AROUND THE BLOCK
News with a Twist*
Today in “Your Tax Dollars at Work”
South Dakota Ethics; Fossil
fuel regulations easing; Goldman-Sachs replacing Dodd-Frank
(Corinto, Nicaragua) In this edition of “Your Tax Dollars at Work”
we highlight some of the things your (mostly Republican) government officials
are doing to make America great again -- for elected officials, fossil fuel execs and the financial industry
South Dakota
South Dakota Republicans repealed a historic anti-corruption law approved by voters in a statewide referendum on Election Day.
The measure, which passed with more than 51% backing in November, would have created an independent ethics commission, limited lobbyist gifts to lawmakers, banned officials from joining lobbying firms for two years after leaving office and created so-called "Democracy vouchers" for registered voters to steer toward their preferred candidates.
State GOP lawmakers, who justified their action by saying they “didn't think voters knew what they were doing,” were so concerned that the Initiative would severely limit their ability to take money and gifts, pushed the bill using an "emergency" clause that allows for the reversal to take effect immediately and now prevents voters from initiating a new referendum campaign in response.
According to Republican state senator Sven “Coyote” Nygaard, “keeping this law on the books even one more day will have a significant impact on my disposable income. We just can’t let that happen.”
Fossil Fuel Regulation Easing - Coal
In one of its very first acts, Congress passed a law that would kill an obscure Obama-era regulation that restricts coal companies from dumping mining waste into streams and waterways.
After hearing of the repeal, Daile Rois, 56, who lives about 2,000 feet from a shuttered coal mine outside Charleston, W.Va. was devastated, saying, “Here in West Virginia, many creeks run orange” from the contamination.” She went on to say, “Of course I care about miners’ jobs, and I care about their safety. But orange is not the color of water.”
Fossil Fuel Regulation Easing - Oil
On the same day former ExxonMobil CEO Rex Tillerson officially became US Secretary of State, Congress welcomed him with a treat for his old company: Lawmakers voted to rescind a rule forcing US extraction firms to disclose their payments to foreign governments.
The Senate also moved to reverse a separate rule requiring publicly traded oil, gas and mineral companies to disclose payments to foreign governments for licenses or permits. The disclosure rule was aimed at curbing bribery and at helping resource-rich developing countries hold fossil-fuel companies, and their governments, accountable.
While pleas from campaigners for financial transparency in developing countries urged Congress to keep the rule went unanswered in Congress, the American Petroleum Institute, the oil industry lobbying group, said that by imposing tougher requirements than most other jurisdictions, the rule will put US-listed groups at a competitive disadvantage when trying to win contracts around the world.
The API did not comment on the fact that Britain and France have rules similar to one Congress is reversing.
A spokesman for the API went on to say, “Frankly, it is insulting to believe that anyone in our industry would make secret payments or resort to bribery to win business.”
Dodd-Frank becomes Goldman-Sachs
As President Trump’s plan to order a rollback of regulations governing the financial services industry and Wall Street under the Dodd-Frank law and beyond takes shape, Gary Cohn, White House Economic Council director, told the Wall Street Journal that the administration would also move against a regulation designed to force retirement advisers to work in the best interest of their clients. That “fiduciary rule” is set to take effect in April. Promulgated by the Department of Labor, itʼs meant to eliminate conflicts-of-interest among professionals dealing with people enrolled in qualified retirement plans and IRAs.
Conflicts of interests arise when brokers are, for example, getting commissions from mutual funds to steer investors their way, which may or may not be in the best interest of the consumer. Advocates of the rule describe it as a basic consumer protection to prevent brokers from taking advantage of vulnerable clients
As Kiplinger columnist Steven Goldberg described the rule, it would prohibit brokers from providing advice that lines their pockets instead of looking out for clients’ interests. Under the rule, for example, it would be difficult for a broker to justify selling a client a high-fee mutual fund when an identical or similar fund is available at a much lower price.
Cohn told the Journal that the rule is “bad” in part because it forces consumers into funds with lower fees even if they are not the best investments for them. Whether Cohn’s interpretation of the effects of the rule is true or not, he did not address the inherent conflict of interest the rule is meant to eliminate, but did go on to say, “Frankly, it is insulting to believe that anyone in our industry would give investment advice that ‘would line our pockets instead of looking out for the clients’ interests."
Cohn, of course, is the former president of Goldman Sachs.
*(Note: This post is more of a hybrid News with a Twist than usual. For sake of clarity:
- The South Dakota repeal of the anti-corruption law is real; Sven "Coyote" Nygaard is made up -- although I cannot confirm that a South Dakota GOP legislator did not say or think what I have Nygaard saying;
- The law killing the "Stream Protection Rule" which will allow dumping of coal-mining waste into streams is real, as is Daile Rois, who did point out that "orange is not the color of water;"
- The vote to rescind the rule forcing US extraction firms to disclose their payments to foreign governments is real. The API's comment that the rule will put US-listed groups at a competitive disadvantage when trying to win contracts around the world is also real. The statement from the insulted API spokesman is made up;
- The entire Dodd-Frank/Goldman-Sachs story is real except for the insulted Gary Cohn statement.
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