The Humbling of Rex Tillerson
It was inevitable that there was going to be a fair amount of chaos in the early days of the Donald Trump administration. The president is a political neophyte, he surrounded himself with a small clique of advisers who are relatively new to politics themselves, his executive experience comes from running a relatively small private company and, as his tweets show, he is an impulsive guy.
What is a surprise, perhaps, is that the most dysfunctional part of the administration seems to be the State Department. After all, former Exxon Mobil Corp. chief executive Rex Tillerson was brought in precisely because he had excelled at managing one of the world's biggest and most global corporations -- a "Private Empire," to use the title of Steve Coll's remarkable 2014 chronicle of the company.
To gain a bit more insight into Tillerson's makeup, and why he is now struggling, I contacted Coll, who is dean of the Columbia University School of Journalism and a writer at the New Yorker. Before that, he was a managing editor at the Washington Post. He has won two Pulitzers -- one in 1990 for his reporting on the Securities and Exchange Commission and the other in 2005 for his book "Ghost Wars," an exhaustive and gripping account of the collapse of Afghanistan and rise of al-Qaeda. Here's an edited account of the interview:
Tobin Harshaw: In a sense, I think the main "character" of "Private Empire" is Exxon Mobil's corporate culture of discipline, accountability and spreading the gospel of capitalism. Tillerson's management of a corporate giant was his great credential for the job. Yet the state department is a mess: scores of jobs unfilled, mixed in its messaging, undermined by the president. The New York Times reported that foreign ambassadors can't even get phone calls returned from State. Is running a federal bureaucracy that different from running a corporation?
Steve Coll: It really is. Your effectiveness depends on how you motivate a career civil service that may look upon you with a jaundiced eye, and which may not even seem very accountable, compared to a corporate workforce. Also, you have to depend on others to build out your senior team -- you are dependent on the White House to approve nominations, and on the Senate to confirm. There’s an art to organizing these appointments well and quickly given that you may only be in office for four years. This has been a problem across the Trump administration but especially at State because Tillerson had no experience with the process and maybe even more so because the White House has been an obstacle.
TH: Tillerson's other big credential was his knowledge of and friendships within the world of oil exporters. He received a medal from Russian President Vladimir Putin, knows all the top royals in the Gulf, etc. Yet he was apparently blindsided by the Saudi-led punishment of Qatar and the shakeup within the House of Saud. Attempts at rapprochement with Russia have foundered. Why do you think this has been the case?
SC: In the case of Saudi Arabia, the problem is that the kingdom has embarked on a newly aggressive and independent foreign policy, driven by a young crown prince, Mohammed bin Salman, or MbS, who is around 30 years old. This is not yesterday’s Saudi Arabia, and Tillerson’s relationships with the old guard are inevitably somewhat out of date. In any event, Exxon Mobil’s business dealings ran much deeper in the smaller Gulf states, such as Qatar and the United Arab Emirates. As for Russia, whatever vision Tillerson and Trump might have initially shared for resetting that relationship, it has been undone by the F.B.I. and congressional investigations into possible collusion between Russia and the Trump campaign, and the new domestic and international politics those investigations have created.
TH: Conservative thinker Bob Kagan said of Tillerson, "I have a hard time thinking of one who has come in with little foreign policy experience and has less interest in surrounding himself with the people who know something about the regions and issues that he has to deal with." Henry Kissinger and Condoleezza Rice have advised him to lean on the foreign-policy professionals. Has he always disdained "experts"? Can he continue to do so?
SC: Exxon Mobil had a political intelligence operation at headquarters and in the Washington office made up of former diplomats and regional experts that advised management. But it was very data-driven and oriented toward long-range political forecasting. Crisis diplomacy involves a different kind of expertise -- people who have worked on the hard problems like North Korea or Russia before, who understand the complexities of allies and spoilers in a region, and who can advise a principal in more of a rolling, improvisational way. Tillerson and Exxon Mobil did not express a lot of respect for the American Foreign Service before he became secretary; they saw the bureaucracy as bloated and anti-business. He has now evidently met a few ambassadorial-level experts that he respects since arriving, but he hasn’t gotten his arms around the system and made it work for him, again -- partly because he hasn’t been able to fill senior positions.
TH: On the Qatar issue, Tillerson has asked for calm and compromise while Trump is firmly in the Saudi corner. Which one do you agree with? Do you see compromise as a possibility? And what do you make of Saudi Arabia's new king-in-waiting, MbS?
SC: There are no heroes in this story, but the aggression mounted by Saudia Arabia, the U.A.E., Egypt and Bahrain against Qatar is way out of proportion to any offense. The attack on Al-Jazeera and free expression mounted unapologetically by the coalition also offends our values. It may be possible to persuade the coalition to back off in exchange for quiet commitments from Qatar on some of the demands, particularly about financing extremist groups, but I wouldn’t take it for granted. Trying to publicly humiliate your opponent into capitulating is not a great strategy anywhere in the world, but especially not in Arabia. As to MbS, I’m a skeptic, based on the record so far, especially the war in Yemen. Saudi Arabia does need generational change and deep reform and some of his ideas are good ones, but he seems rash and I question whether the reforms needed can be achieved top-down, by a king’s decree.
TH: On that subject, it seems Tillerson is repeatedly foiled by Trump political adviser Steve Bannon and the president's son-in-law, Jared Kushner. Are you surprised that Tillerson, with all his experience, is being outplayed by these relative neophytes? Is it simply that he cannot find a good vibe with Trump?
SC: It’s not really a level playing field. This is an unstable White House with strange habits. The president is used to running things out of a family office with a few loyal retainers, and he has replicated that. Tillerson had no relationship with the president beforehand; he’s not the only one to have been thwarted by this factionalized, family-first White House. Trump does not seem to value formal deliberative process, whereas that is what Tillerson knew at Exxon Mobil, and that is normally where secretaries of state have influence -- around the table in the Situation Room, through the drafting and redrafting of policy documents. Even where there has been prolonged deliberation, such as around whether to leave the Paris climate agreement, Trump is willing to go his own way.
TH: While some oil companies seem to see the writing on the wall that renewable energy sources are the future, Exxon Mobil hasn't invested heavily in those technologies. As Tillerson once put it to shareholders, "We choose not to lose money on purpose." The Barack Obama administration was big on subsidies for alternative energy ventures, while new Energy Secretary Rick Perry this week mocked them. What does Tillerson personally think about the promise of green energy and the threat it poses to Big Oil?
SC: Exxon’s forecasters have been pretty sanguine about the pace at which alternative energy might threaten oil and gas companies. They just don’t see systematic disruptive change coming, although they may be wrong about that in transportation, if the forecasts for relatively rapid transition to autonomous vehicles, often electric ones, come true. They don’t believe in businesses that require subsidies. They don’t believe in energy investments that don’t have huge scale. They see natural gas as a particularly durable business and have shifted their mix toward gas under Tillerson, for a bunch of different reasons, including necessity as oil abroad got harder to find. But the history of so many legacy industries is that they don’t see it coming. It was true of the horse carriage business, the newspaper business and the coal industry. I suspect it will be true too of Big Oil.
TH: I'll end with two observations. First, while many titans of industry focus their philanthropy on the arts, university chairs and other glamour projects, Tillerson's cause is the Boy Scouts. Second, at Exxon, he was an "upstream" guy, an executive who focused on finding new oil and cutting deals with producing countries, as opposed to a "downstream" guy, like U.S.-based executives who dealt with less-profitable, less-risky endeavors like refining and retail sales to drivers. Taken together, what do these tell us about his character and worldview?
SC: I see him as a fairly conventional chamber of commerce Republican, influenced some by the libertarian, anti-government strains of radicalism in modern conservative thought, especially common down in Texas, which is where he’s always lived. From what I know, he has lived the Boy Scout and Christian values that he promotes, albeit while enjoying great privilege and slipping into the inevitable bubble that comes with being the CEO of a gigantic global corporation. It’s hard to avoid a certain amount of hubris when you have that degree of business leadership success, and unfortunately, I think he may have overestimated his ability to make this transition to government. As to his world view, oil executives value geopolitical stability, so I think his instincts run in that direction, but I’ve been pleased to see him speak out occasionally about human rights, academic freedom and American values. Maybe he’ll make something of this position yet.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the editor responsible for this story:
Philip Gray at email@example.com