Trump’s Swamp


During his campaign, US president Trump had promised to dry out the swamp in Washington, D.C. (Austrians will remember the former President Kirchschläger’s announcement, “die sauren Wiesen Österreichs auszutrocknen”). And then, during the week that the new Secretary of State, Rex Tillerson, was confirmed by the Senate, the House of Representatives voted to abolish the „Publish what you pay“ rule, wich required listed US gas and oil companies to publish in their annual reports all payments made to foreign governments, be they royalties, fees, bonuses, taxes and any other payments, project by project, country by country. This rule was pat of the Dodd-Frank Act (Section 1504), enacted after long consultation in 2010 as part of the lessons learned from the financial crisis.

It is noteworthy that Mr. Tillerson, former CEO of Exxon-Mobil, had vigorously lobbied against this rule. Has he now been given a swampy „inaugural dowry“ by his president? With this provision, the US had become the leading country to attempt to weed out the endemic corruption enabled by the international hydro-carbon firms to the benefit of the decisionmakers in oil and gas-rich countries. We know that many of the prime ministers and their ministers in oil-rich countries have become exceedingly rich, while their populations starve. The Financial Times on Feb. 23, 2017 cites the example of Equatorial Guinea (with ExxonMobil the dominant producer), where per-capita income for the country as a whole has risen to $ 40.000, while three quarters of the population starve on less than 2 $ per day (the „official“ poverty rate). Similar conditions reign all over the world. While „Publish-as-you-pay“ may not be the silver bullet against corruption, it was an important first step and has been followed by Canada, Norway and the EU (EU Transparency Directive 2013). A number of international oil companies have begun to report, others were to follow.

Of course, by now we know that the Trump administration (with or without Mr. Tillerson) is partial to the oil, gas and coal industry. His decisions on reversing the existing bans on the Kekystone pipeline, on the Dakota access line, on coal mining is only topped by his appointment (and the Senate‘s confirmation) of Mr. Pruitt, the former Oklohoma attorney general, who has 12 lawsuits against his new agency under his belt, and who during his hearing did not agree that hydro-carbons and coal cause climate change.

So, in his first 100 days, President Trump has struck significant blows against world-wide corruption in one of the worst offending sectors, and against the environment, whose protection he (and Congress) have entrusted to a fox in the henhouse. ExxonMobil will be grateful, as will be a number of dictators and autocrats in many of the oil and gas producing countries.

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Filed under European Union, Financial Market Regulation, Global Governance, Socio-Economic Development

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