You know that Wall Street reform bill pending in the Senate? Some last minute insertions add up to a surprisingly big win for the developing world.
Oil Companies Required to Detail the Dough Paid to Foreign Governments
First, kudos to Senators Dick Lugar (R-Indiana) and Ben Cardin (D-Maryland) for inserting strong provisions that require extractive companies (oil, natural gas, etc.) to detail in their annual Securities and Exchange Commission (SEC) filings the payments they make to foreign governments.
One would think that oil-rich and mineral-rich countries would be, well, rich. Big international firms move in to extract these resources and pay royalties, fees, taxes, bonuses and other monies to national governments. Unfortunately, too frequently this money is put to work lining the pockets of dictators and warlords, rather than building schools or health clinics.
Lugar's bill, which was supported by The ONE Campaign, forces U.S. companies to issue an annual report on the type and total amount of these payments as well as governments in receipt of payments. A coordinated international effort is afoot to get the governments to do the same, so that discrepancies can be spotted. For instance, an initial reporting effort in Nigeria indicates over $800 million of unresolved differences between what companies said that they paid and what the government said it received. Exxon Mobile and Shell are only two of the big U.S. firms operating in Nigeria, where catastrophic oil spills are endemic.
Once U.S. firms are required to detail their payments to foreign officials, the citizens of these countries will know how much their governments are receiving and from whom, giving them a fighting chance to hold their government accountable for investing those funds in critical needs such as food, health and education.
High-Tech Firms Required to Report on Conflict Minerals
Three cheers for Senators Sam Brownback (R-Kansas) and Russ Feingold (D-Wisconsin) for making progress regarding the war in the Congo and the problem of conflict minerals.
Eastern Congo is the site of an on-going and horrific war that has claimed 5 million lives. Many U.S. consumers will be surprised to learn that their pretty, shiny toys including iPhone, iPad, iPod and Mac, laptops and digital cameras are linked to this conflict by the tin, tantalum, tungsten found inside these products. The Congolese militia owns and controls many of the mines that source these materials, and too many U.S. firms are not being rigorous in ensuring that their supply chain does not include the mines that fuel the conflict. As New York Times columnist Nicholas Kristof wrote in a column entitled Death by Gadget: "They want you to look at a gadget and think sleek, not blood."
For over a year, the Enough project, the rocking anti-genocide organization, has tried to raise awareness of the issue and has hounded the firms -- including Apple, Dell, HP, Nintendo and Research In Motion (Makers of Blackberry) -- with some effective netroots campaigning. Campaigners are thrilled the measure was included in the financial reform bill and are anxious to see the bill passed.
The Brownback-Feingold measure would force firms to report on where they get their mineral inputs, and submit to an independent audit. Campaigners expect that public pressure will force them to clean up their supply chain and make sure they are getting their tantalum from Australia rather than from the Congo. The measure also requires the U.S. State Department to develop a map of mines owned by the militia and develop a detailed plan to address the problem.
Wall Street Forced to Spin Off Food Commodity Speculation
Harper's Magazine has an incredible story in its July edition exposing how Wall Street speculators bumped up food commodity prices 80% between 2005-2008. Once the housing market began to go south, they needed to engage in other speculative investments to keep those big bonuses rolling in. According to Harper's: "The global speculative frenzy sparked riots in more that thirty countries and drove the number of the world's food insecure to more than a billion. The ranks of the hungry had increased by 250 million in a single year, the most abysmal increase in all of human history."
Thanks to Senators Blanche Lincoln (D-Arkansas), Senator Chuck Grassley (R-Iowa), the Wall Street reform bill brings these speculative bubbles out of the shadows and into the light of day. Large Wall Street firms engaged in speculative food and energy derivatives trading will be forced to spin off their derivatives desks into a separately capitalized affiliate, making speculation in these markets much more costly. In addition, all trades will be cleared by regulators and exchange traded where pricing and positions will be transparent. Capital requirements and margin requirements will apply, putting real money behind the bets. Position limits will apply, making it more difficult for a few players to dominate the market.
"If used seriously, these are extremely effective policy tools for inhibiting and bursting speculative bubbles," says economist Robert Pollin, who has written about the harms caused by commodity speculation for developed and developing nations.
These small provisions aid in global efforts to bring transparency and accountability to international firms that travel around the world and quietly engage in destructive business practices that they don't want their customers or shareholder to know about. By cracking down on these shameful business practices, the Wall Street reform bill take a big step in the right direction. The bill is one vote short in the Senate, let Congress know you support the reform effort.
How to vote
Vote-by-mail ballot request deadline: Varies by state
For the Nov 3 election: States are making it easier for citizens to vote absentee by mail this year due to the coronavirus. Each state has its own rules for mail-in absentee voting. Visit your state election office website to find out if you can vote by mail.Get more information
In-person early voting dates: Varies by state
Sometimes circumstances make it hard or impossible for you to vote on Election Day. But your state may let you vote during a designated early voting period. You don't need an excuse to vote early. Visit your state election office website to find out whether they offer early voting.My Election Office
General Election: Nov 3, 2020
Polling hours on Election Day: Varies by state/localityMy Polling Place