Trump administration deals a blow to international anti-corruption efforts

The decision has been met with widespread criticism from transparency advocate groups.

Earlier this month, the Trump Administration made it substantially easier for American oil and gas companies to hide their financial dealings. (CREDIT:  AP/THIBAULT CAMUS)
Earlier this month, the Trump Administration made it substantially easier for American oil and gas companies to hide their financial dealings. (CREDIT: AP/THIBAULT CAMUS)

Months ago, in one of his first official acts as president, Donald Trump approved a measure repealing a requirement that mandated American oil and gas majors disclose how much money they had given to foreign governments. The measure, in essence, would have forced companies like Chevron and ExxonMobil to disclose if they were bribing corrupt, authoritarian governments overseas.

At the time, Trump’s move was met with widespread condemnation from pro-transparency groups. For Global Witness, an international NGO, the repeal represented an effort to “enable the corruption President Trump told us all he would end,” with the decision “pos[ing] a grave threat to U.S. national security.” A statement from Publish What You Pay, a group of civil society organizations that pushes for financial transparency, described the repeal as a “retrogressive step for oil, gas and mining industry transparency and for the global battle against corruption.”

The administration, however, paid no mind to those concerns and repealed the regulations anyway.

Since then, things have only gotten worse.

Earlier this month, with little fanfare, the administration announced that the United States would also be pulling back from commitments to the Extractive Industries Transparency Initiative (EITI), a consortium that, as Reuters described, “sets a global standard for governments to disclose their revenues from oil, gas, and mining assets, and for companies to report payments made to obtain access to publicly owned resources.” The extraction sector is still widely considered the most corrupt industry in the world, and the EITI — supported by more than 50 countries and the former Obama Administration — remains one of the foremost groups tasked with ending trans-national corruption.

In order to join [EITI, countries] agree to disclose certain amounts of information, and they agree that the disclosure process will be overseen by a group that contains government, company, and — crucially — civil society representatives,” Alexandra Gillies, an adviser with the Natural Resource Governance Institute (NRGI), told ThinkProgress.

But even the EITI’s baseline transparency requirements, which help publicize tax information from major extraction companies, are apparently too much for the current administration. According to a letter from the Department of the Interior’s Gregory Gould, the United States was backing out of EITI because “domestic implementation of EITI does not fully account for the U.S. legal framework” — an excuse that has anti-corruption, pro-transparency groups up in arms.

Daniel Kaufmann, current head of the NRGI, wrote that the move is the “latest in a series of actions in Washington that have damaged the country’s credibility as a proponent of both honest dealings globally and equity for the poor living in countries where resources are extracted by western companies.”

Corinna Gilfillan, the head of Global Witness’s U.S. office, was even more blunt. “When major Russian and Chinese oil companies are disclosing more information about their deals around the world than their U.S. counterparts,” she said, “you have got to ask: what are Exxon and Chevron so desperate to hide?”

Publish What You Pay’s Jana Morgan summed things up simply. “It’s pretty disgraceful for the United States,” she said.

The administration’s excuse — that legal restrictions in the United States prohibited it from implementing EITI recommendations — is equal parts farce and falsehood. There remains no legal stipulation in the U.S. code prohibiting extraction companies, including companies like Chevron and Exxon, from disclosing tax or royalty payments.

The administration’s fallacies were highlighted in a blistering letter from Sen. Ben Cardin (D-MD) and former Republican Sen. Dick Lugar (IN) last week.

“The Department’s justification for withdrawing from EITI — because the initiative contravenes the U.S. legal framework — is a front meant to mask Big Oil and Gas’ money and influence, the real reason fueling this sad day in the movement toward greater global sunlight and transparency in extractive industries,” they wrote. “There is no U.S. law that prevents oil, gas or mining companies from voluntarily disclosing their federal tax payments to the American people. The Trump Administration’s move today is a painful abdication of American leadership on transparency and good governance.”

“We’re walking away from transparency,” NRGI adviser Gillies explained to ThinkProgress. “We’re walking away from something we’ve been telling other countries to do for years.”

The move, which places the United States alongside dictatorships like Azerbaijan and Equatorial Guinea, has largely been drowned out by things like the Trump administration’s financial ties to Vladimir Putin’s inner circle and the ongoing revelations about GOP senatorial candidate Roy Moore. But the ramifications of the United States ending its participation in the EITI are brutal.

Not only will the move help entrench kleptocracies elsewhere, but such entrenchment will also erode the United States’ remaining soft power abroad, Gillies said. As The New Yorker’s Adam Davidson put it, “[T]he Trump Administration is actively implementing, in real policy, its avowed distrust — even contempt — for international compacts designed to improve the lives of people around the world. That is terrifying.”

Given the president’s clear preference for anti-transparency maneuvers — he still hasn’t released his tax returns, after all — the administration’s decision to undercut one of the leading anti-corruptions consortiums is hardly surprising. But with Trump’s clear distaste for things like the U.S. Foreign Corrupt Practices Act, we may not yet have seen the worst of the administration’s moves to curtail transparency, both at home and abroad.