Sens. Lugar, Cardin 
join lawsuit to defend 
SEC disclosure rule

Sens. Dick Lugar (R-Ind.) and Ben Cardin (D-Md.) are jumping into litigation to defend a provision they inserted in the 2010 Dodd-Frank law that forces oil and mining companies to disclose payments to foreign governments.

The pair petitioned a federal appeals court to file an amicus brief on behalf of the Securities and Exchange Commission, which issued in final rules in August to implement the Dodd-Frank provision.

Oil industry groups, the U.S. Chamber of Commerce and the National Foreign Trade Council sued the SEC in October to overturn the regulation that they call economically burdensome.

The senators’ Dec. 19 notice that they intend file a friend-of-the-court brief signals that Lugar, the top Republican on the Foreign Relations Committee, will continue advocating for the rule even after his departure from Congress next year.

Lugar is leaving the Senate after losing his Republican primary to
Indiana State Treasurer Richard Mourdock, who ran to Lugar’s right and
then lost in the general election to Rep. Joe Donnelly (D-Ind.).

Lugar is joining the University of Indianapolis as a distinguished professor in the university’s Department of History and Political Science.

{mosads}The disclosure rule forces SEC-listed oil, natural-gas and mining companies to reveal payments to governments (including the U.S.) related to projects in their countries, such as money for production licenses, taxes, royalties and other aspects of energy and mineral projects.

It’s aimed at increasing transparency to help undo the so-called “resource curse,” in which some impoverished countries in Africa and elsewhere are plagued by high levels of corruption and conflict alongside their energy and mineral wealth.

Several anti-poverty and human-rights groups — not to mention U2 frontman Bono and billionaire philanthropist George Soros — have championed the rule.

But business groups allege the rule will impose major costs, and put SEC-listed companies at disadvantage when competing for contracts overseas against state-owned Russian and Chinese energy producers that don’t face the disclosure mandate.

The groups’ lawsuit allege that the SEC’s economic analysis underlying the rule is badly flawed and that regulators abused their discretion by failing to allow exemptions if foreign governments bar the disclosure, among other claims.

The suit also alleges that the mandated disclosure violates the First Amendment by “compelling U.S. companies to engage in costly speech on controversial matters in order to influence political affairs in other nations,” according to a court filing with the U.S. Court of Appeals for the District of Columbia Circuit.