Senate Kills Anti-corruption Rule for Energy Companies

In a 52-47 vote, the Senate approved a resolution already passed by the House of Representatives that wipes from the books a rule requiring companies such as Exxon Mobil (XOM) and Chevron Corp to publicly state the taxes and other fees paid to foreign governments.
Republican President Donald Trump is expected to sign it shortly.

Exxon and other major energy corporations have fought for years to prevent the rule, required by the 2010 Dodd-Frank Wall Street reform law, from seeing the light of day.

After a series of legal battles, the Securities and Exchange Commission in June 2016 completed the regulation, which supporters say can help expose questionable financial ties U.S. companies may have with foreign governments such as Russia.

Senate Democrats raised concerns that Exxon's chief executive during those legal fights was Rex Tillerson, who was recently confirmed as U.S. secretary of state and has worked extensively in Russia.

"It should be lost on no one that in less than 48 hours, the Republican-controlled Senate has confirmed the former head of ExxonMobil to serve as our secretary of state, and repealed a key anti-corruption rule that Exxon Mobil and the American Petroleum Institute have erroneously fought for years," said Senator Ben Cardin of Maryland, the senior Democrat on the foreign relations committee, referring to the oil industry's trade group.

Cardin wrote the Dodd-Frank section on the payments to foreign governments with Richard Lugar, a former Republican senator.

Other top Senate Democrats, including New York's Charles Schumer and Ohio's Sherrod Brown, also condemned the vote.

Under a barely used law known as the Congressional Review Act, lawmakers can stop a recently enacted rule in its tracks with simple majorities in both chambers, eliminating senators' ability to filibuster and stall a vote.

The review act also bars agencies from revisiting an overturned rule. That could pose a legal conundrum for the SEC, which is required by law to enact a payments regulation.

The rule's critics said it was duplicative with existing regulations and also too costly and burdensome for oil companies to implement. They also said it put U.S. corporations at a competitive disadvantage with state-owned companies in other countries that do not have to share detailed information.

 

But the reversal could also give American companies an edge over Canadian and European rivals who face some of the toughest transparency rules in the world, according to company executives, legal experts and trade groups.