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Oil disclosure mandate makes the cut in Wall Street bill
The House-Senate deal on overhauling Wall Street financial rules includes a little-noticed provision that forces oil and mining companies to disclose payments made to foreign governments in connection with energy projects in their countries.
The inclusion is a victory for Sens. Ben Cardin (D-Md.) and Richard Lugar (R-Ind.), who had failed to force a vote on the provision when the Wall Street bill was on the Senate floor last month.
Sen. Patrick Leahy (D-Vt.) offered the provision as an amendment during a marathon House-Senate negotiation that produced a final bill late last week. Democrats hope to hold final votes and send the Wall Street bill to President Barack Obama’s desk before the July 4 recess, though the death of Sen. Robert Byrd (D-W.Va.) leaves Democrats with one fewer vote.
The measure's spot in the bill is a defeat for the oil industry, which opposes the increased disclosure and has lobbied against the plan along with major business groups, including the U.S. Chamber of Commerce.
The plan, if it becomes law, will force many companies to provide the Securities and Exchange Commission information on payments for production licenses, taxes, royalties and other aspects of energy and mineral projects.
“History shows that oil, gas reserves and minerals frequently can be a bane, not a blessing, for poor countries, leading to corruption, wasteful spending, military adventurism and instability,” Lugar said last year when introducing a bill with Cardin that formed the basis for the provision. “Too often, oil money intended for a nation’s poor lines the pockets of the rich or is squandered on showcase projects instead of productive investments.”
Lugar and Cardin argue the measure would also lead to more reliability of supply and more stable energy markets.
But the American Petroleum Institute (API), the industry’s most powerful trade group, called the mandates misguided in a letter to Senate lawmakers last month.
“Requiring only U.S.-listed oil and gas companies to report every payment made to host governments will create a competitive disadvantage versus quasi-governmental and national oil companies such as Russia’s Gazprom and China National Petroleum Company (CNPC), as well as non-U.S.-listed private companies, which would not be subject to the same requirements,” the group wrote.
But Cardin has called the foreign competition argument a red herring, claiming the plan will apply to large numbers of foreign companies that are subject, for various reasons, to SEC reporting requirements.
Misty McGowen, API’s director of federal relations, called it “disappointing” that the provision surfaced in the Wall Street bill during the final flurry of talks.
“It was placed in the bill with no hearings and no debate,” she told The Hill Monday. “It has a far-reaching effect. We really felt like it needed some debate, some discussion.”
