Exxon chief in running for State
Tillerson’s global ties could raise conflict questions
WASHINGTON — After negotiating with Arab sheiks and Russian oligarchs, and drilling in some of the world’s most remote and war-torn regions, Exxon Mobil CEO Rex Tillerson’s candidacy to be the next U.S. secretary of state is drawing fresh scrutiny.
The 64-year-old Tillerson met with Presidentelect Donald Trump in New York on Tuesday, putting his name on a list that includes former presidential candidate Mitt Romney, David Petraeus, the former
CIA director, and former New York Mayor Rudy Giuliani. A Texas native with no government experience, Tillerson offers a résumé that is heavy on international deal-making but could also raise potentially thorny questions around conflicts of interest.
For instance, in 2011, Tillerson signed a potentially lucrative deal with Russian state-owned gas company Rosneft to drill in the Russian Arctic. But after Russian troops entered neighboring Ukraine, the United States and the European Union imposed sanctions on Russia in 2014 that forced Exxon to halt the project.
Exxon still retains the drilling rights to more than 60 million acres in Russian waters, according to a financial filing earlier this year. Trump already has expressed an affinity for Russian President Vladimir Putin, and if Tillerson were selected to head the State Department he would be in a position to lift those sanctions.
“Historically, there have been plenty of people from the business world appointed to Cabinet positions,” said Jordan Libowitz, communications director at the advocacy group Citizens for Responsibility and Ethics in Washington. “The issue here is that Exxon is very involved in international business. They drill all over the world. Even if he completely severs his ties, would he be making deals with them in mind?”
Ethics experts say Tillerson would likely need to sell off holdings perceived to be in conflict with his role at the nation’s top diplomat, as Goldman Sachs CEO Hank Paulson did when he was picked to be treasury secretary by former President George W. Bush. That could include Tillerson’s stock in Exxon, which was valued at $145 million in a filing with the U.S. Securities and Exchange Commission in April.
UT grad, outsider A Washington outsider who remains a passionate advocate for the Boy Scouts of America, Tillerson joined Exxon in 1975, shortly after graduating from the University of Texas.
He rose through the ranks, eventually leading oil and gas projects in locales including Yemen and Russia where he earned a reputation as a pragmatic dealmaker, well versed in the nuances of the countries in which he operated. He was named CEO in 2006, succeeding Lee Raymond.
“He travels the world because of his corporate responsibilities, and interacts with heads of state everywhere. He is a wise and thoughtful man about the broad range of issues that America would face,” John Hamre, president of the Washington think tank
Center for Strategic and International Studies and a long-time confidant of Tillerson, said in an email.
So far, Tillerson, a native of Wichita Falls, has kept quiet on his possible nomination to the nation’s highest diplomatic post. A spokesman for Exxon declined to comment Tuesday.
Tillerson is understood to have developed a solid working relationship with Putin, going back to his days leading Exxon interests in Russia and the Caspian Sea in the 1990s. In 2013, Putin awarded Tillerson one of Russia’s highest honors for foreigners, the Order of Friendship.
Tillerson has been at the forefront of an ongoing international debate around climate change. Backing off the hard-line approach of his predecessors, Tillerson acknowledges man-made climate change is real but has questioned the economic costs of shifting society away from fossil fuels.
“What good is it to save the planet if humanity suffers,” Tillerson said in 2013.
This past year Exxon surprised some critics when it approached lawmakers in Washington to offer its support for a carbon tax.
Environmentalists wary Still, the speculation around Tillerson as head of the State Department has riled many environmentalists, who argue he would roll back the Obama administration’s actions to reduce carbon emissions.
“This is certainly a good way to make clear exactly who’ll be running the government in a Trump administration — just cut out the middleman and hand it directly to the fossil fuel industry,” Bill McKibben, co-founder of 350.org, said in a statement.
Were Trump to select Tillerson, he would be breaking with past presidents, who have tended to select secretaries of state from the worlds of government — James Baker III and John Kerry — and academia — Henry Kissinger and Condoleezza Rice.
Business executives like Tillerson have been awarded Cabinet roles including treasury secretary and interior secretary, but the State Department has historically been viewed as requiring a different skill set, said Jim Kramer, a senior fellow at Rice University’s Baker Institute for Public Policy.
“The State Department does get involved in promoting U.S. economic interests abroad. But that’s a small part of what they do. They have a diverse set of interests,” he said. “Diplomacy is quite a bit different than business.”
Exxon’s track record under Tillerson’s watch is likely to get plenty of scrutiny from Democrats in the U.S. Senate if he is nominated for secretary of state.
In 2001, a group of Indonesian villagers filed a lawsuit against Exxon, claiming soldiers hired to guard the company’s natural gas operations there had committed human rights abuses. For more than a decade, Exxon’s attorneys have fought to dismiss that litigation. Last year, a U.S. federal court ruled the villagers’ case could proceed.