Here’s the background: The Extractive Industries Transparency Initiative (EITI) is a major international effort to fight corruption in oil-rich developing countries where, history shows, the vast sums from petroleum royalties and taxes are often squandered through waste, corruption and mismanagement. Developing countries who join EITI, an international NGO founded in 2003 in Oslo, Norway, are required to publish annual public reports of all the money they receive from petroleum companies, mining firms and other extractive industries, so that citizens and watchdog groups can “follow the money.” You can learn more about it here.
Senator Lugar has long championed efforts to fight corruption in developing countries so that our foreign aid dollars would be used more effectively and each nation’s own funds would be spent more wisely. He held a major series of hearings at the Senate Foreign Relations Committee on the anti-corruption programs at the World Bank and its sister institutions. With Sen. Ben Cardin (D, Md.), he co-sponsored the 2010 Cardin-Lugar amendment, which requires all U.S.-listed oil and mining firms to report their payments to foreign governments. He also praised the work of EITI and pressed the U.S. government to join EITI as a reporting member, in order to set an example for poorer countries to sign up. The Lugar Center’s project on Foreign Aid Effectiveness likewise works to promote a higher standard of transparency that enhances the prospect that development dollars will produce the most demonstrable results for impoverished people. (See this TLC blog from December, 2015 here).
Upon Sen. Lugar’s and Sen. Cardin’s urging, the Obama administration agreed to establish USEITI within the Interior Department. It set up a committee, called the Multi-Stakeholder Group (MSG), to oversee the arduous process of collecting and reconciling the vast amounts of revenue data from oil, gas and mineral production in the U.S. A member of the TLC board, Neil Brown, sits on the MSG.
According to this week’s report, the 25 companies who have voluntarily joined USEITI reported $4.8 billion in payments to the federal government, which accounts for about 80 percent of total $6.1 billion the government received in energy and mineral revenues.
Jay Branegan is a Senior Fellow at The Lugar Center.