After years of delay, a new Lugar legacy comes into force
- By Jay Branegan, Special to TheStatehouseFile.com
On Sept. 3, citizens of Indianapolis and national dignitaries gathered downtown to dedicate a new memorial to the late Sen. Richard Lugar. The program paid tribute to Lugar’s courage, integrity and vision, and the memorial, now installed on Lugar Plaza at the City-County Building, recounts many of his accomplishments. Ironically, the late senator was not finished.
Three weeks after the ceremony, a legislative initiative that he originated 16 years ago came to fruition. It was the first implementation of his bipartisan bill to battle corruption in oil- and mineral-rich developing countries, known as the Cardin-Lugar amendment.
“Despite years of delays, I am proud that we are finally seeing the first disclosures under the Cardin-Lugar amendment,” Lugar’s co-sponsor, Sen. Ben Cardin, D-Maryland, said recently at an online event to mark the milestone.
A simple transparency measure to require the big American oil, gas and mining companies to report their payments to foreign governments, the amendment became law on July 21, 2010. That was the easy part.
The legislation had its origins in Lugar’s concern about America’s over-reliance on oil imported from overseas, particularly from unstable countries in the developing world. Lugar observed that many countries rich in natural resources like coal, gas and minerals are nevertheless poor. The gusher of cash from extractive industries often gets diverted by recipient governments to fraud, corruption, wasteful spending and military adventurism, a condition known as “the resource curse.”
This affliction hurts Hoosiers and other Americans too. Instability in oil producing countries can raise gas prices here. Moreover, “it exacerbates global poverty which can be a seedbed for terrorism, it dulls the effect of our foreign assistance, it empowers autocrats and dictators,” Lugar wrote in a 2008 staff report he commissioned to launch the legislative effort to combat the resource curse.
Lugar believed the most essential step was to reveal just how much money each autocrat was making from oil, gas, copper, gold and other resources. These vast sums were often secrets known only to the governments and the companies who pay them. Disclosure enables citizens and global watchdogs to “follow the money” and hold governments more accountable.
Lugar’s original bill, the Energy Security Through Transparency Act, requiring U.S.-listed oil, gas and mining companies to publicly disclose their taxes, royalties, bonuses and other payments, drew opposition from the oil industry and its powerful lobbying arm, the American Petroleum Institute. Rex Tillerson, then the head of oil colossus ExxonMobil and later President Trump’s secretary of state, came to Washington personally to lobby Lugar to drop the legislation, arguing it would hurt Exxon’s relations with Russia.
The senator concluded that the legislation would not be costly or competitively damaging to the companies and would assert America’s traditional role as a global leader against corruption. Congress agreed, passing the bill as an amendment offered by Lugar and Cardin to financial reform legislation. After passage, Lugar said, “This law will set the global standard for years to come.”
He was right: Canada and the European Union, inspired by Cardin-Lugar, soon adopted similar rules for their extractive industries, strengthening the global push for transparency. Unfortunately, the U.S. oil industry worked to undermine Cardin-Lugar. What followed was a Washington-style lobbying war of attrition that played out in the courts, the agency and Congress. After years of delay, the SEC issued a strong regulation implementing Cardin-Lugar, but Congress invalidated it in early 2017.
But the legislation itself remained on the books, and finally, at the end of 2020, the SEC issued another version of the regulation. It set a generous timetable for the companies to make their initial disclosures at the end of September 2024. Those reports, the first of many to come in future years, for the first time disclosed the billions flowing from American companies to countries like Indonesia, Angola, Libya, Equatorial Guinea, Malaysia and Nigeria.
The senator, who passed away in 2019, never got to see these results, but the delay would not have surprised him. He always played the long game when legislating. From Nunn-Lugar and other arms control efforts to his authorship of the landmark Conservation Reserve Program to his protection of the National School Lunch Program, he focused on initiatives with lasting impact.
He knew that solutions to difficult issues required persistence and determination. He built bipartisan coalitions devoted not just to passing legislation but also to implementing it over decades. Lawmaking by partisan sound bite rarely stands the test of time. In his words, “Whatever is won today through division is usually lost tomorrow.”