The Jubilee Blog

House Poised to Repeal Global Anti-Corruption Measure; Senate Action to Follow on Dodd-Frank Transparency Amendment

By Greg Williams

Within the next 24 hours, the US House of Representatives could repeal a bipartisan transparency initiative that affects the oil, gas and mining sector. The "Cardin-Lugar amendment" of the 2010 Dodd-Frank Wall Street Reform Act requires oil and mining companies to disclose financial activity and payments to governments in the countries it operates. While repeal in the House seems likely, transparency advocates hope the Senate will stop any repeal. If repeal measures pass the House and Senate, President Donald Trump would have to sign the bill to go into effect.

"Section 1504 deters bribery, stops corruption and curbs tax evasion. It provides transparency protections for workers and vulnerable populations," explained Eric LeCompte, executive director of the religious development coalition Jubilee USA. LeCompte serves on United Nations expert groups that focus on tax and transparency issues. "We need more laws that promote transparency and financial disclosure. This is not a moment we can walk away from transparency." 

The House vote on the Cardin-Lugar amendment or Section 1504 of Dodd-Frank is part of a so-called Congressional Review Act that would repeal a broad range of federal rules. The Securities and Exchange Commission finalized Section 1504 in June, 2016, six years after Congress passed the amendment that mandated it. Jubilee USA worked on the initial passage of the amendment. Supporters of the "Cardin-Lugar amendment" believe the legislation helps tackle some of the more than one trillion dollars lost each year to corruption and tax evasion in the developing world. 

Senate James Inhofe (R-Oklahoma) announced he will lead efforts to repeal Section 1504 in the Senate.

"We implore Congress to take a step back and study the drastic impacts on poor populations that could come from repealing anti-corruption measures," noted LeCompte, who urged Congress not to harm Section 1504 in a letter sent Tuesday. "This was a bipartisan action that upholds a bipartisan commitment to ending extreme poverty around the world."

Read the letter Jubilee USA's executive director sent to Congress on the legislation 

Congress Could Repeal Bipartisan Anti-Corruption Measure

By Greg Williams

Congress could repeal a bipartisan anti-corruption measure aimed at promoting transparency in the oil, gas and mining sector. The bipartisan "Cardin-Lugar amendment" to the 2010 Dodd-Frank Wall Street Reform Act requires oil and mining companies to publish payments they make to foreign governments. Reuters reports that members of the House of Representatives plan to introduce a Congressional Review Act resolution that would repeal the amendment.

"The bipartisan Cardin-Lugar amendment is not just an important anti-corruption measure, it's an important anti-poverty measure," said Eric LeCompte, executive director of the religious development coalition Jubilee USA. "Congress should not repeal this critical law.‎"‎

Developing countries lose more than one trillion dollars each year to corruption and tax evasion. Countries with substantial natural resources will lose some transparency protections if the "Cardin-Lugar" or Section 1504 of Dodd-Frank is repealed.

"Corruption is devastating for the world's poorest people. Corruption fuels conflict and instability around the world," noted LeCompte. "Congress should promote financial transparency here and abroad."

Oversight Board Meets as Puerto Rico Crisis Deepens

Puerto Rico's "control" board meets January 28 as the island's financial crisis deepens. In a January 18 letter, the Financial Oversight and Management Board for Puerto Rico noted that the island can likely only afford to pay approximately 20% of the debt payments it owes over the next three years. Congress created the board as part of legislation last summer to address the US territory's $70 billion debt crisis.

"The board recognizes that Puerto Rico needs significant debt relief to rebuild its economy," noted Eric LeCompte, executive director of the religious development coalition Jubilee USA. LeCompte testified at the board's November meeting. ‎"If negotiations with creditors fail to achieve a significant debt reduction, the board needs to authorize the court arbitrated bankruptcy process."

Both the oversight board and Puerto Rico's governor are currently meeting with Puerto Rico's creditors to negotiate a potential debt restructuring.

The legislation Congress passed, the Puerto Rico Oversight, Management and Economic Stability Act, or "PROMESA," created a Congressional task force to examine changes to US law that could benefit Puerto Rico. The task force released a report in December recommending changes to tax and health care laws to benefit the US territory. Congress has yet to advance legislation that includes those recommended changes.

"Congress has a lot on its plate right now, but it must not forget Puerto Rico," stated LeCompte. "Millions of American citizens in Puerto Rico are waiting for Washington to do its part to end this crisis."

Read the Financial Oversight and Management Board for Puerto Rico's January 18 letter

Read Eric LeCompte's testimony at the board's November meeting

Seven Years After Devastating Earthquake, Haiti Struggles with Debt ‎and Hurricane Matthew Recovery

by Greg Williams

Haiti's debt approaches $2 billion dollars as it recovers from Hurricane Matthew and remembers the devastating earthquake that shattered the country seven years ago. After the 2010 earthquake, most of Haiti's debt was wiped out following a campaign led by Jubilee USA. $300 million in Haiti's debts were cancelled through a specially created International Monetary Fund (IMF) trust to aid low-income countries struck by natural disasters. 

While Haiti received a $41.6 million interest-free loan from the IMF's "Rapid Credit Facility" to help with Hurricane Matthew recovery, Haiti does not meet the IMF's criteria to qualify for debt relief.

"Debt relief that Haiti received over the last ten years was essential to help one of the poorest countries in the world," noted Eric LeCompte, Executive Director of religious development organization Jubilee USA.‎ "Haiti's debt is rising again, it lacks enough revenue to cope with Hurricane Matthew and meet the needs of its people."

After Haiti's 2010 earthquake, Jubilee USA moved the IMF to create the Post Catastrophe Debt Relief fund. In the height of the Ebola crisis, Jubilee USA worked with the IMF to expand the trust fund to help other afflicted countries. The Ebola affected countries received $100 million in debt relief and additional zero interest lending.

"We've seen some important innovations at the IMF to aid poor countries in times of crisis," said LeCompte who works with UN agencies on global debt policies. "Unfortunately, poor countries only receive debt relief if they meet IMF criteria that the disaster impacted most of a country."

‎Across the Caribbean, small developing islands experience high rates of indebtedness, are vulnerable to hurricanes and don't qualify for existing debt relief instruments. The Bahamas, also recovering from Hurricane Matthew, saw debt rise by 30% in the past four years.

"Our financial system still doesn't have enough tools or the right kind of tools to provide debt relief and rapid debt restructuring in the face of crisis," stated LeCompte.

Read more about Haiti's debt relief

Read more about Ebola debt relief

Read more about the Bahamas' debt

Ecuador Minister Discusses Need for UN Tax Body with Transparency Advocates

by Greg Williams

Ecuador Foreign Minister Guillame Long will meet with civil society groups on Thursday to discuss tax avoidance, corruption and development. The event comes one day before Ecuador takes over the presidency of the G77 and China group of 134 developing nations at an event in New York. Ecuador plans to emphasize tax issues and financing global development during its presidency. 

"Tax avoidance, evasion and corruption are serious problems," noted Eric LeCompte, Executive Director of the religious development coalition Jubilee USA. LeCompte will moderate the January 12 event and serves on United Nations expert working groups that focus on tax and finance. "The developing world is losing vital revenues for building infrastructure and combating poverty."

At the event in Washington, Minister Long is expected to express support for a United Nations body to focus on global tax issues, corruption and transparency. 

In February, Ecuador will hold a referendum on whether to bar public servants from holding office if they hide money or assets in tax havens. Developing countries lose more than one trillion dollars each year to "illicit financial flows" or money that leaves a country due to tax evasion or corruption. Recent estimates from the Economic Commission on Latin America and the Caribbean indicate that the region loses 6.7% of its GDP to tax evasion. The region loses an estimated $85 billion annually due to illicit flows compared with $10 billion received yearly in development aid. A quarter of Latin American and Caribbean residents live on less than $4 a day.

The Washington event is organized by Latindadd, Global Alliance for Tax Justice, Center of Concern, Center for Economic and Policy Research, Jubilee USA Network, FACT Coalition, Public Citizen, Financial Transparency Coalition and Red de Justicia Fiscal de América Latina y el Caribe.