Tillerson Challenge Is Showing Senators He’s More Than Big Oil

  • Senators will zero in on Tillerson’s Russia-Exxon connections
  • Secretary of state nominee will be pressed on Trump’s views

Trump's Top Diplomat Comes With Love From Russia

Rex Tillerson helped seal multibillion-dollar deals from Venezuela to Russia as Exxon Mobil Corp.’s CEO. Now senators weighing his nomination for secretary of state will want to know if he can be as effective working for the U.S. -- even when it conflicts with the interests of “Big Oil.”

Tillerson’s business background, and lack of experience in government, is unprecedented for someone in line to become America’s top diplomat. Heading into his confirmation hearing Wednesday, he faces questions about his business links to Russian President Vladimir Putin, and will be pressed to answer for -- or disavow -- President-elect Donald Trump’s own call for warmer relations with the Russian leader.

Rex Tillerson

Photographer: Andrew Harrer/Bloomberg

“My No. 1 question to him was about how he intends to make that transition, how clearly he sees the difference,” Senator Chris Coons, a Delaware Democrat, told reporters last week of the shift Tillerson would need to make after 41 years at Exxon, the world’s largest energy company by market value. “I am as concerned, if not more concerned, about what the president-elect’s views are going to be -- the centrality of NATO to our security, the importance of pushing back on Putin and Russia,” he said after meeting with Tillerson.

Tillerson, 64, embodies Trump’s argument that what government needs is an eye for cutting deals -- or shredding them -- even if that means overturning decades of conventional wisdom in foreign policy. In 2007, the Exxon chairman and chief executive officer halted new investment in Venezuela after then-President Hugo Chavez announced plans to nationalize an oil field. And in 2011, he signed an exploration contract with leaders of Iraq’s Kurdistan region, riling the central government in Baghdad and the State Department he’d now lead.

Read Tillerson in his own words -- past statements on key issues.

While Tillerson comes from outside the foreign policy establishment, he has the backing of some big names, including former Defense Secretary Robert Gates, who suggested his name to Trump in November, and Stephen Hadley, who was President George W. Bush’s national security adviser. Both are partners in a consulting firm that has worked for Exxon.

“He has a wealth of experience all over the world that will be very useful to the president-elect, and he has contacts and relationships all over the world that he will be able to use on behalf of the new administration,” Hadley said in an interview. “He’s also got experience managing a large, far-flung organization, and that of course is what the State Department and foreign service are.”

Read about Trump’s strong hand in confirmations -- QuickTake Q&A

While Democrats alone don’t have the numbers to block Tillerson’s nomination, Trump is counting on support from people like Hadley to help his choice clear some of the thornier questions during the hearings before the Senate Foreign Relations Committee -- starting with the Russia connection.

Order of Friendship

Tillerson was awarded Russia’s Order of Friendship in 2013, after helping establish Exxon’s presence in Russia in the 1990s. In 2011, Putin personally presided over the signing of a deal between Exxon and state-owned oil giant Rosneft that gave the U.S. company access to potentially tens of billions of barrels of oil in Arctic deposits. That work was frozen by U.S.-ordered sanctions in 2014 to punish Russia for its annexation of Ukraine’s Crimea region.

In 2016, Exxon provided input to congressional aides -- requesting details and answering questions -- on legislation that would have made it harder for the next president to lift the sanctions against Russia that halted Exxon’s Arctic drilling, company spokesman Alan Jeffers said.

While Exxon never took a position for or against the bill, according to Jeffers, involvement in that proposal could raise new questions about the company’s relationship with Russia and whether Tillerson can be truly independent as he helps oversee the sanctions that remain in place against Russia. Several senators, including some who serve on the Foreign Relations panel such as Republican Marco Rubio of Florida, want to impose new sanctions against Putin.

In advance of the confirmation hearing, the left-leaning Center for American Progress released a report saying Exxon could gain up to $1 trillion in benefits from Trump’s administration in the coming years.

‘Intrinsically Conflicted’

“It’s hard to think of any other cabinet nominee in recent history that’s had the level of financial conflict going into that position,” said Matt Lee-Ashley, a senior fellow at the Center for American Progress and one of the authors of the report. “He is just intrinsically conflicted by virtue of his background.”

During the first nine months of last year, the energy giant spent more than $32,000 a day, on average, to weigh in on dozens of bills before Congress and represent its interests before federal agencies, an analysis of disclosure filings organized by Bloomberg Government shows.

A related concern is any conflict of interest posed by Tillerson’s departure from Exxon. He would, if confirmed, sell about $55 million of Exxon shares he owns. The company would also pay about $180 million in lieu of more than 2 million restricted stock awards that haven’t vested yet. That cash would be paid into an independently operated trust. Tillerson also agreed not to participate in any decisions involving Exxon for a year.

Read more about Tillerson’s Exxon payout and his ethics plan.

Another issue is his view on climate change. Tillerson has spoken publicly in favor of the Paris climate agreement to limit carbon emissions, and acknowledged in 2012 that increasing carbon emissions will have “a warming impact.” At the same time, he said he believes the consequences are “manageable.”

Tillerson’s backers describe him as a man without any hidden agendas, who’s keen to delegate rather than amass power. During his 11 years as Exxon’s CEO, Tillerson entrusted key business lines such as crude exploration, refining and chemicals to a handful of lieutenants who were responsible for overseeing those operations. 

A Boy Scout

Tillerson, who joined Exxon in 1975 straight out of college and was elevated to chairman and CEO in 2006, represented a sea change from his predecessor, the brusque, imperious Lee Raymond. Faced with harsh criticism from activist investors over climate change at the company’s shareholders’ meetings every May in Dallas, Tillerson typically heard them out, thanked them for making the trip, and then patiently explained Exxon’s stance in his booming baritone with its Texas drawl. 

In 2013, he quietly used his influence as a past president of the Boy Scouts of America to help end the group’s long-standing ban on gay scouts. An Eagle Scout himself, Tillerson has repeatedly told audiences that church and the Boy Scouts were among his greatest influences as a child.

Tillerson really is what he seems -- a Boy Scout who until his recent retirement ran an oil company, in the view of people who worked closely with him at Exxon.

A big question for Tillerson, and the senators vetting him, will be how he’d manage his new boss Trump -- and how much influence he’d have over the foreign policy vision of a president who has said he’ll produce a tougher nuclear deal with Iran, that he might send his son-in-law to help negotiate a Middle East peace and has questioned the U.S.’s responsibility to defend other members of NATO if they fail to spend more on defense.

Tillerson also would have to compete for Trump’s ear with retired generals Michael Flynn, the national security adviser, and James Mattis, the nominee for defense secretary.

“Trump was obviously impressed by him,” Christopher Hill, former assistant secretary of state for East Asian and Pacific affairs, said in an interview. “But I think a successful secretary of state has to have a close relationship with the president, and that hasn’t yet been demonstrated.”

— With assistance by Rosalind Mathieson, John McCormick, and Margaret Talev

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