said in 2009, that an Exxon subsidiary, Mobil Producing Nigeria (MPN), agreed to pay $600 million to the Nigerian government to renew its 40% share of three oil licences. “The deal secured MPN’s interest in some of Nigeria’s largest oil-producing assets, which were reportedly contributing around a quarter of Nigeria’s entire annual output of oil in 2012,” the site said.
So how does Exxon officially state its corporate corruption policies? In this Dec. 16, 2016 NYT article, an Exxon spokesman said “We’re a company that follows the laws. Absent a law prohibiting something, we evaluate it on a business case basis.”
But, of course, the revocation of the anti-bribery regulation does not just affect ExxonMobil. It means the flood gates are now wide open on global corporate corruption by Exxon and any other U.S. company that decides to slip envelopes of cash to key decision makers. This is the way it is done in Atlantic City, Chicago, Los Angeles and Lagos. Now, it is all permissible again, just like the old days.
But there is a definite pattern here that should concern all rational Americans. We have a president who does not release his taxes, ignores conflict-of-interest, has a cabinet of billionaires who probably are not concerned about bribery at the grass-roots level, a Secretary of State whose company has engaged in bribery, and a Republican Party that chooses to ignore major, festering threats to national security, but approves of revoking rules (such as Section 1504 of Dodd-Frank) that make bribery legal and encourage terrorism.
Americans should be rightfully confused by the Trump administrations erratic and vapid policies, but they are not irrational. This is the way billionaires do business. Now, Americans who are fascinated about the inner lives of the rich and famous can see firsthand how business is done by unchained corporations on a global level. It will not be pretty, nor will it be good for average citizens, but at least Americans have a free ring-side seat to their own debacle.