On Tuesday morning, President-elect Donald Trump confirmed the rumors that ExxonMobil CEO Rex Tillerson would be his choice for secretary of state. Tillerson, 64, is a lifelong employee of the energy giant and was described by Trump as “one of the truly great business leaders in the world.”
He is also one who has close business ties to Russia and to its president, Vladimir Putin.
“He will promote regional stability and focus on the core national security interests of the United States,” Trump said in a statement. “Rex knows how to manage a global enterprise, which is crucial to running a successful State Department, and his relationships with leaders all over the world are second to none.”
Tillerson’s role as the head of ExxonMobil essentially made him the head of a large international force independent from the U.S. government. In the book “Private Empire: ExxonMobil and American Power,” journalist Steve Coll wrote about how the massive company had its own foreign policy, dedicated to maximizing shareholder returns.
Coll summarized the ExxonMobil position in a New Yorker story Sunday:
The goal of ExxonMobil’s independent foreign policy has been to promote a world that is good for oil and gas production. Because oil projects require huge amounts of capital and only pay off fully over decades, Tillerson has favored doing business in countries that offer political stability, even if this stability was achieved through authoritarian rule.
As one example of ExxonMobil’s foreign entanglements, the company began pumping oil in the African nation of Chad in 2003, working closely with its authoritarian president, Idriss Déby, who has ruled since 1990 and has been described by Foreign Policy magazine as a “paranoid tyrant.” Chad has issued a $74 billion fine to Exxon in a dispute over the royalties from that deal, a number that is five times the country’s GDP.
Coll also has detailed how Exxon circumvented U.S. policy in the Middle East:
In Kurdistan, during the Obama Administration, Tillerson defied State Department policy and cut an independent oil deal with the Kurdish Regional Government, undermining the national Iraqi government in Baghdad. ExxonMobil did not ask permission. After the fact, Tillerson arranged a conference call with State Department officials and explained his actions, according to my sources, by saying, “I had to do what was best for my shareholders.”
“My philosophy is to make money,” Tillerson said in a 2013 interview with Charlie Rose when he was asked whether his philosophy was “Drill, baby, drill.” “And so if I can drill, and make money, then that’s what I want to do. But it really is, for us, it’s about making quality investments for our shareholders, and it’s not a quality investment if you cannot manage the risk around it.”
But most of the focus in Tillerson’s confirmation hearings will likely be on his dealings with Russia, a relationship that caused Sen. Marco Rubio — a member of the Foreign Relations Committee, which will preside over the oil CEO’s confirmation hearing — to announce that he has “serious concerns about his nomination.”
Tillerson’s dealing with Russia go back to 1998, when he was put in charge of Exxon operations there and in the Caspian Sea, after serving as president of Exxon Yemen Inc. He rose to CEO in 2006, and five years later he took steps to further the company’s relationship with Russia, striking a deal with Rosneft, the state-owned oil giant. The deal gave Exxon the opportunity to explore for oil in the Arctic Sea and Siberia while giving Rosneft access to fracking technology and Exxon holdings in Texas and the Gulf of Mexico. The head of Rosneft, Igor Sechin, is one of Putin’s top lieutenants.
The signing of the deal was attended by then-Prime Minister Putin, who personally awarded Tillerson the Order of Friendship in 2013. The award is given to citizens of foreign countries for “special merits in strengthening peace, friendship, cooperation and understanding between peoples” and for contributions to mutual enrichment of cultures, large-scale economic projects and/or extensive charity work.
The deal was put on hold in 2014 after Russia annexed Crimea, which brought sanctions from the United States and the European Union on certain types of business deals with the county, including with Rosneft.
“We are very anxious to get back to work there,” said Tillerson at an Exxon analyst panel in March of their deal with Russia. “It’s a really an interesting, exciting area. We are very interested to get back to work in the deepwater Black Sea.”
“They understand the situation. We understand the situation,” continued Tillerson. “We are going to remain in full compliance with the sanctions. I’ll tell you, we are in constant conversation with the U.S. government around ensuring that we are able to protect our rights in Russia while we have to stand still, and they’ve been very supportive of that. So I’m thankful that they have never done anything to try and make the situation worse. In fact they’ve done things to help us hang on to the rights we have. We’ve been through sanctions in countries before, and that’s something governments have to work out. We would just like to make sure we can maintain our position, and when a new time comes, we are ready to go back to work.”
In addition to his Russia ties, Tillerson is being targeted from the right for his support of the Common Core education program and for allowing gays into the Boy Scouts. (Tillerson, a former Eagle Scout, served as president of the Boy Scouts of America from 2010 to 2011 and was a member of the board in 2013 when the ban on gays was lifted.) Tillerson and Exxon have also been attacked for donations to Planned Parenthood, but the company has said it was just following its policy in matching donations from employees.
Former Secretary of State Condoleezza Rice and Secretary of Defense Robert Gates have both come out in support of the Tillerson pick. They both work for Exxon through their international consulting firm, Rice Hadley Gates. James Baker, secretary of state under President George H.W. Bush, also came out in favor of Tillerson. He is a partner at a law firm that has represented both Exxon and Rosneft.
“I am honored by President-elect Trump’s nomination and share his vision for restoring the credibility of the United States’ foreign relations and advancing our country’s national security,” Tillerson said in a statement released after Trump’s announcement Tuesday. “We must focus on strengthening our alliances, pursuing shared national interests and enhancing the strength, security and sovereignty of the United States.”