Agency in Hot Water for Financing Fracking in the Dark

The U.S. International Development Finance Corporation is a public entity that could keep future deliberations out of the public eye, thanks to a Trump era exemption.

The U.S. International Development Finance Corporation included this map in a report on its 2020 activities, saying its s first year was marked by increased investment in low-income countries. (DFC image via Courthouse News)

WASHINGTON (CN) — Showing the receipts for one of the Trump administration’s many gifts to Big Oil, three environmental nonprofits brought a federal complaint Wednesday over a government entity’s recent effort to exempt itself from public meetings law.

The U.S. International Development Finance Corporation published the change last April in the Federal Register, saying there is no need for it to follow a Watergate-era law called the Sunshine Act that requires federal agencies to open every meeting for public observation.  

Referring to itself by an abbreviation, the DFC contends that it can’t technically be considered an “agency” under the Sunshine Act because only four of its nine board members — as opposed to a majority — are appointed by the president.

In Wednesday’s lawsuit, however, the Center for Biological Diversity and other plaintiffs say this assertion is “illogical” because it rests on the premise that “the chief executive of the DFC is somehow ex officio to his own agency.”

A Latin term meaning by virtue of office or position, ex officio refers to members of a board who got these positions by virtue of some other office or position that they hold. While the DFC has four ex officio officers, another four are appointed by the president, according to the complaint, and so the ninth member, who is chief executive officer.

The DFC itself is a recent creation, formed in 2018 through a law that consolidated another agency called Overseas Private Investment Corporation (OPIC) with the U.S. Agency for International Development’s Development Credit Authority.

“Nothing in the legislative history indicates Congress wanted to change course with the DFC and exempt this new agency from the Sunshine Act, as its predecessor agency was subject the Sunshine Act,” according to the complaint filed Wednesday in Washington.

The challengers note that the DFC is pouring billions each year into international contracts with broad ecological implications, like those having to do with fossil fuels and fracking projects in Argentina. They say the rule change means that it no longer faces any obligation to provide communities with information that could later impact their environments and livelihoods. 

The Center for International Environmental Law, a co-plaintiff on the suit, spent years working with communities affected by the Alto Maipo Hydroelectric Project, which Chilean activists argue would threaten the drinking supply of more than 6 million people in the Santiago Metropolitan Region. The OPIC granted $250 million in funding to the project in 2013. 

“For many years, we worked to hold OPIC … accountable,” Carla Garcia Zendejas, the organization’s director of people, land and resources, said in an email, “ensuring that communities affected by the institution were able to secure access to information regarding the institution’s decision-making processes and to utilize the accountability mechanism when adversely affected.”

Groups like the plaintiffs had for years sent staffers to monitor the activities of the two organizations consolidated to become the DFC. Now, however, they now worry that exemption from the Sunshine Act will make it impossible for them to get transcripts, minutes and other records from future meetings. 

Garcia Zendejas emphasized that the DFC’s new exemption “had very practical implications for communities on the ground who are seeking information about the projects that could upend their lives.”

Stephanie Amoako is a senior policy associate with the Accountability Counsel, which advocates for people harmed by the kinds of projects supported by OPIC and the DFC. “The DFC should welcome any opportunity to increase transparency and accountability to the public,” Amoako said in a phone call, “particularly those most affected by the projects.”

The plaintiffs seek a ruling that says the DFC is violating the Sunshine Act, “unlawfully withholding and unreasonably delaying agency action.” Representatives for the DFC did not return a request for comment.

Speaking about his group’s new lawsuit over the phone, Bill Snape, senior counsel for the Center for Biological Diversity, voiced a similar sentiment. “I do think this is an easy one for the Biden administration to settle and do the right thing, and the right thing is to follow the law,” Snape said. “There’s no reason for the agency not to comply, unless you’re the Trump administration and you have things to hide.” 

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