There are plenty of reasons to oppose throwing good taxpayer money after bad oil bets, from fracking’s many environmental concerns to its highly leveraged business model, which critics have likened to a Ponzi scheme. Senate Majority Leader Mitch McConnell said, when commenting generally about financial relief for companies, “We’re not talking about so-called bailouts for firms that made reckless decisions.” That would seem to apply to fracking. But the oil industry employs thousands of workers and has powerful friends in Washington, including President Trump himself, so a bailout is quite possible.
Whatever the merits of a such a rescue, one thing is clear: if American taxpayers are to give their hard-earned dollars to one of the biggest and most powerful industries in the world, they should demand accountability and transparency in return. In particular, small-guy taxpayers should know just how much these billion-dollar corporations themselves have been paying to the government in taxes, royalties, bonuses and other fees. After all, the less they pay, the more we have to pay. Despite the many special tax breaks and loopholes the industry has won for itself—worth billions a year---it has been stubbornly secretive about its true tax situation. Drillers have never revealed how much they end up paying in taxes, and in 2017 they pulled out of an anti-corruption program they themselves had been boasting about because it would have required them to report publicly their taxes to the U.S. government.
So if Congress decides to risk the taxpayers’ money on this industry, they must insist that it come clean about its own taxes. And there’s an easy way to do it: Congress can just order the Securities and Exchange Commission to reinstate the payment reporting requirements for the oil, gas and mining industry the agency issued in 2016. Those requirements, mandated by the Dodd-Frank bill from the last financial crisis, simply say that all U.S.-listed extractives companies must report publicly every year their payments to governments, both here and overseas. The rule, known as Cardin-Lugar, was nullified in early 2017 by Congress, which relied on unfounded claims of high compliance costs and possible competitive harm. Those claims have been thoroughly debunked by the experience since then of hundreds of oil, gas and mining companies that are covered by similar anti-corruption regulations in Europe and Canada. The 2016 regulation has been thoroughly vetted by the SEC, so Congress can proceed right away to order it implemented. If legislators can attach strings to an airline rescue, they can do the same for the oil industry.
Moreover, reinstating this Dodd-Frank rule would be a win-win-win for America. It would level the playing field so U.S.-listed oil companies would play by the same rules as their foreign competitors, it would help stem the oil-fueled foreign corruption that causes instability overseas and threatens our own national security, and it would re-establish American leadership in the global anti-corruption effort.