Congress could imminently repeal anti-corruption measures put in place after the 2008 financial crisis. If Congress does repeal these transparency efforts it will be a mistake.
On behalf of the hundreds of faith communities who supported Section 1504 or the “Cardin-Lugar amendment” to the Dodd-Frank Wall Street Reform Act, I’d encourage all Members of Congress to consider how weakening 1504 could impact vulnerable populations. Now is the time to hold hearings for Congress, not for hasty actions that prevent members from understanding why a post financial crisis world needs more accountability, not less.
As the crisis roared on, developing countries lost a trillion dollars a year due to corruption and tax evasion. Since the crisis a popular name concretized to describe this revenue loss – “illicit financial flows.” I supported the “Cardin-Lugar amendment” because it was a common sense, bipartisan model to combat revenue thefts from the poor and start to address these illicit financial flows.
Section 1504 requires annual reporting by oil, gas and mining companies to the Securities and Exchange Commission (SEC) of financial activity and payments to governments where these companies operate. Requiring disclosure of these payments helps fight corruption by extending the transparency we have in our own federal budget to other countries that need to be more forthcoming about public finances.
Because Congress acted on this transparency initiative, the world followed. Europe and Canada passed and expanded Congress’ action and the idea of increasing this type of financial reporting has now become a critical part of global development agreements. As Congress prepares to debate the U.S. budget and foreign assistance, we should support countries in their efforts to capture greater revenue at home. We should support citizens in developing countries as they work to make sure their leaders are not bribed when they are negotiating the sales of their natural resources.
Bribes and other illicit transactions, including outright theft, by leaders of resource-rich countries perpetuate poverty, fuels conflict and threatens our national security. In large part, companies that are subject to Section 1504 are already tracking and reporting these payments, and face minimal to no disadvantage in the marketplace.
As people of faith we see the issues that impact the poor - corruption and tax evasion - as moral issues.
Congress needs to slow down and understand how diminishing 1504 hurts poor people and budgets. It’s a moment to expand the power of the “Cardin-Lugar amendment,” not dismantle it.
Eric LeCompte is the executive director of Jubilee USA Network, a religious development coalition representing more than 650 faith groups.
The views expressed by this author are their own and are not the views of The Hill.