Keep Student Loans Affordable Act of 2013--Motion to Proceed--Continued

Floor Speech

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Mr. CARDIN. Mr. President, I understand the Senator from New Hampshire is going to go next. I ask unanimous consent that the time until 5 p.m. be equally divided and controlled between the two leaders or their designees, that Senators be permitted to speak therein for up to 10 minutes each, and that any time in a quorum be equally divided between Democrats and Republicans.

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Mr. CARDIN. Mr. President, I take this time to speak on the floor of the Senate to express my disappointment in last week's district court decision on the Cardin-Lugar provision of the SEC rule. An amendment offered by Senator Lugar and me on the Dodd-Frank legislation imposed certain transparencies on extractive industries. It was a pretty simple position. It said that those companies that are registered on the SEC that are involved in extraction of minerals would be required to disclose on a project-by-project basis the details of those contracts.

We did that for many reasons. We did it because we thought transparency is right. We did it in order to deal with energy security so that we know the types of contracts that are being entered into. We did it so investors would have information in order to decide whether they wanted to invest in the stock.

The United States has been in the forefront of transparency, and this decision will delay implementation of a vital transparency rule that will shine much needed sunlight on information designed to protect investors and to promote U.S. energy security.

The Cardin-Lugar amendment and the SEC rule are critical to achieving important U.S. policy objectives. These objectives include protecting U.S. interests in both national and energy security. Why do I say that? Having transparency in what the extractive industries are doing makes it more likely we will have stable energy sources globally. Stable energy sources are critically important to our national security interests. These provisions are important for our national security.

It also ensures investors awareness and protection. If you are going to invest in a stock of an oil company or a mineral company, you have the right to know where they are doing business. You have the right to know what countries they are doing business in and the specific contracts they enter into so you can make the right decision as an investor. That is why the SEC rules make sense.

Lastly, it promotes America's core principles of transparency, integrity, and good governance worldwide. It is interesting that we sometimes talk about the mineral wealth of a country as being a resource curse. Although they have wealth, that wealth is taken by the elite of the country and used to finance corruption, which just adds to the misery of the people.

Some of the wealthiest nations that exist as far as minerals are concerned have some of the greatest poverty in the world. Well, the provision Senator Lugar and I coauthored was an attempt to deal with that and an attempt to deal with good governance. If we can trace the money, we have a better chance to end corruption, develop good governance, and stable regimes.

The district court's ruling of API v. SEC, which sends the rule back to the SEC, is disappointing. The rule is flawed because the court completely misread not only the statute but the clear congressional desire of the statute. The statute provision was for transparency, and yet the court's ruling strikes down the SEC rule which implements that transparency. The court spent a tremendous amount of time addressing the issue of public disclosure of company reports. The whole purpose of section 1504 was to provide transparency to investors and citizens about payments made to the government.

Why would Congress write a law to increase transparency for investors and then allow the SEC to keep the reports secret? Congress was clear in the letter and the spirit of the law that this information should be in the public domain.

On the issue of the host country exception, over the very lengthy comment period for the rule, the SEC was not presented with one concrete example from industry about a specific law or contract that would prohibit these types of disclosures. In fact, examples are to the contrary, including the fact that companies such as Norwegian oil giant Statoil regularly report their payments to countries such as Angola and China--where industry says prohibitions exist--yet that company had no negative repercussions. The API is trying to muddy the waters by having the SEC address problems that the industry has failed to prove exists.

The United States has been a leader on transparency in the extractive industries. It is the district court that has now put a hurdle on that transparency. The district court's decision is not only contrary to the law, it is contrary to what is happening globally today.

The EU has already enacted a law requiring the same payment disclosure that section 1504 requires on a project and company level without exceptions.

In a summit last month, the G8 issued a communique unequivocally backing mandatory disclosure. Canada said it will develop mandatory disclosures in 2 years. The Canadian mining industry endorsed that provision. Despite the oil industry's continued fight in the U.S. court, the overwhelming momentum is on the side of mandatory disclosure. Why? Because of national security. Why? Because investors have a right to know. Why? Because it is the right thing for good governance.

Despite this setback, let me make it clear: We will not give up. This law still stands, and the SEC has many options to appeal the decision or revise the rule. The SEC must make sure it finishes the job.

As Senator Levin, Senator Lugar, and I stated in our amicus brief in this case:

Resource companies can believe whatever they wish and make any communication they wish about their payments to foreign governments. ``The resource curse,'' or the benefit or costs of transparency; they have done so throughout this process. What resource companies may not do is impede the power of the legislative branch to require disclosure of objective information to fulfill compelling public policy objectives, including the strengthening of American national and energy security and investor protections.

That is exactly what that provision did. Congress exercised its right, as the
legislative branch, to require transparency for good public reasons. Members of Congress and the administration on a bipartisan basis have long supported transparency through comprehensive disclosure of payments made by resource companies. That support will continue as we work with the SEC to implement this important law.

I suggest the absence of a quorum.

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