Transcripts For CSPAN2 Forum Focuses On Ending Oil Corruption 20170809

For international peace. We are trying to show you as much as we can before things get started. [inaudible conversations] [inaudible conversations] ladies and gentlemen, thank you very much for coming. First of all we are into the season where the city tends to empty out, so we are all delighted that you are here to discuss a problem that, you know, is arguably as important in the us as it is around the world where we will focus on it. Lets me briefly introduce myself and who will be conversing with today. Im sarah cheneys. Simon is going to kick us off, simon taylor who is one of the founders of Global Witness, which is in my view one of the most innovative and effective organizations working in the space around the world and its very interestingly combined with advocacy with extremelyadvo regressed investigations and thats one of the things we will talk about today is a recent report by Global Witness about shells activities in nigeria. He also helped galvanize the coalition of Civil Society organization, 40 Countries Worldwide working for more accountability and openness in the sector. Is called publish what you pay. Sitting next to simon is steep call who is the dean of Columbia Journalism School and so has a whole other dimension in the current political space and he also, i mean, has one no less than two pulitzer prizes. The first one for reporting on the security and change commission which again has real relevance here and hes also the Office Author of private empire, which i recommend to all of you when youre done with this go out and buy private empire and it tells you a lot, not just about the industry, but also about quite an important element of us politics at the moment and we have a member of that human and Environmental Development agenda and i just love that. Like, lets put those two together, human and Environmental Development sidebyside. He is an expert on the oil sector in nigeria and participated in this investigation as well as some others. So, thank you again. D join lets come over here and join the conversation. Ust ask your forgiveness. While i do this. Askingjust start, by about this. It and what caused you at Global Witness to feel like this was such a critical subject to investigate . That is a good question. It is not just they who knew. Other people knew. Perhaps i can start with some boring stats that i think say quite a lot. Many of you would be familiar with the oecd Antibribery Convention from 1999. 14 in 2014 they did a study of some 400 Corruption Cases which looked at the period of the operation of the convention. Foley twothirds of the cases they looked at involved just for sectors. Guess what . The one that was, featured the most time was the sector with 19 of the cases. Most of these involved public procurement, and also included players who were from wealthy countries. I think we can say quite a lot about that. Ive spent i guess Something Like the less 20th looking at corruption in the gas and mining sector. Every way we look in certain regions i no longer ask where is the corruption. Its more which concession is not corrupt. I think thats a very true situation. W on top of that i would say there certain members of the oil industry who i view now as serial corrupt because everywhere we find that they been involved in corrupt deals. So thats the them thing i woule to set. One of the things weve been doing in this past 20 year time has been on the one hand, understand how corruption works and then look at policy prescriptions that might come to play along with otherrdoing prescriptions, because were not just talking about the oil industry. We are talking about how banks operate, how monies flow internationally if we can come back to that in the discussion about solutions a bit later. But actually to understand the different mechanisms of corruption got to investigate and thats where this comes along. This is merely the latest development in our work on this case study in nigeria called to 45. It is west africas largest oil block and the history, i wont go beyond high level detail, but essentially it boils down to a a deal that was concluded in aprie world secondbiggest oil company in the u. S. And the uk and the netherlands, together with its partner which is italys Largest Corporation acquired to 45. The problem is they had spent two years directly negotiating with the person who owned it which was none other than former nudging dictator in april 90 april 1998 someone set up a Shell Company called malibu, basically a piece with othersgether sort of acretary was lawyer in a backstreet office, for those of you who know the breaking bad theory. That is what we were involved with. Investmentiondollar going to bed with a piece of paper. No skill set, no knowledge, no backup. They mustve known this was a stolen piece of real estate. Battleslitigation happened. Malibu lost the block. Show built it. Various litigation processes. Then we realized in the beginning there was a twoyear time with delightful court cases. One particularly noticeable is one where a former miasix wascial helping them and saido some people it was difficult to come to an arrangement where they would be happy with the amount but we are getting on much better. Effort they went through collapsed. But then that general who also happen to be a lawyer rocard the deal. Billion dollars through nasco arrangement in london run by jp morgan and the money filtered off into Shell Companies in nigeria. Where did it go . This is interesting because we required intel emails which showed the highest levels in the company were in the loop. Go onnew the money would to the highest level officials yet they went on with the details anyway. Stolen goods, they did not pay the Nigerian Government and they are now being investigated in criminal investigations throughout the countries. Reinforce something. So, you have got all of this shell with the shell arrangements, right . But, what is it that they are circumventing . In other words, theres a fairly clear nigerian law, correct . Theres multiple laws. It was illegal for him to give himself as minister nigerias biggest offshore block. Shell could not not know who he was. They got within four years. The. As though he were the private owner . Right. Than the parent structure went after an arrangement in london. We consider that to have been a because,e creation should they pay as required through the federation accounts. The money that was going into the whole of government wouldve had to be expropriated by the official process. It couldve no longer been used to pay people. That had to create an offshore system. Toi think that is the way, belabor the obvious here, with this whole thing is about is tell me if i have this right you have Nigerian Government people assets which by nigerian law, the payment for it needs to go into the federation account, which is like the federal budget, right . And they directed that payment not to go into it. That structure was created by the way in which the bill was constructed. The mechanism was created to bypass. The money was considered to be an off the back of the truck prize. So there is a question they are. This is an english expression. I apologize for that. A Bargain Basement price . Towhy would anyone want bargain a cell of price . Well, one of the things we see from in these emails is that there was a highest level discussion with an shell about how they knew there was a high likelihood the money would go on to various undetermined mechanisms to highest level officials, including johnson, who is specifically mentioned. So we have an internal discussions at high levels and they went ahead anyway. Shell shell is talking to about the fact that rather than by this asset from the nigerian people, they were going to buy it as so it were the personal property of this little Shell Company. And, by calling it the personal property of these three guys, they were able to get it wicked cheap whereas if they had had to buy it from the nigerian people, presumably the Nigerian Government would have negotiated. If it were a government acting on the behalf of its people, if it were that type of government, it wouldve put the screws into get a much higher price. It you would expect it wouldve looked after the interests of its people and sold it for the best price they could get it for. And, there are many other aspects of this that are very complicated to discuss, but in the actualy saw that someonef the asset was else. But they went through the process of trying to buy direct from malibu. Having negotiated for nearly two years and ended up concluding the detail brokered by the attorney general who used to be a lawyer. And, the arrangement they created was this offshore structure. This was not an arrangement the attorney general constructed. Designedan arrangement by the company. You been looking at well i has have Global Witness. I just wonder if you can place this story in, you know, again, you can place the story look at this in a number of other countries. Is this an aberration . Is it relatively typical . What are we dealing with in this sector . Its a fascinating case and it sounds like it will go on for a while. We will probably learn more as investigations by judicial authorities proceed. Yes, it is part of a much larger picture, as simon alluded to. Thought i would mention a couple of points of context, may, for my own reporting. Sarah was kind enough to mention private empire, its a book about exxon mobil and american foreignpolicy was the idea. I started out just to write about the geopolitics of oil in the age of constraints, the age of Climate Change, the age of increased competition, and i got out and did research and thought, i dont have a story here. I had no idea what i was getting into. I chose exxon mobil. It seemed like a good subject at the time, and so then i made a map of where exxon mobil produced its oil. I was interested in the distortions created by wealthy, Global Corporations extracting oil in very, very poor societies. Not even just developing societies. But the poorest. One of the examples was chad. They had been there, trying to develop some rather difficult landlocked oil that had difficult geological characteristics, was a long way from the ocean. Nigerias recurring scene of these kinds of crimes because nigerian oil is very appealing, its right near the ocean, its very easy to get to market, its sweet crude, and it produces well. But chads oil is difficult oil. And, chad is a very poor society, very unstable, subject coup attempts repeatedly. I flew in and i was starting to report, i drove down to the oil area, talked to people who live down there, people who worked on , governmentmpound officials, Civil Society activists. After a couple weeks i looked around and said, why is exxon mobil here . What are they doing here . I mean, they are producing a few hundred thousand barrels of oil a day in a consortium, that this is really difficult territory. Its politically unstable. Why is it necessary to be here doing this business . Theres an interesting, important answer. One of the dilemmas, at least until the shale revolution, Big Oil Companies phase was that faced is that they were producing more oil every year then they were finding. They had run out of easy oil, basically. They had run out of domestic oil, they had run out of simple oil to produce, and so they were going further and further into difficult frontiers, both difficult production frontiers like the arctic, where there were high risks, and difficult engineering challenges, but also difficult clinical frontiers. Political frontiers. Because they just needed the oil. Because every 200,000 barrels a day counted trade that was the answer as to why they were in chad. That is also why they were in which oil ginny and in other places were no reasonable company would want to do business, to be honest. In equatorial guinuea and also in other places. In places where no reasonable company would want to do business, to be hone its about proving to your shareholders, right . That for every barrel of oil you sell, you found a new one. Because who would want to buy shares in a supermarket that only has as much milk as is on the shelf . Is at the right way . That pressure was especially strong about the time that i was working on this book but yes,rs thats it. Barrel of oil you sell, you found a new one. Because who would want to buy shares in a supermarket that only has as much milk is on teh shelf. That pressure was especially strong around the time i was working on this, but yes. Thats it. The other thing you have to understand, and im sure you run into this, and it is putting bribery cases like involving shell, and maybe more shell than any into it, into a larger context, if you look at a list of the 20 largest Oil Companies in the world, 18 of them are state owned. Owned by russian entities, by china, by india. Its an exception, exxon mobil, to be fully privately controlled to the extent that you consider exxon mobil independent of the United States, they see themselves as independent of the United States. What interesting about what simon and folks do, and we will get to this in the solutions part, the very fact that these companies are accountable to stakeholders other than governments that own them actually creates a point of leverage. They have different vulnerabilities, there have shareholders, securities and Exchange Commission, Civil Society groups they meet with, whereas rosner doesnt feel those pressures. Its a complicated structure to think about trying to change because you have all these privately Held Companies that feel, why are we the guinea pigs for a global government system that doesnt touch our state owned competitors. It also means theres probably quite a lot of these transactions. Summary even worse that we cannot access despite the best investigators in the world. I would say the u. S. , the last point i wanted to make by way of context is that i think its important to say out loud that this administration, unlike the last republican administration, is actively departing from transparency as a solution to corruption in the extracted administration. The Extractive Industries Transparency Initiative which we will talk about later which isus by no means a magic bullet but it is part of a suite of transparency efforts that were developed in the early 2000s with the support of the bush administration, and that the Trump Administration has come in and basically, one of its first acts of rolling back obama era rules pulled the plug on transparency requirement that the securities and Exchange Commission was meant to bring forward and has been signaling that theyre going to withdraw the United States from participation in the iti, and even more advanced form of participation developed during the obama administration. D and n signaling they are going to withdraw the United States from participation in the iti and even more advanced forms of participation than developed under the obama administration. And we will get to this. I was writing something yesterday about journalism in these times. One of the things that occurred to me, piecing through some details and this isnt surprising, maybe not that interesting. I think of the practical matter, all these rights and norms are intertwined. We tend to take them on in silos, whats happening to environmental regulation, whats happening to pressure attacks on professional journalism, whats happening to transparency. Whats happening to Civil Society, not just in this country, but in lots of other places. If you look back to the pressures on Civil Society groups like Global Witness over the last 10 years, globally, and the space in which groups like that operate, it has been narrowing quite steadily. And now it has just pivoted off a cliff. When we talk about corruption and strategies to combat it, and the extractives, looking at the next 3 or 4 years, you have to place the question in context of a general repudiation by the United States government of a whole series of comparable to transparency. This is a real departure, a departure, just to put a punctuation mark on it, its a departure from the republican partys conspiracy. We are to circle back on a number of these points. Youve done some work on mobile exxon mobil in nigeria, havent you . What have you been working on . Its important to detain in which the oil industry thats what i wanted to get that. Youre on the receiving end of a lot of these practices. Tell us what it feels like to be working with people who are on the ground where this extraction is taking place. I get a little bit worried, listening to the United States is actually pushing around the area of transparency and accountability. Coming from a background where you have seen the capacity of very key sectors, operating a colony operating like a criminal enterprise, thats majorly about the key 5 Oil Companies operated around the world, sometimes nondeclaration of the leasing of this oil. This is a country where it is possible for 200,000 barrels of crude oil to disappear on a daily basis, either to the sea or the port. What does that look like . Can you help us picture, imagine what does it look like on the ground, and how is it possible for 200,000 barrels of oil just to walk away . It is so possible. We also need to understand is how you would also link with chevron in chad, what is the connection . And, the level of corruption with countries, you would see the recent report showing nigeria, south africa, one of the leading countries actually affected within african culture. It is not only about those and the level of corruption or with countries. You would see the recent report was showing nigeria, south africa as one of the leading countries with direct investment actually fit within africanso tc culture. It is not only about those countries on the ground or characters. Its about also the conspiracy that involves not only direct content by including the banks. It includes, even sometimes the embassies. And it is as possible that at the port of philadelphia in the United States alone, within that period of 20112014, crude oil was about 12 billion. Actually was underreported or none reported more from nigeria to the port of philadelphia, just within that period of time. It is also possible because it is first a challenging situation. The pumps in meters were not only managed by the Oil Companies, maintained by the Oil Companies and records are kept by the Oil Companies. So the oil managing company in nigeria, already crept from officials, only reported by the Oil Companies. It was at a period in the history of nigeria where we have had the worst in the most kleptocratic government within the leadership of that country, within the period of 2011 and early part of 2015. It is not just about, now it is back in nigeria. Its most about the criminals mood. Working with companies that cause international organizations. Thats also assists these characters to get on behalf of the deals with many of the companies, and declare nothing many times to the country. That is why you could say assets and properties scattered all over the western world. And at the expense of what you have in the consequences, the global terrorist and you see is at the function of the private nation of many of those proceeds of the National Resources that are meant to provide education to those people. The migration that you see in the desert are consequences of, the immigration that you see in the u. S. , consequences are someo of the things that are reported on databases are part of the consequences you get to read on the pages. Hat yo it is moving the on that. I was watching the film about Bernard Madoff and how the innocent children who are actually aware of their father, at the time the bubble burst theres no do what they were innocent. You saw the circumstances. One committed suicide. The other died of cancer. The failure of citizens from here to actually take actions against the Oil Companies and also the government of israel are some of the consequences that are predictable for many. So i want to pick up on three things just in the last sequence that i just want to see if we can try phone a little further. One was, you said assets scattered all over the place. You just went on a tour in london, right . Can you explain, what were you looking at in london . I think, i have a partner in crime here, with whom we did that trip in the uk. For us i should set down with when you look at the process, so you can get us some of those monies and properties that we went looking for in people dont know what you are looking for. Can i just ask you, lets just spell it out. What were you looking at . The department of justice in the u. S. Actually filed charges against the former oil ministry in nigeria. Former oil minister in nigeria. What would you looking at in london . We were looking at our properties. So when you listen to that, you understand how the actually getu those monies at the detriment of the country and the people. Exxon mobil renewed its license, the Oil Mining License in 2007 th072009. The committee settled by the Nigerian Government to be evaluate those oil licenses, 67, 68 and 70. Put the cost for exxon mobil to pay at about 3. 9 billion. Exxon mobil said no, this is too much, we cant pay this. The Chinese Company said we would be willing to pay 3. 85 billion for those oil license. Of course exxon operated the license for like 50 years and it was time for renewal. There was negotiation and that was the view of the value of those properties, 3. 9 billion for exxon mobil, to 2. 85 billion. If exxon is just going to pay off and without any other commitment. But it exxon mobil is going to build a refiner for nigeria then they can pay 1. 8 billion. Between exxon mobil, that was at a position when we had the president , and that was the position. That was the position. When he died, when jonathan came into office. Past president of nigeria, goodluck jonathan. Exxon mobil only 600 million. He wasnt the one who signed the deal. Sorry, people dont know all of these names. Hes talking about jonathans oil minister. Precisely. When she came, she granted press an interview, a report said, this is a dodgy deal. This is against the interest of nigeria. Deals must be counseled and we are going to do that. So i know that when, weve g got exxonmobil walked away licenses. According 3. 6 billion dollars just because of 680 million dollars. So those are places and views through which many of these get access to these corrupt money, illicit money and money to which they affect all the international markets. And let me bring that back. So youve got an extra 2 billion plus that is lost to the people of nigeria. Theres money going into pockets that are buying a bunch of nice houses in london that you went and looked at. And its so interesting the way you drew together the impacts on the involvement of and impacts on our country, the u. K. , the u. S. , the netherlands. Number one, coconspirators, number one. Number two, a lot of nice houses bought on our property markets. But then, number three, the violence, right, so i also looked at how this kind of corruption helped drive people into the arms of boca haram or insurgencies in the delta area and the flows of migration that our answer is, oh, lets right, lets build a wall of one kind or another and i think youre suggesting theres a connection, right, between this type of activity and people leaving home crossing the desert and crossing the sea. Is that what youre saying . Precisely. Lets think about, you know, and steve started this conversation on what do we do about this in the current context. Why dont you guys, again, in order, but interrupt each other. Let me say one thing about violence before we change. You brought that up. I dont know if youve been to Equatorial Guinea. Im a person nongrata there. I went once. Thats probably if youre doing honest work as many times as you can go, but so Equatorial Guinea is a small country, used to be a spanish colony and the capital is on an island and exxonmobil inherited a project, i guess that mobile originally developed there and by the time i went around in 2011 or so, they were producing about 500,000 barrels of oil today. You can do the math as to what that basically all controlled by one family. And you talk about how this kind of disportion induces violence. You walk around the island and basically what it looked like is a giant bank waiting to be robbed by someone who can take over the palace because if you can control the flow of oil production, the royalties that came to the government for three days, you could fund a Swiss Bank Account that could keep your family wealthy for four generations so its basically induced all the speed boat attackers to come over from neighboring countries, cameroon or nigeria and they would fly into the shores, jump off their boats and run shooting at the palace to try to take it over. Even if the coup lasted three weeks, they were rich. The government of equatorial new guinea because it was a cle kleptocracy, they didnt have a lot of loyal. Having a bank guard was difficult. They had the morrocan guard force basically controlling the president ial palace and people coming at it basically every six weeks, with armed speed boats. It was other worldly. You can see this in a political sense, the much larger inability incented by this, this was the almost Cartoon Version that ive seen. And what you have in nigeria, the previous regime. It was free sale. In fact, one of the leaders, militants, came openly to tell the world, it was not anything serious. They have the oil, they sell it. They buy with the profits and exchange oil sorry . And so its also the rule of law. It creates the political insecurity that you have in many of these countries because the proceeds of the sale of these Natural Resources, rather than like you said, go in through the proper constitutional legal channels, a and theyre paid to war lords, paid to these, all it wasnt good things. And the access on wealth and all theyd do create the security that you have around. So, its not thats from some of these countries. One other short point that his comments brought, theres a reason why oil is particularly figured in this kind of cash corruption, because the oil market is liquid and so easy to make cash sales without accountability. So its literally a liquid market. Once you get that ship out. You can start selling on the stock market and no one would ever no about the fullness of the transaction. Say, take, natural gas youve got a build a pipeline between you and the can customer. You cant just take 200,000 barrels and sell it in the cash market. Its Something Like diamonds. Something to smuggle, but in a very big many context. Simon. And i would return to that a little bit. We were approached. Im trying to think of the date, sometime during the emancipation and the insurgency. And at that stage the bunkering, the term in nigeria for stealing wholesale large oil was quite substantial. And people were particularly in the military and come and mysteriously look the other way. And they were like it was very small. Very small loads. Yeah, yeah. And its still that far out. And anyway we were approached by a consultant at the time who went to work to try to solve some peace issues or lack of peace issues, shall we say. And bha he was putting forward. He had seen a press around fingerprinting oil. There was Technological Lab done sufficiently good to pinpoint to the field and in some cases to the wellhead where it had come from. I was as a failed biologist, but to appreciate the significance of that, i would imagine once you start to look at different sources you could blend innings from different countries, but one they think that was interesting to me is when a particular equipment went there, it was a shipment by somebody affiliated by them, it didnt have a contract. So the administration said, well, fine, well sink the next ship unless you cough up. So they cut out the middle people and ended up, if you like, legalizing this. Im really interested in what you think at the time, the big corner wasnt the refineries. It was what was going into texas ports and also into rotterdam. Rotterdam is the spot. Yeah, and it struck me, but there are ways where they come from and there are people who absolutely know where the ships come from along the way and seems to me where you have discrepancy between what is going in and out, you have a problem and i think the countries on the receiving end do more to freeze assets, funds, you can explain why there is a discrepancy then youve lost the assets, simple as that. So that has pivoted us to one thing we could do. Even ahead or even separate from the companies themselves publishing with theyre paying. Youre saying at the port, a ship comes in, documentation, with are did it could many from. Coming in with a car ferry of ferraris and theyre saying where did that come from . And i shouldnt be surprised that they would be impounded. Why should i bring in a super tanker and thats fine, i dont get it. There is, in the oil markets and this gets into the kind of belly of the paste. Theres a distekt between the trade and the economy. I think your point is right. If theres a will, weve demonstrated in Financial Transactions if you place the highest responsibilities on financial transaction to know the source of the fund, to be liable for penalties if they allow transactions from dubious or unknown sources, you cannot create a perfect system, but a much, much tighter system and then the workaround the engaged activities. I would think in the commodity marks. And real estate government. Global has again gotten in the first round in comparison for a financial transaction. In the u. S. Theres suspicious activity reporting. So if youre a clerk at a bank, and the customer walks in with 7,000 of cash every thursday and you dont know where that money is coming from, the way the u. S. System works and the penalties that flow down to banks mean that the lawyers going to tell you as a clerk, better file a suspicious activity report. If that person doesnt have a fruit sand or some or thing. It goes to the treasury, it didnt mean that a case has started, but the threshold for banks for filing suspicious reports are he willtively low. But in the u. S. , what injury is except for filing suspicious activity reports . Oil. Depends who the clients are. Real estate. Is that relevant in the current political shooting . Essentially if youre a real estate broker, you have no obligation if someone shows up with an llc and a truck full of dolls and says i want to buy an apartment in famous mans condo building. And so there are these huge gaps in Global Governance around these transactions. I think that oil is in between. Because you have a lot of eu, but then you have the giant stock market thats fluid and not accountable in the same way. And what would you like to see in terms of an activity and behavior that youre telling us about, what would it be . International and sure, lets do one international and one local. I think it would be the sincerity on the part of the community in dealing with transactions and businesses are concerning many of our countries. Those i mentioned is not hidden, its not a blackmarket transaction. Its to the extent many of the ships like you said fracture from the water and every that is done its issued to them. So theres a need to check what exactly was at the point of orbegin and now declared. The world that i mentioned, what about 12 billion coming into part of here alone and china and calculated the gap between the nigeria and and the po port. And that took for three years. Amounts to 12 billionment so its not a small amount, aj some of these are illicit type of Natural Resources coming into and also, many describe issu issues. I still have that access to many in the western world. Whereas citizens are not granted visa because they probably cant meet criteria. Theyre still allowed into many of the countries with the money that comes in the system and polluted the system and i think its important that this is actually by the countries to the extent that you dont provide safety net and save for many criminals to run into. And the officials at the local levels cannot be, also, confined to the transactions. You have implication for not only your country, with the kind of characters that come to your country, but to the safety and security of your citizens that are in this country. I can tell you for an outreach, nigeria, you know, you talk about exxonmobil series and talking about the company. Maybe its connected to americans. So if you talk about sales, they can tell to connect the company to the reputation of the country. And also the citizens of the country. And the population, right. So its very important that we also start the viewing on the country to can i check in . Because i think part of getting to that space requires that justice is done and i want some p pro theres more than the business consequence. You mentioned, and if anyone actually knows about this. In this case, you spent five years investigating this and weve filed complaints in six jurisdictions. Sure, there are proceeds going by and well see where the judicial authorities get to and lets hope that things can go forward. But, you know, i cant really tell you more than that because i think its down to system to approving that. Lets go to the h schsbc cases. And then senator carl levins investigation into the mexico operations, was the bulk of habc, and there were windows in the branches in mexico, in which drug cartel money was being paid in extra large suitcases, so you can imagine. [laughter] they need to get bigger suitcases through the window so he was personally informed about this, nothing happened. You look at end consequence, 1. 9 billion fine if i remember correctly. If you divide this by ten years of criminal activity, because there were other crimes as well. 23 days profit and nobody goes to jail. Now the boss of hsbc, the worst that happened he spent the day harass by channel 4 news and to answer the questions. And his answer to scuttle down. And im nod interested im not interested in putting them in jail. And 50,000 people were killed in the confrontation between two men and government. I think theres a complis ci city and to bring it back to this study. Both were subject to a third prosecution agreement for previous Corruption Cases in nigeria while stand most senior amongment or the net cut deal. I went to the show when the previous boss, previously was still in power and he spent a whole ten minute period boasted about the processes and thats great, checks and balances and he was chair of the committee that ran it. While he set this up and he was in charge. He was involved, he knew. What is that about . Where is the consequence . Pay the fine and thats the end of it. If i may open up. We do want to talk a little about the domestics that allows this. And i might ask you in that before we get there yeah why. Part of the solutions, simon youve been doing in for a long time. If you want to struggle against it effectively because thur never iffing to and if youre going to be effective you have to have the strategy. You can evaluate the effectiveness or the relative value of different attempts, you know, whether there are institutions like iti or tactics like the Justice Department and bringing complaints. Big picture after all of this, when you think about the role of Civil Society groups, think about the role of local citizens developing their own campaigns for transparency on behalf of their own citizens and you think about the Transparency Initiatives that are a multistake holder and you think about government prosecutions and going to jail. Consequences. What do you think has over time that you would make thats the most effective strategy and the others. What is the area that time and again actually moves the needle . My answer is there is no singular. I think we need transparency. As the revenue flows i think we need to see the revenue levels. And shell, this was the eus answer to the doddfrank move that you mentioned earlier. They wanted to have project level closure. When you have a singular big you cant say anything. Its completely irrelevant data. We can work that out on the back of a cigarette pack, crude calculations. You need to have granularity, you need consequence, bugetary oversight in terms of being in the country and outside, need to look at the whole of banks and backup loans and the move through the banks in london, they would raise billions and then loot it. There was nothing over that. You need banks to know who the customers are, how often if we sat sate they know that the systems are not operational. We need this as a whole. But i think what steve was getting at is have you, in your efforts to push on some of the levers, have you seen one thats actually provoked a reaction from the industry . Is that what you were kind of a little bit. What makes people the most responsive. Jail, i suppose. And typically, im going to say that i think that the fact, the institute and and and how to bring it lot of t tht from Global Witness, i saw her gesturing, trying to send the word. Before you jumped in there thats exactly where i was going with this. But i, you know, i dont think that the loans are enough. We need the consortium of things. To disclosure. There are rules by the scc that would require disclosure. Weve seen from the Industry Fund why its too defensive, it doesnt work, a raft of different xusituations. The second thing that justified the second rule is incredibly large. And we end up with a rule that does in parallel to what the europeans have done, to what the canadians have done, theres a Noble Movement out there creating transparency around a sufficient granularity of the payments. And what have they got a hide . Is it that they think such disclosure will show them involvement in corrupt countries. My earlier point when i was talking about the countries where my supposition for 20 years, to show me it isnt corrupt as opposed to the other way around or is it they wish to carry on that environment. And the first rule of the 1504 provision, in the time frame that the sec was we know its politically unable at the time. But to have the provision before its done. It would have been completed roughly before this was constructed. And do you think they would have paid a a billion dollar fine. I think they would have come up with a very different construction and what they should have done, the guy who stole it. Put it up for auction and we will bid. They didnt do that and they knew it would be covered up. Thats their mistakes. The middle guys got ripped off and disclosed the whole thing. Thats the environment were in and try to change and we have to look at reasons why the Congress Took down the second rule which would fit the purpose and all about u. S. Leadership in this arena. What happens and why . And the arguments do not back up. Id like finally it turn to you folks, please, there will be people bringing you microphones. This is being broadcast on cspan so we need you to wait for the microphone and we also need you to identify yourself. And i see frank back there. Im not going to you first, as you know. Im going right here. Please, articulate as clearly as you can. The discussion here constantly mentioning exxonmobil. The question is we have a secretary of state who was a chairman of exxonmobil. Is there some lack of transparency there, something we dont know, the atmosphere in washington that speaks to investigating mr. Tillerson or others like him . Thank you. Are we doing one at a time . Why dont we take a couple. Right here, sir, also in front and then well go back. I believe when chad began producing oil. The money was placed in a trust fund and the government of chad had to request money from it to justify what they were going to do with it. How did that work out . And one more looking further back. Okay, frank, go to frank vogel right here in the middle of the ais aisle, yes. Good afternoon, a great discussion. My name is frank vogel and im associated with transparency. And i think its remarkable that the Justice Department on the 14th of july announce ner going on a civil forfeit tour complaint against two nigerian businessmen in the country at manhattan and a 80 million yacht and announced at the same time the business had paid many millions to buy real estate. And the interesting thing is the substantial increase in fbi interest in going for civil forfeiture. Tracing the money to the u. S. And then going after the money here as a way of expressing the flames, when youre at the corporation. I think thats a change, but my question to you is i have a sense, maybe im wrong, that many of us in this area so cuss too much on corporations and private sector and not enough on states. Whether its petrobras and others, the scale of their engagement with corruption seems to me to be absolutely massive and we havent done nearly enough to focus on the solution. Id be very interested in your comments on that. I think the scale of money that we are talking about dwarfs the price paid by shell and exxon, however large they are. Okay, you guys want to field these three . Sure, ill take the second question first, theres a couple of chapters in this book. And there was a contact involving the world bank and i think citi bank in london and c consortium members, the route payments through a kind of trust fund that would be al evaluated to ministries for social, education, public, health. Long story short the compact broke down under pressures of violence when the government there was a tax from sudan. He felt that, you know, he had an existential crisis and he was at that point receiving millions in royalties. But he didnt have the letter that he had to begin this. What is striking about this period, a snapshot of what these feel like, even apart from legal corruption. At the time he needed to get out of the box hed put himself in. U. S. Embassy in the capital probably allocated through different departments probably 10 million in aid to the country of chad. One of the poorest in the world. Bottom of the Human Development index tables. About 10 million a year is what the u. S. Government spent in chad. Exxonmobil cut a check 600 million with the governments. If youre debby and you wonder whats the power of your country. Its not the marine or se its the private company that writes you a check nor 600 million a year and thats how you get pout of a compact that involves a relatively weak institution like the world bank, essentially. This is an important point to bear in mind. I lived in afghanistan and i wasnt impressed with president karzai for a have a right of reasons. I thought, boy, if youre president karzai and youre getting 18 different signals from the United States of america. If youre president karzai, youve got to pick into who is it that speaks for the United States of america and these guys will make those decisions on the basis of calculations like that. Its a really, really important factor to bear in mind. Do you want to talk to the tillerson question . Well, hes also a subject ever the book so i would direct you there. I think, you know, he had a long career in russia on the upstream side of the business and im curious about, there is there are two chapters of his history of the chief executive that we dont know as much about now as we will, probably eventually. One involves in the Trump Administrations Treasury Department entered into against exxonmobil that exxonmobil decided to litigate again. Whatever the back story is that this involves a story of willful, and its a substantial Frame Work Agreement and actual production agreements in russia. The fact that exxonmobil chose litigate, a lot of information is going to come out in the course of the litigation as a back story, as i am i concerned. The second thing is the long tangled hit of exxonmobil and Climate Change and campaigns led by nonscientists to call into question the science around the early 2000s and now, theres litigation that popped up here and there in way there seems to have been a whole series of back channel emails in between the chief executive and others, and not quite clear, that didnt come out in the initial discovered, but which now have been discovered and the what the content of those emails are and whether theyre relevant to some of the cases, is something i had id like to watch. Id like to come into here, theres a conceptual thats of grave concern. Ive looked at how klep kleptocracies are structured. Its an integrated network in which public and private sectors come to either overlap where youve got the identical People Holding positions in these ostensibly separate sectors or theyre proxies or services of changes. A quid pro quo that puts them together. Am i look at the United States . Theres a degree of overlap, of functional everlap between the top reaches of a very tight group. Its not, you know, this is not the shumaker or the baker, the current president of last has has brought in these, were not talking the local shoemaker, were talking about a private element. And back on that, one of the things apparent in recent years, somebody alluded to this earlier in the conversation, about how about exxon and chevron in particular, have been very reluctant to state in the process. So much so were now in an interesting moment, will the u. S. Fail validation . Our supposition is theres no interest. Whose fault is that . Theres a history of opposition between those counts. One is to its the first country without the bajan. Unlike in nigeria there was projects of a sort, the whole inning, this was meaningless, inadequacy of the standard at the time which has been tightened up. I come to the point that theres a significant history and opposition particularly from exxon to the conclusion of doddfrank 1504. And my impression from my source is that tillerson himself was radically opposed to 1504 coming into play and, in fact, being implemented and i think its very use of the cra resolution. Cra. Congressional review act. Taking down the rule the first one a legal process, you know, ended up with the first rule credit by the sec as far as the process. Theyve opened up to a Public Record program and and i think if they tried to litigate that and never say never, but if they tried to litigate that because of continuing opposition there would have been a serious fight and i dont think they necessarily would have thought they could win in the first way on the first time. The evidence supported it. What do they do . They have thois in congress to take it beg down. From a Democratic State coming for a long time its one of most shameful act of a democratic process i think ive ever seen because the arguments put forward to take it down, they are the arguments that they used and failed through the years of doddfrank in the first place, which were thrown out. They are destroyed and the debate that happened wasnt to debate, the opposition says these didnt count, a rendition of the American Petroleum institute, they wanted to hear the counter argument, and then the dawn vote at 7 a. M. Along party lines, no need to get 60 majority, it was just majority vote is finished. Do you want to pick up on some of the questions . Yeah, i think going with t the i think its not lost on many of us from nigeria that actually for the a moral challenges for the United States. Yeah, because we could remember vividly the bribery case, the former vicepresident dick cheney was also former vp, and now with the involvement of chevron in some of the shady deals that we are guking about, theres no way you can have the office from the national office. And there were since the emergence as secretary clinton you had dick cheney as the vicepresident and his connecti connection i want to respond to the question about the corruption in the oil industry. I mean, the Oil Management companies, corruption with countries youre saying the national Oil Companies. National companies and i think its not to continue the narrative its for us to change it and changing the narrative is to quickly, no way corruption would have been as pervasive so if you want to continue, be responsible for the level hf the corruption there let me give you an example. Many of these iocs to the appointment of many of the leaders of these national Oil Companies. They have a very Critical Role to play, they limit the they assure the appointment of these guys. So where do you expect many of the appointees. An example, [inaudible]. And on the licenses, we had it like 25 years and exxonmobil director, he was there through the process of the oil man. You can be sure that hes not there to protect if youre not careful not going to get to the root of many of this. They thought when we are talking about corruption, those people that have been corrupt lets go to one there, one here. Here. I have to two part question, i was curious how the crisis in nigeria and boca haram with an opportunity to corruption of other sectors. Most notably the minister of defense. The one with glasses i want to ask you to speak to some of the financial institutions, wittingly or unwittingly some of the transactions and how some could help with the transparency and understanding that some mechanisms like suspicious activities that you mentioned are only available in the u. S. Institution is somewhat involved in a transaction. I thought i saw one right there. Im Kelly Troutman with oil team international. My question is through the implications of Climate Change in this discussion, Research Shows that there are, you know, enough potential emissions in in already operating oil and beyond the goal of well below, and expansion of the oil industry is ultimately incompatible with climate under that context. How do you see financial transparency or transparency Oil Extraction factoring in climate risk and given addressing Climate Change requires ultimately a decline in the oil industry in the next three decades realistically how does it play into reducing corruption, obviously a smaller oil industry, but cant expand into the reserve, a less corrupt oil industry and economic. I think weve got it. Im sorry. Thanks a lolt. So we are going to have to thats going to have to wrap it up with the answers to those three excellent questions. You want to start with Security Side of things . Its actually very situation, very unfortunate that we have to go through what actually started as very unfortunate political orchestrated conflict, but one of the governments we had in nigeria and go through understanding of what was boca haram. Like i said actually wasnt anything close to religious issue. They dont have any religious philosop philosophy. Their practices are completely against the religious, so i understa understand the religion called islam. But also for the government [inaudible] h both the president and vicepreside vicepresident , needed to whip up the Political Sentiment to emerge as the president during the 2011 election. So there was a whole campaign who have had the most period of most especially against the interests of having to run for the presidency in order to woo the population of the country. And it started out and unfortunately, many of the nigerians because of also the level of, you know, religious propensi propensity, to buy into that argument and say this is actually a religious fight. But the question youd have to ask yourself. Would you want to fight cuba, for instance, the americans, doesnt make sense. But i think that the substantial of the question went to something you said earlier, which is that to some extent this robbing of the resources is fueling the kind of files that boca haram represents. I mean, can you draw a connection between the subject of this conversation and the violence in the north and south. Actually going to conclude on that note and give that understanding. If you did not have the understand youd probably go with the previous notion that this is a religious crisis. You have to understand its not religious. Its political, and designed by people who work to fill full the corrupt government and away from other crisis that are already going the and for them to it was as bad as a group, with the military, some were captured by boca haram and i did a report with [inaudible] and i went to some of those things and i couldnt help, but the level of that that were wrecked in those communities. The moment you have a change of government and there was a new commitment to the fight against boca haram, all the states and local governments were taken back. En its now like it is. To carry out two sides and its not the usual trend of actually taking or confronting the military like you had before, too. The level of corruption that went into the defense and luckily. This is the common manifest with the economic Financial Crime commission, investigating and the contract of the pact. It shows while the world like the government was resources to fighting boca haram, they were going into private pockets and finding their way, i mean, [inaudible] it was impounded in south africa with huge, hundreds of millions of dollars which was claimed to be meant for procurement. How do you go by with the level of accountability and that is also i should say even in the u. S. There are about 4 billion money from the military government that are still within banks in the United States and these are huge situations [inaudible] many of the guys on that better education would you take the climate question . I have something to say about that, too. Its a big question and an important one, obviously, but you know, i think a couple of things to say. The future of the oil industry as a going concern and the value attributed to Oil Companies with reserves probably a function to a great extent in the timeline youre thinking about like the decades long struggle to prevent temperature rise above 2 degrees celsius and probably a function of whether or not electric vehicles emerge as a dominant Transportation System around the world, you know, exxonmobil has been planning for Disruptive Technologies for a long time, constantly evaluating threats to their industry. The only one thats ever, at least during the time i was reporting and writing that book, the one that really kind of got their attention out the side of their eyes was the possibility of a very fast pivot to electric vehicles because oil is primarily a transportation fuel. Its also used in the manufacture of plastics. Its primarily transportation fuel. The future of electricity doesnt implicate the oil industry the way it does because of the national gas xoen component. A company thats half an oil company. We live in Market Forces and big longterm Capital Investments and consequence for shareholders to own legacy oil and Coal Companies is going to flow partly from whether or not theres a positive innovation to cleaner transportation. On the electricity side i think its a subtle matter that despite the Trump Administration that the coal industry is going to have theyre just delaying their decline, theyre not going to be rescued and natural gas is essential going to be part of a mix and thats a whole other set of subjects. But it goes back to this question of where pressure points lie. So, ultimately the future of the oil industry will be decided partly by markets and partly by Public Opinion. One reason why this struggle about corruption we have been talking about is different from, say, accountability in supply chains from manufacture of tennis shoes, for example, or coffee because its not a fundamental consumer business, they dont care about Public Opinion. Yes, theres a brand on a gas station where you fill in your tank, but its a utility function, okay. You can boycott exxon and across the street and fill up at bp. What difference does it make . You have to fill your tank with gas. So, its a different set of pressures that are required to move these problems and the last thing id say about Public Opinion is that on climate and how urgent the Climate Risks are and whether or not were willing to pay a price to address the risks, we are the outlier in the United States, the question is settled in the rest of the world. Week pound the table and withdraw from paris and isolate ourselves and its not going to change the opinion. American opinion will eventually catch up with the rest of the world. Its a strange anomaly. Us and australia are the two self interested fossil fuel producers who managed to confuse our public about questions that the rest of the world really considers settled and for good reason. You want to wind this up . Id like to check something and while i totally agree with what you just said, it struck me that part of the solution to arriving at electrification constructs that would work come down to the investment level. And if you had to invest like there was no tomorrow, like there was really no tomorrow, you might pull your finger out and put some extra resources in. If, for example, i gave you, i dont know what the annual budget now is for oil and gas production, if i gave it to you and gave you the worlds best, say youve got five years to pull your finger out and give us the innovation to do this, this and this, the key sort of storage issues, blah, blah, blah, i think a pretty good shot at it. In the end it comes down to who is making the money and that at that comes to us and the people and how we input into politics and thats the nexis with corruption. Theres an other level of corruption on my view that goes beyond legal or illegal and into the space of capture of political space. If you ask the question, you know, we won the argument about revenue in 2003, so, what the hell are we still talking about it for . And the reason for that, theres an asymmetry at the political level despite some very brave people, some in this room, who are willing to take the leap and push a policy position. The u. S. Had leadership on this, created a disclosure mechanism that the rest of the world followed. And so i think its about returning back, and we the people, whichever country, needs to seize the initiative and get our leaders to show some leadership. Because we face an existential crisis. Are we going to let the profiteers to get away with it. The elephant in the room how many assets the company had. If theres a policy and that captures the space there wont be a policy, there will be a commitment unless we capture that space. And they can no longer rule there wont be a policy. You can no longer say hch this im going into will be viable for the next 20 years. And whether theres a growing momentum despite the cra resolution, for project level disclosure, why shouldnt we have Climate Risk Disclosure on a project by project basis . Its material for us, the people, to know say in a country like nigeria or uganda teens are heading back to school and making sure that theyre safe behind the wheel theyre announcing a teen Safety Initiative at the National Press club. This live event is just getting underway. Professionally as a former Television News reporter of traffic safety, it has been a passion of mine for years and im thrilled to be here this morning. For those of you who are now to ffcla, its an organization that helps youth develop workplace skills through families and Consumer Sciences to prepare them better for both