Of all we are into the season where this city tends to india and so we are already delighted that you are here to discuss a problem that is arguably as important here in the United States as it is around the world where we will be focusing on it. Let me just very briefly introduce myself and who will be conversant with today. Im sarah chayes. Carnegie endowment for International Peace in the democracy and rule of law program, not to the climate and energy program. Simon is going to kick us off. Simon taylor who is one of the founders of Global Witness which is in mighty one of the most innovative and effective organizations working in this space around the world, and it is very interesting combines advocacy with extremely rigorous investigations, and thats one of the things that will be talking about today is a recent report by Global Witness about shells activity in nigeria. He also helped galvanize a coalition of suicide organizations of 40 countries worldwide, working for more accountability and openness init the sector. Its called publish what you pay. Saving next to simon is steve coll who is of the dean of Columbia Journalism School sitting next to has a whole other dimension of effort in the current political space. He also, just a bevy of awards has one no less than two pulitzer prizes. The first one for reporting on the securities and Exchange Commission, which again has some real relevance. Hes also the author of private empire, which is a read data recommend to all of you when you are done with this. Go out and buy private empire and it tells you a lot, not just about the industry but also about quite unimportant element of u. S. Politics at the moment. And Olarenwaju Suraju is a member of the human and Environmental Development agenda. St and i just love that, like lets put those two together, human and Environmental Developmentdee sidebyside. Its in the legos nigeria and hes an expert on the auto sector in nigeria and participate in this investigation as well as some others. So thanks again, and let me just come over here and join the conversation. That means like i have to justst ask your forgiveness while i do this. And let me just start, simon, asking you about this shall. What is it that michelle new and what cause you at Global Witness to really feel like this was such a critical subject to investigate . Okay. Thats a good question. So yes, indeed, what did they know . Is not just a day who knew. There were a few other people who knew but i will come to that in the second. Perhaps i can set with some very boring stats that say quite a lot. Ey many of you be familiar with the Antibribery Convention from 1999. In 2014 they did a study of some 400 Corruption Cases which looked at the period of operation of the convention. And fully twothirds of the cases they looked at involved just for factors. And guess what, the one that featured the most times was the extract is sector with 19 of the cases. Most of these involve public procurement contracts or access to concessions, and most also included players who were from wealthy countries. Tr i think we can say quite a lot about that. Ive spent i guess Something Like the last 20 is looking at corruption in the oil and gas and mining sector. I would add a further twist that refines for me at least the notion that the extractors is the most corrupt sector. The oil sector because everywhere we look, in certain regions, i no longer ask where is the corruption. Its more which concession is not corrupt. Sk i think thats a very true situation. On top of that i would say there arcertain members of the oil industry who i do now as severely corrupt because everywhere we find them, theyve been involved in corrupt deals. So thats the thing i would like to set. One of the things we have been doing in this past twentyyear period has been on the one hand, to understand how corruption works, and then look at policy prescriptions that might come to play along with other prescriptions because were not just talking about the operating search of the oil industry. We are talking about banks operate, how monies flow internationally. Y. We can come back to that in the discussion about solutions a bit later. But actually to understand the different married and mechanism of corruption we are to investigate and thats wherean this comes along. This is just merely the latest development in our work on this case study around nigeria called opl 245. Nigeria, probably west africas largest oil block. The history, too long to go into it beyond a very high level detail, but essentially it boils down to the deal that was included in april 2011 in which shell, we all know show, listed in the u. S. But also in uk and in the netherlands, together with its partner which is italys Largest Corporation acquired opl 245. The problem is they spent two years directing negotiating with the person who owned it which is not other than for managing dictator the oil minister. Who in april 1998 set up a Shell Company called malibu, face up a piece of paper which consisted of him as the owner hidden by a false name together with a batch of some and the secretary of the company was a sort of the imagee have in my mind was a sort of better call salt type letter in the backstreet office. For those of you who know the breaking bad series. Thats the kind of operation shall we were involved with. Basically the Biggest Offshore Oil blockade, essential going to bed with a piece of paper. No skill set, no knowledge, no backup and they must have known that this was a stolen piece of real estate of the nigerian piee state. I wont bore you with details from the beginning but there is then various litigation battles happen. Malibu lost the plot, shall lost it and malibu got it back, various litigation process went on. Ss then we arrive in 2009. The beginning of the negotiation over a twoyear period with delightful emails that come out from that time which have come out of course cases. One particularly noticeable is one where a former mi6 official who was helping them, mr. Bonds company you will probably be familiar, with writing to some people further up the chain, its difficult to come to an arrangement where he would be happy with the mentally getting on much better. Its an interesting sort of coats the way which things were preceding. Suffice it to say, the initial effort they went through to strike this deal collapsed. In the end of them nigerian attorney general who also happen to be a former lawyer brokered the deal they came to pass. Basically what it consisted of was that by passing from the treasury of a payment of 1. 1 billion through an escrow arrangement delivered a set upup in london, run by jpmorgan. The money filtered off into a series of other Shell Companies back in nigeria. And with where did it go . The revelations are interested because we acquired some internal emails which showed the highest levels in the country in shell epithet that we can include also the Italian Company as well, the money thing he was going to go on to eyes level officials and get it when had with the deal anyway. So today they are in possession of stolen goods. They didnt pay the Nigerian Government for these assets and they are now being investigated in criminal investigations in multiple country. Presley and come back to the details later. Later reinforce something m here. Youve got all of this shell, shell with the shell arrangements, right . Sorry, 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. Lets face it, shell could notot know the movie was. He was the oil minister they do with them for years. Th they dealt with them as though he were the private owner of exactly. On top of that the structure they created in the deal as it was concluded with via escrow arrangement in london. We consider that to be a deliberate creation because had they paid as constitution required into the socalled reqi federation account, at that point the money would have gone into the whole of government and wouldve had to have been ask appropriate by the official process to be spent however. It could no longer be used to pay people. So they have to great and offshore system in order to be able to pass it and thats what they did. Just to belabor the obvious, what this whole thing is about is that you have, tell me if i have this right. Yo you have Nigerian Government and people assets, which by nigerias law, the payment for it needs to go into the federation account, which is like the federal budget, right . And they directed that payment speed is not to go into them. And that was created by the way which the deal was constructed. Essentially a mechanism was greeted to bypass the normal channel and went into private hands. Lets put this in context. 1. 1 billion which we consider to be off the back of a truck prize, because we know shells intro estimates were substantially higher. There was a question there. Off the back of the truck . English apologize for that. When you know, this is speedy a Bargain Basement price . Why would anyone want to from a business perspective from the cupboards perspective want a bargain sell off price . Because the money was going to somewhere else. One of the things you see from in these emails that we report here, that there was a highest level discussion within shell about how they knew there was a high likelihood that the money would go on through various press and determine mechanisms to highest level officials, including good luck jonathan who is specifically mentioned. We have internal discussions at highest levels with knowledge of the high likelihood that money would go on. Yet they went ahead. Shell is talking to shell about the fact the rather than by this asset for managing people, they are going to buy it as though it were the personall property of this little Shell Company, and by calling it the personal property of these three guys they are able to get it wicked cheap, whereas it they have had to buy it from the nigerian people, presumably the Nigerian Government would have negotiated, if it were a government acting on behalf of of its people, it would have been that type of the government then it wouldve been putting the screws in to get a much higher price. A you would expect that it would have looked at for the interest of the people are sold it for the best price. In 2011 we were at a different price structure that we are today. Theres many other aspects of this that greatly complicate the discussion but in essence, they saw that the actual holder of the asset was malibu so they went about in protest of initially trying to buy direct from malibu. Having negotiated with him for two years, nearly two years and ended up including, concluding a deal brokered by the attorneyyao general who, in fact, used to be the lawyer. And the arrangement bakery was this offshore. E. That wasnt an arrangement the attorney general instructed. This was designed by the company. Steve, youve been looking at the sector worldwide, as has Global Witness but i just wonder if you can place this story in, you know, in, again come to look at a number of other countries, is this an aberration . Is a 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 so we probably learn a lot more as investigations by judicial authorities proceed. It is part of the much larger picture as simon alluded to. I thought i would mention a couple of points of context may be from my own reporting. Sarah was kind enough to mention private empire, a book about exxon mobil, and American Foreign policy was sort of the idea. Actually i sort out to write about the geopolitics of oil in the age of constraints, the age of Climate Change, the age of increased competition. I got out in to the research and i thought i dont have a story, i better choose a company site chose exxon mobil. I had no idea what i was getting into. It seemed like a good subject ae the time, and so then i made enough of of where exxon mobil produced its oil. I was very 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 places exxon mobil worked was chad, for example. They had been there trying to develop some rather difficult landlocked oil that a difficulty geological characteristics, was a long way from the ocean. Nigeria recurring theme of these kinds of crimes because nigerian oil is very appealing. Om its right near the ocean. Us its easy to get to market. Its sweet crude and it produces well. But chadds oil is difficult oill and chat is a very poor societ, very unstable. Subject to two attempts repeatedly, and coup attendst i go down to the oil area, talk to people who live down there, people who worked on the exxon compound, government officials, suicide activist, lots of different people after a couple of weeks of the threat and said why is exxon mobil here . What are they doing . They are producing a few hundred thousand barrels of oil a day in the consortium, but this isisi really difficult territory,hat s politically unstable. Why is it necessary to be here doing this business . An interesting and important answer which is one of the dilemmas that at least until the shale revolution Big Oil Companies faced was that they were producing more oil every year than they were fighting. They had run out of easy oil basically pick they had run out of domestic oil. They had run out of simple oil to produce. And so they would going further and further into difficult frontiers, both difficult p production frontiers like the arctic where there were high risks and very difficult engineering challenges, it also difficult political frontiersal because they just needed theusey oil. Every che 21,000 barrels a day counted. So that was the answer to either in chad. Its also why there in Equatorial Guinea and why they were in places where no reasonable company would really want to do a lot of business, to be honest. That pressure on global Oil Producers is, remains. There are Technological Breakthroughs that can take you away from political risks and bring into different kind of risk like drilling in really deep water drilling and really hostile cold climates. But thats a fundamental piece of context for this constant interaction between wealthy companies and poor societies. I want to stop you on that also and just say reading private empire, like this was a transformational thing for me about the book was understanding this business model. Its not about, or its not just about selling oil. About proving to youroducers 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 old has as much milk as is on thete shelf . Is at the right way. Was that pressure was especially strong around the time that i was working on this book but yes, thats it. The other thing you have to understand and richard simon, you run into this, and it is putting bribery cases like involving shell and maybe more shall than any into it to a larger context, if you look at a list of the 20 largest Oil Companies in the world, 18 of them are stateowned. You have, owned by russian entities, like china, by india. Its an exception exxon mobil to be fully privately controlled to the extent you consider exxon mobil completely independent of the United States. They certainly see themselves as independent of the United States. And so was interesting about what simon and folks do, and will get to this in the solutions part, the very fact wher these companies are accountable to stakeholders other than governments that own them actually creates the point of leverage. There different kinds of vulnerability. Fe they have shoulder fairly static shareholders, security and Exchange Commission, services i do groups that, whereas they dont feel those pressures. It and so its a complicated structure to think about trying to change. Ns. Because you have all of these privately Held Companies that feel why are we the guinea pigs for a Global Governance system that doesnt touch are stateowned competitors . It also means theres probably quite a lot of these transactions involving state owned companies and poor governments that are even worse, that we cannot access, despite some of the best investigators in the world. Cannot 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 these administrations. The extracted Industries Transparency initiative which will talk about later, which is by no means a magic bullet but it is part of a suite of transparency efforts that were developed in the early 2000s 20s with the support of the bush administration. And now the Trump Administration has come in and basically one of its first ask of rolling back obama era rules pulled the plug a transparency requirement that the secure security and Exchange Commission was made to bring forward and has been signaling that they are going to withdraw the United States from anticipation in the iti, and t even more advanced form ofhe participation that it developed during the obama administration. We will get speedy will get you this but i was writing something yesterday about paternalism and these times, and one of the things that occurred to me, piecing through some details is that, and this isnt surprising, maybe maybe its not even that interesting, but i think as a practical matter all of 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 likes not just in this country but in lots of other places, and if you look back to, for example, the pressures on Society Groups like a Global Witness, over the last ten years, globally, and a space in which groups like that operate, it really has been narrowing quite steadily. Now it is just pivoted off alk t cliff. Thats really come when we talk about corruption and strategies to combat it in the extract is, looking at the next three or four years we have to place the question in the context of a general repudiation by the United States government of a whole series of regimes comparable to the transparency ones on nationalist grounds. This is a real departure, a departure from, just but a punctuation mark on it, its also departure from theable to Republican PartyForeign Policy in modern era. Yeah. We are going to circle back on e number of those points. I would love it if you could come first of all youve done some work on exxon mobil in nigeria, havent you . What have you been working on . I think it would be important to understand that tale, the oil industry thats what he wanted to get out, yes. You are on the receiving end of a lot of these practices. So tell us what it feels like to be, you know, working with people on the ground where the extract is taking place. I think its also very important that i get a bit worried listening to the rollback that the current government and the united statet is actually pushing around the issue of accountability. Coming from a background where you seen the capacity of very key sectors, mainstream of economy, operating like a criminal enterprise, where quite obvious stakeholders, that majorly about the key five Oil Companies operators across the world are involved in a whole lot of, sometimes nondeclaration of the the leasing of this oil. Thithis is a country where it is possible for 200,000 barrels of crude oil to disappear on a daily basis. How would you link chevron, what is the connection. The level of corruption or which countries. [inaudible] thats going to tell you that if its not only about two countries, its also about the conspiracy that involves thea banks. It includes the naval forces, people from the embassies. Its as possible is the extent that. [inaudible] within 2011 and 2014, crude oil was worth about 12 billion as it was underreported or not reported. It moved from nigeria to the islands justin that time. It is also possible, because it is a situation. [inaudible] the oil managing company in nigeria, it was in a period ofe. Time where weve had the worst and the most leadership and i must confess that its not just about the personalities back in nigeria. They work with International Organizations and companies. [inaudible] that is why you could see assets and properties all over the western world. What are the consequences. The au courant terrorism that you see is a function, many of those proceeds that are meant to provide education, the migration that you see in the desert and the consequences of this, the immigration issue that you see in the u. S. Are part of the consequences. [inaudible] its moving beyond that. I was watching the film about burning bir bernie murderedadoff off. No [inaudible] the failure of citizens to actually take action and the consequences that are unpredictable for many of us. So. I want to pick up on threeee things, just in that last sequence that i just want to see if we can drive home a little further. One was you said assets scattered all over the place. Perdue just went on a tour in london. Can you explain, what were you looking at in london . In crime crimea, that area stricken in the uk, when you look at the process, you can get out some of those monies and properties that we went looking for. People dont know what you are looking for. Can i just ask you, can i just spell it out, what were you looking at. The department of justice and the u. S. Actually filed taxes against nigeria. The oil minister in nigeria, what were you looking at in london. Were looking at properties in london. When you listen to that, you understand how they actually get those monies out of the country. Exxon mobil renewed his license, the Oil Mining License between 2007 and 2009. 3. 9 mil [inaudible] we were willing to pay 3. 85 billion. Of course exxon mobil has the licenses for like 50 years and they were paying for renewals. E was they would view the values from 3. 922. 8 billion if exxon, and without any otherne commitment. But if theyre going to build refineries it will be 1. 8 billion. Between exxon mobil, that was a position where we had the former president and that was the situation. When murrieta died and the next president came into office they were talking with exxon mobil. Because she wasnt the one. People dont know all ofow the names so hes talking about good luck jonathans oiloi minister. When shecame she granted an interview and said this is a dodgy deal. This is against the interest of nigeria. She got only 50 million additional for nigeria. Exxon mobil walked away with licenses, 3. 8 billion over the course of 680 million. Through which they get accesspo to this corrupt, illicit money and it affects all the international markets. So, let me bring that back, you 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. It was so interesting the way you drew together the impacts o on, the involvement of and the involvement on our country, the uk, the u. S. And netherlands. Number one, co conspiracy. Number two, a lot of nice houses being bought on our property markets, but number three, the violence so i also looked at how this kind of corruption helps drive people into the arms of boko haram or into insurgencies in the delta area, and, the flows of migration and our answer is lets build a wall of one kind or another, and i think you are suggesting there is a connection between this type of activity and people leaving hom home, crossing the desert, crossing the sea. Precisely. Lets think about how this conversation was started on what we do about this in the current context. T. What are you guys, again in order but interrupt each other, simon. And i say one thing about violence because you brought that up. I dont know if youve been to the area of new guinea. I went once and that was probably for doing honest work about the only time you can go. Its a very small country, he used to be a spanish colony and its capital is on an island and exxon mobil inherited a project that mobil originally developed there, and by the time i went around in 2011, they were producing about 500 barrels of oil. Day. That was all controlled by one family. That extortion induceses violence. What this looks like its a giant bank waiting to be robbed by someone who can take over the palace. E. 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 would keep your family wealthy for four generations. It basically induced all thesen, attackers to come over from neighboring countries and they would just pry into the shores, jump off the vote and run shooting at the palace to try to keep it over, even if it only lasted for like three weeks, they could still get rich. The government, not really having, because it was such a police state, we didnt have at lot of loyalty outside the family so it was like having a bodyguard or bankcard so they hired moroccans. It was this moroccan guard force basically controlling the president ial palace in the parliament, and people coming at it like every six weeks, flying over on farm to speedboats. You can see this in a political sense that is invented by oil, but that was the almost cartoon version. One of the leaders of the militants came over to tell the world that they have the whale, Even Exchange oil. Its also a rule of law that created the political insecurity that you have in many of these countries. [inaudible] they are paid to individuals and warlords all at once. They want access for wealth and create the securities you have allowed. [inaudible] one other point is that his comments imply, theres a reason why oil is, why it particularly triggers this kind of caught cash corruption. Etet the market is so liquid and easy to make sales and without accountability. Its literally a liquid market. You can start selling in the stock market and no one will ever know about the wholeness of the transaction and theres no disclosure. Er take natural gas, youve got to build a pipeline between you and the customer. You cant just take 200 barrels and sell it in the stock market. Its a little bit more like diamonds in that way. Its something easy to smuggle but in a very big global context. I would challenge that a little bit in the sense that we were challenged somewhere around the movements, the insurgency time and thes stealing of wholesale charges of oil was quite substantial. [inaudible]ho lat they later went to work and try to solve some of the peace issues or lack of peace issues. What he was putting forward was the issue of fingerprints on oil. There were webbased tests that were good to pinpoint where it had come from. As a failed biologist i can appreciate the significance of that. I can imagine the sources. [inaudible] one thing that was really interesting to me was that when a particular shipmentas a i went out, it didnt have a contract. They said its fine but we will sink the next ship unless you cough up a contract. They just cut out the middle people and ended up legalizing concessions. Im interested in what the were saying sorcerers. [inaudible] it struck me that there are ways to follow where ships have come from and there are people who know absolutely where they come from. Seems to me that when you have a discrepancyof whats coming in versus what goes out, i think countries on the receiving end are able to freeze assets. Theres jus if theres discrepancy then we are impounding this and theres the answer. So you pivoted us to some of the things we could do, even ahead or separate from the companies themselves publishing what they are paying, you are saying at the court, a ship comes in, documentation, where did itha come from. Its like they come with a cart of ferraris, i shouldnt be surprised if my name gets impounded. Perwor so why should be any different for a supertanker of oil. There is a kind of disconnect between trade and the physical commodity and that also creates lots of holes that people can exploit. I thini think you are right. If theres a will, if you place the higher its standard of responsibility on parties to a financial transaction andnd know the source of the funds to be reliable and there are severe penalties if they allow transactions from other sources, you cannot create a perfect system, but a much tighter system. Then the workarounds to engagege in corrupt activity just gets harder and harder and the risk goes up. I think, Global Governance hasnt really gotten tothe first round in comparison to financial person. In the u. S. For example theres something called suspicious activity reporting. If you are a clerk at a bank and a customer walks in with 7000 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 means that the lawyer is going to tell you as a clerk, you better file a suspicious activity report. If that person doesnt have aor food stand or some other thing. It just goes to the treasury in a big database, doesnt mean its a criminal investigation, but its very rigorous and the threshold and banks for suspicious activity reports are relatively low, but in the u. S. What industry do you think is exempt fromwh filing suspicious activity reports. Oil. Real estate. That relevance in the current political setting, if you are Real Estate Broker you have no obligation if someone shows up with an llc and a truck full of dollars and says i want to buy an apartment in some famous mans condo building. [laughter] there are these huge gaps in Global Governance around these transactions. I think oil is sort of in between. You have this giant market thats very fluid and not accountable. What would you like to see, if you could name the first thing that you would like to see in terms of a remedy for the type of activity eli, what would it be. International . Sure, do one international and one local. On the part of the diplomaticus committee in dealing with transactions, the oil test that imentioned, its not a black market. Many of the ships, like you said are tracked from the water. [inaudible] they need to check the point of origin and what has not been declared. The ones that i mentioned. [inaudible] that alone, just for three years is what amounts to 12 billion. Youre saying that the american system does not deal with some of these resourcesis coming into the system. Tern w [inaudible] [inaudible] we just think in money. I think its important that it is reviewed to the extent. [inaudible]htly o not only your country but the security of your citizens are going to this country. To know that exxon, you talk about eggs on, its an American Company so exxon will be connected to americans. If you talk about shall we can tell you its a british company. On how they view the reputation of population of the country. Yes, and its very important. [inaudible] i think part of getting toeq that space requires that justice is done. I want to sort of preempt this by saying. [inaudible] we spent five years investigating this. Based on the evidence weve obtained, there are things going by and we will see what we will get to and hopefully things can go forward lets just have a reflection for a second. I dont know to the extent that people are familiar with this case, but one of the findings that came out of the carl evans investigation intor the texaco investigation was informed by mexico because of the amount of tele windows in which drug cartel money was being an extra large suitcases. You can imagine, youve got to get extra large suitcases print he was personally informed about this and nothing happened. If you look at the end consider entering consequence, it was a 1. 9 billion fine and i think we worked out if you divide this by ten years of criminal activity because there was other crimes, itau comes to 23 days profitably goes to jail. Now, the uk boss went on to become our very own trade minister. So far the worst that has happened to him is he spent the day being harassed by channel four news who askedda some questions and his answer was im not commenting. My point here is unless you put people who are ultimately responsible for these kind of activities, and lets a set, 60000 people were killed between the two main drug cartels in the government, i think theres a problem that people get away with. To the p it was subject to a prosecution agreement with the d. O. J. For previous corruption in nigeria where most Senior Management were engaged personally in the destruction of the next corrupt deal. They have this great internal system of checks and balances, but while that was going on while he was in charge, he was involved. He knew. Ew what is that about. We do also want to talk a little bit about the domestic Political Climate that allows for some of us and i might solicit some questions. Simon, you been doing this for a long time but i suppose we would probably all say if you want to fix this or if you want to be effective, you have to take some kind of all of the above strategy. We can evaluate the effectiveness of the relative value of attempts whether their institutions or tactics. Big picture, after all thesesere years, when you think aboutt the role of Civil Society groups developing their own campaign for transparency on behalf of their own citizens. When you think about transparency initiatives that are multi stakeholder, when you think about government prosecutions that bring to jail consequences, what do you think has overcome question what you think has been the most effective strategy . There would be others we can put in our list, but what is the area that time and again mally moves the needle. We need transparency. We need to see the revenue flow. They wanted to have projects rather than disclosure to find out all of the concessions in nigeria. Then you have a single big payment and you cant say anything. Its completely irrelevant data and we can work that out in a crude calculation. Its meaningless. We need to have granularity. Osu. You need consequence and budgetary. You need to look at the role of banks in providing backup loans. You need banks to properly know who their customers are. Within days we hear the bank here and there, but you dont just discover that in five seconds. People know these systems are not operational. I think what steve is getting, is have you seen one that has actually provoked a reaction. Ng what makes people the most responsive . [inaudible] the section of dodd frank shows you have something to hide in these transparency rules. Thats exactly were i was going with this. To the point about disclosure, the dodd frank act, in june 2010 that wouldve required disclosure, we have seen reasons why, this is tooon expensive, it doesnt work, its impossible to measure, theres a whole list of experienced engine excuses. The second rule was incredibly large. T creating transparenc transparency and disclosure around these payments. If you go back to my earlier point, countries where after 20 years they show the concession that isnt corrupt as opposed to the other way around, or is it that they wish to maintain a corrupt environment where they can keep on making such payments. To illustrate this, cut the w first rule of the 1304 rule within the timeframe that th were congressionally dash had it been done like the second rule was, it wouldve taken ten days before this deal was constructed. Does anyone really think that they would pay the billiondollar bond to the highest level officials if they had to disclose that payment . They didnt do that because they knew it would be covered up and they got ripped off and t disclose the whole thing. So the environment and we have to look at threes and why the Congress Took down this second rule and was all about u. S. Leadership in this arena. What happened and why . Finally i like to turn to you, please, there will be people bringing you microphones. This is being broadcast on cspan, so we need to wait for the microphone. We also need you to identify yourself. I do see frank back there but im not going to you first, as you know, im going to go right here. Your discussion here, constantly mentioning exxon mobil. We have the question is we have a secretary of state was a chairman from exxon mobil. Isnt there some lack of transparency there . Something we dont know . Ng are they investigating him or others like it . T are we doing one at a time . Why dont we do a couple. Thats a good idea. All right, here in front and then also in the back. I believe when they bega producing oil, that money was placed in a trust in the government of chad had to request money from it and justify what they were going to do with it. How did that work out. Looking a little bit further back, okay, go to frank right here in the middlek. Of the aisle. Good afternoon. Great discussion. Comment on solutions, i think its a remarkable event that the justice department, on the h of july announced they are going to civil complaints against two nigerian people in this country for an apartment in manhattan and an 8 million yacht. Ut the announced at the same timeli this businessman was paid many Million Dollars to buy real estate in and around london. The interesting thing is the increase in fbi interest, tracing the money all the way and going after the money herere as a way of exposing the crimes when you cant really go after the corporation. I think thats a major change. My question to you is, i have a sense, maybe im wrong that many of us in this area focused too much on corporations and private sector and not enough on enterprise. Whether its petro or the National Petroleum corporation, the scale of their engagement with corruption seems to be absolutely massive and we havent done nearly enough to focus on it or to find solution solutions. I think the scale of money we are talking about dwarfs the bribes being paid. Okay, you want to feel those three. Sure. Ill take the second question l serious you have a right to recall that when oil and chad was first developed, citibank and london and the Consortium Members who are producing theil oil had payments through a trust fund will be allocated for social development, education, health. Long story short, it broke down under pressures of violence when the governmentn was attacked from sudan. He felt he had a crisis and at that point he was producing enough oil and receiving royalties that he had the leverage that he didnt have at the beginning when he agreed to this. The thing that was so striking about that time is just a snapshot of what these distortions feel like even apart from legal corruption. At the time that they needed the americans to help him get out of this box that he put himself in. H the u. S. Embassy in the capital had 10 million in aid to chad, so about 10 million was what the u. S. Government spent in chad. Exxon mobil consortium realtyy check every year was 600 million. Orism if you wonder what the power of the United States is, its not the marines guarding the embassies and spending a few Million Dollars on agricultural trade and counterterrorism, its the check that rates yo company that writes the check every year. This is a really importantt point to bear in mind. When, i lived in afghanistanan for a long time and i wasnt particularly impressed for a variety of reasons. Youre getting 18 differentck signals from the United States of america. Youve got to pick, who is it that speaks to the states of america. Its a really important factor to bear in mind. There are two chapters of his e history of the chief executive that we dont know as much about now that we will eventually. One involves a find that the Trump AdministrationTreasury Department entered into against exxon mobil in which exxon mobil has decided to litigate against. Whatever the back story is about willful violation of sanctions on russia and their very substantial Framework Agreement agreements, thats an area that will be an interesting. The fact that exxon mobil, chose to litigate means that of course they want to defend a the reputation and they have deep pockets but it also means that a lot of information is likely to come out in the course of that litigation. As a journalist, im interested in that. The second thing that we havent touched on is thisd long tangled history of exxonpa mobil and Climate Change, particularly the era in which it was funding campaigns led by nonscientists around the early 2000s. Now theres litigation that has popped up here and there in which theres been a whole series of back channel email between the chief executive and others, that didnt come out in the initial discovery but which now have been discovered what the content of those emails are, whether theyre relevant to some of these cases. Id be curious to watch. I would like to come in behind that for one second say there is a more conceptual issue here that is a graved concern to all of us. Ive been looking at how their structured, how the structure of the government is an integrated network in which public and private sector, to either overlap where we have sectors or theres a very thick tissue of exchanges, sort of quid pro quo that tieser the network together. Am i looking at honduras orla the United States of america. The degree of overlap of functional overlap between the top reaches of a very tight group, this is not the shoemaker of the baker, or the president of france that has brought a lot of Small Business people in, were not tied about the local shoemaker, were talking a very different and private sector element. One of the things thats been very apparent recently, about how exxon and chevron in particular have been very reluctant, so much so that were added interesting moment where it will be felt innovation should go forward. All that . There sufficient history of opposition to having any form whatsoever. Its quite interesting the first country to be validated was present. They played a key role. And it [inaudible] this was an inadequacy of thes standard at the time which has been tightened up to come to the point that there is this history where there is actually opposition to the conclusion of dodd frank and opposition throughout theki creation and so on. My impression from my sources is that he himself was radically opposed to this coming into place. Ng i think its very interesting that the use of the cra resolution, the congressional review act, the taking down of the second rule. The first one was a Legal Process and it ended up opening up to a Public Record process. I think if they tried to litigate because it was continued opposition, theree wouldve been a serious fight. It was a solid rule. The evidence supported that. What did they do . They go to congress and asked him to take it down. In my view, as a person who comes from a fellow democratic state, was one of the most shameful acts of the democratic process that ive ever seen. The argument put forth to take it down, there are the arguments that were used in failed to create it in the first place which were thrown out by the evidence. I absolutely destroyed. The opposition back and said t it didnt count. [inaudible] a moral challenge for the United States because. [inaudible] the former Vice President dick cheney. [inaudible] and now with the involvement of chevron, theres no way you can separate the national from the international. Rex tillerson was like what we experienced we had the kenyon Vice President. Li [inaudible] the question about the corruption in the oil industry , the national Oil Companies. I think the purpose of these is not to actually. [inaudible] [inaudible] be responsible for the level of corruption there. [inaudible] let me give you a good example. The appointment of many of the leaders of these national Oil Companies have. [inaudible] so whatever you expect the arabians. [inaudible] hes the Prime Minister and hes also with exxon mobil. [inaudible] hes the exxon mobil director and he was there. [inaudible] you can be sure he was not there to protect exxon mobil. You are not going to get to the root of the problem. [inaudible] thank you. Lets go, one there, one here. My. I work for Transparency International program. I have a twopart question. I was curious how the drop in Commodity Prices have affected opportunities for corruption in nigeria and how has the insurgency against from impacted corruption and other sectors. Theres one. There, with glasses right knee ill there. Mike good afternoon. I wanted to ask if you could speak to some of the Financial Institutions that are helping with the transparency and how some mechanisms are onlyso available if the u. S. Institution is involved in that transaction. My name is kelly trout and im with oil change international. The question gets to the implications of Climate Change in the discussion. Research shows there are enough potential omissions to take us beyond the paris goal of warming well below. [inaudible] [inaudible] factoring in Climate Risks, and Climate Change requires oil industry within the next three or four decades, how does that change corruption in the smaller industries. [inaudible] i think we got it. E thanks a lot. So, that will have to wrap it up with the answers to those three excellent questions. You want to start. Its a very unfortunate situation that what actually started. Isnaudible] there wasnt anything close to a remedial issue. Their processes are completely against evil. [inaudible] the government of the former. [inaudible] the president. [inaudible] and and mickey mouse all last night and tony said its okaypec no known on john an. [inaudible] [inaudible] [inaudible] level will in the affinity. [inaudible] [inaudible] the question is can be something said earlier which is, to some extent, this robbing of the resources is fueling the kind of violence that ron represents. Can you draw a connection between the subject of this conversation and the violence in the north and south. Standard to go with the previous notion, you need to understand its political. [inaudible] will. [inaudible] [inaudible] [inaudible] several local documents, i did report on world banks world vision,. [inaudible] i went to some of them and i couldnt help but see the level of havoc that was wrecked on those community. The moment you have government, there was a general commitment to fight against boko haram. All of them were taken back. [inaudible] it becomes, like i said [inaudible]defens the level of corruption, this is becoming manifested. [inaudible] [inaudible] [inaudible] it was going into private pocket and we are finding many problem problems. They were actually in south africa with hundreds of millions of dollars which was meant for the procurement. Buying arms with no cash . This level of of improvement. That is also, i should also say that even in the u. S. , there are about 4 billion, money from the military government that is still within banks in the United States. These are the hugest situations that feels not only the crisis but creates a divisions. Many engage with a better education. Would you take the climate . I have something to say about that. Its the big question, and importantly obviously, but i think a couple of things to say. The future of the oil industry as a growing concern and the value attribute to all companies with reserves probably a function to a great extent in the timeline you are thinking about like the decades longer struggle to prevent temperature rise above two degrees celsius. And probably a function of whether im not electric vehicles emerge as the dominant Transportation System around the world. Exxon mobil has been planning for Disruptive Technologies for a long time. Wthey are constantly evaluating threats to their industry. The only one thats ever at least during the time i was reporting and writing a book the one that really kind of gotthe n their attention out the sender r eyes was the possibility of a very fast payment to electric vehicles. Because oil is primarily a transportation tool. Its also used in the manufacture of plastics but its primarily a transportation fuel. The future of electricity doesnt implicate the oil industry the way, it does because of a natural gas component. A company like exxon is both have a Natural Gas Company now, only half an oil company. We live in the world Market Forces and powerful corporations and big longterm Capital Investment just being realisticp but positive incentive to ship and the consequence for shareholders whose own legacy or lend Coal Companies is going to flow parlay for more than that theres a positive innovation to cleaner transportation. On electricity side, i think if you settled matter that despite the Trump Administration that the coal industry is going tore have, they are just delaying their decline. They are not going to be rescued. Natural gas is going to be part of a nixon thats a whole nothr set of subjects. But it goes back to this question of where pressure points lie. Ultimately, the future of the oil industry will be decided partly in markets and partly by Public Opinion. One reason why this struggle about corruption weve been talking about is different from, say, a county building in supply chains for manufacturers of ten issues for example, or coffee is because the oil industry is not fundamentally a consumer business. They really dont care about Public Opinion. Yes, theres a brand on a gas station where you fill your tank but its a utility function. You can boycott exxon, go across the street and fill up at bp. Difference does it make . You have to fill your tank with gas. Its a different set of pressures that are required to move these problems. And the last thing i would say about Public Opinion is that on climate and urgent the Climate Risks are and whether not we arc willing to pay a price to address those risks, we are the outlier of the United States. The question is settled everywhere else in the world. We can pound the table to withdraw from paris and isolate ourselves. Its not going to change world w opinion. American opinion will eventually catch up with the rest of the world. Its a strange anomaly. Also in australia the self interested fossil fuel producers that have managed to confuse our publics about questions that the rest of the world really consider settled and for good reason. Do you want to whine to set . Id like to check something out. I think theres a great fast and onwards. I totally agree with what you just said. It certainly part of the solution arriving at elect electrification constructs thatw would work come down to the investment level. If you would invest like was no tomorrow, like there was really no tomorrow, you might pull a finger out and put resources in. If, for example, i gave you what the under budget is now for oil and Gas Exploration and production but if i gave it to you and give you the best answers, you have five years to point your finger out, given the innovation that will do this, this and this, they key storage issues, blah, blah, blah. I think you would get shot at. To me in the end it comes down to is making the money. That then comes back down to us the people and have input into politics and that is the nexus for corruption because the apeoe whole nother level faculty onn that which is legal or illegal entry into the space of capture of political space. If you ask, we won the argument about revenue in 2003. So what the hell are we still talking about it for . The reason for that is there is an asymmetry of political rabble despite some very brave people, some of whom are in this room, were willing to take the leap and push a policy position. The u. S. At leadership on this, great owl disclosure mechanism that the rest of the world follow and is now obligating on it. I think its about returning, and we the people need to seizew initiative and get our leaders to show some leadership. B we face an extension crisis but probably going to let the profiteers just get away with it . For risk disclosure, the elephant in a move his family at of the assets two companies have if there was a policy and thats what comes back to capture of the space. There wont be a policy even though theres a commitment unless we recapture that space. They can no longer rule out there will not be a policy which implies you no longer can say i can guarantee this field but im about to go into town so widespread that will only be viable for the next 20 years or whatever. We are at the stage was a growing momentum despite the setback of the sierra a resolution which i talked about the cra why should we have Climate Risk Disclosure on project by project basis . This material for us the people to know just say in a country like nature or another country like uganda which is embarking on oil filled future. If u. S. Citizens are wondering whether you want to put up with pollution, for example, as a possible byproduct of goingare n ahead, youve been sold this line this will create development dollars, but lets say the breakeven price is 70, i dont know what it is but theres no infrastructure in place to get to the coast, the costs go up to get we have Climate Action that delivers at the beginning of a new regime of electrification vehicles then the naval cadet even if the u. S. Doesnt do anything. The rest of the world will. The price will crash and all these places with the breakeven price is higher and that will increase as the price carries og down. We are left with the question of our Companies Come together with these leaders in this country, is it more about the bonus the leadership of the company will o get from booking and other reserve and the prospect of being able to pillage some of the money, if youre a crook lead on the side, or is it an economic example . If you think its economically viable been disclosed appear we need to regime that will force companies to tell us project byn project whether or not these are economically viable under a scenario of one and half or two degrees. That would be a very interestinn scenario to see because i think well find probably a very substantial number of projects in the existing portfolio are not economically viable. M meaning i risk to investors, about to your point about leverage, investors in these companies. This is going on now to some extent because there are, for example, accounting audits of companies as to whether or not they have properly written down the value of fields, for for example. This is an area where people are really getting there was a push into the process before the eei was involved a year ago but that is coming at it again. There was a push to require the standard of the iti would bring in Climate Risk Disclosure. My skin is chiffon had a connection. They flipped. We are not having this and then the result was, we should sit on the iti side. W which side . This ithis is a multistakehr initiative which involve Civil Society, governments coming companies at the table. There was this flip out and the secretaries of the iti produced a letter in response to the letter that was sent in. The letter that was sent in was extremely well articulated and, frankly, theres no real credible arguments against it. The response was utterly inadequate. It was simply the biggest bully in the block said no. And, unfortunately, for them Civil Society go place at the table. That is the foundation. The argument is not finished. This is going to come back and resurface in these debates will. Continue. The beginning of the Global Project level disclosure mechanism which i think is evere possibility of requiringng ultimately Climate Risk Disclosure which will be a benefit to investors and citizens. With that, ladies andd gentlemen, literally, thank you very much. [applause] thank you. We have a light meal outside afterwards, and we can be here for just a couple of minutes. We will then actually have to go record something very quickly. [inaudible conversations] tonight on cspan2s booktv in primetime looks at president ial history. Now, lawmakers examine Insurance Fraud trends. Members of the Senate Consumer protection subcommittee learned about ways insurers and consumers can protect themselves from these crimes. [inaudible conversations] good mornin e