Five years ago, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) was signed into law. Nevertheless, sections of the law still remain to be implemented because of delays in enacting regulations. Five years should be more than adequate time to accomplish this task. During just two years of the productive 111th Congress, the entire complex and lengthy bill was drafted, debated in House and Senate Committees, voted on in both chambers and then subject to further open debates over two weeks in the House-Senate conference committee. I remember the feeling of accomplishment as we completed our marathon all- night final session. That morning, I never anticipated that 5 years later we would still be waiting for the SEC to put into effect the regulations called for by Sec. 1504 of Dodd-Frank.
Sec. 1504 is simple. It requires companies listed on U.S. stock exchanges who engage in extractive industries (for example oil, gas, mining) to report the amount of money they pay for each project in which they remove the mineral wealth of that nation. Some countries in Africa, for example, can be abundantly rich in minerals while great numbers of their people live in desperate poverty. Some countries with great mineral wealth can also have a corrupt political system. The public disclosure requirements of Sec. 1504 acknowledge the right of the people of those countries to know how much money is paid for that mineral wealth, and to decide how it should be spent. Public disclosure of the payments would shed needed light on the estimated trillions of dollars flowing into these countries - but not flowing to the needed hospitals, schools, jobs, infrastructure and environmental protections that would benefit the people. Instead of filling the gap in health care services, the dollars may be filling the pockets of corrupt rulers. The sunshine called for in Sec. 1504 could be a valuable tool in the fight against political corruption - but it needs the SEC to act.
Regulations were written and initially published by the SEC, but they were fought by the petroleum industry and taken up on appeal. The SEC prevailed for the most part but since that decision was rendered two years ago, it has not re-published regulations. In the summer of 2011, when Dodd-Frank was passed, the U.S. was a world leader in this anti-corruption effort. Since then, other nations, taking direction from Sec. 1504, have implemented their own disclosure regulations and sadly the U.S. now lags behind. The delay by the SEC in promulgating regulations has led to 5 years without the clear intent of Congress being put into actual effect.
Five years is long enough even by Washington standards. It is time for the SEC to act and publish regulations regarding Sec. 1504. #No Secret Deals.