Politics & Government

Donald Trump’s newest secretary of state option has close ties to Vladimir Putin

Trump's White House

President-elect Donald Trump is shaping his White House staff. Here's a look at the individuals he's offered positions to.
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President-elect Donald Trump is shaping his White House staff. Here's a look at the individuals he's offered positions to.

Donald Trump’s secretary of state search has morphed into an extended courtship of former presidential candidates, senators and a general who admitted to spilling classified information.

But the president-elect may buck convention and nominate a private-sector Texan who leads the world’s largest private oil and natural gas company to lead the State Department.

On Tuesday morning, Trump met with Exxon Mobil Corp. CEO Rex Tillerson, a lifelong North Texan who was born in Wichita Falls and lives in Bartonville.

Tillerson brings an extensive resume of working with foreign governments over oil and gas contracts, and his company is aware of shifting tides in international affairs that could impact its bottom line.

“Rex Tillerson is a known and respected quantity in oil-producing countries,” said Jim Krane, an expert on energy geopolitics at Rice University’s Baker Institute for Public Policy. “He’s got foreign business and impressive negotiation skills, but that’s a different matter than conducting foreign policy.”

Tillerson’s business and negotiation skills have put him in close contact with a widely discussed figure in Trump’s election — Russian President Vladimir Putin.

If Trump really wanted to pursue his campaign goals of bettering U.S. relations with Russia, (Exxon CEO Rex) Tillerson would be someone who could probably carry that out. He’s on pretty good terms with Russia.

Jim Krane, an expert on energy geopolitics at Rice University’s Baker Institute for Public Policy

Putin’s association with Tillerson goes back to the 1990s, when Tillerson ran Exxon’s Russian operations. In 2013 the Russian president awarded Tillerson the Order of Friendship, one of Russia’s highest honors for foreigners.

“Anything Trump and Exxon do is going to be controversial,” Krane said. “If Trump really wanted to pursue his campaign goals of bettering U.S. relations with Russia, Tillerson would be someone who could probably carry that out. He’s on pretty good terms with Russia.”

Exxon spokesman Alan Jeffers declined to comment. Tillerson was not spotted by press assembled in the Trump Tower lobby, but his transition team confirmed the meeting happened this morning.

But Krane said that Exxon’s interests of remaining profitable in a rapidly changing economy can sometimes diverge from U.S. foreign policy interests, as was the case in 2015 when U.S. sanctions related to Russia’s support of Ukrainian rebels scuppered a potential $97 billion Exxon oil find in Siberia.

“If you think about places around the world where Exxon operates, there are often places with a lot of political risk with governments that are at odds with us,” Krane said. “Exxon cannot go to countries under embargo but it can go to places of strategic competitors like Russia and China.”

Exxon is known for its long-term strategic planning. The company called for a tax on carbon beginning in 2009 and its scientists researched the effects of climate change beginning in 1986, although the company publicly questioned climate change for years while quietly preparing internal infrastructure for rising sea levels.

Putin’s association with Tillerson goes back to the 1990s, when Tillerson ran Exxon’s Russian operations. In 2013 the Russian president awarded Tillerson the Order of Friendship, one of Russia’s highest honors for foreigners.

But it’s not immediately clear where Tillerson, who donated just over $110,000 to Republicans during the 2016 election cycle, would stand on divisive foreign policy flashpoints that don’t involve big oil producers – such as intervention in Syria.

“Previous secretaries of state have had strategic frameworks in their minds about international relations, be it realism or constructivism,” Krane said. “Tillerson, I don’t know what his educational background is or his schooling in international relations consists of, or if he has he had formal training.”

Tillerson’s lack of formal diplomatic or political experience would be unprecedented for a secretary of state in modern times. Private-sector leaders like Goldman Sachs CEO Hank Paulson have made the jump into Cabinet positions, but the role of secretary of state has gone to former politicians, diplomats or academics.

And Tillerson’s nomination would raise the same conflict of interest questions that have dogged his potential boss since winning the election: How could Tillerson be objective on U.S. foreign policy just months removed from leading an entity with significantly different interests?

“As secretary of state, you’ll have to look at Exxon’s global holdings around the world in myriad countries,” Krane said. “On the one hand America would benefit with someone who’s got those relationships, but there would certainly be some conflict-of-interest question marks. Does he divest or leave his job?”

Tillerson owns $151 million in Exxon shares, according to securities filings, a financial windfall that could be impacted if sanctions against Russia are lifted.

“We’ve seen this before (with) Dick Cheney,” Krane said. “If you remember there were questions surrounding Dick Cheney as vice president and overseeing U.S. energy policy.”

Cheney was the CEO of oil and gas giant Halliburton from 1995 to 2000 while President Bill Clinton was in office, although he did serve as a congressman and secretary of defense prior to working in the private sector.

“It’s not a new paradigm for a Cabinet member to come from the private sector, but it’s new for secretary of state,” Krane said.

Tillerson amassed $27.3 million in total compensation in 2015, a decline of 18 percent from his 2014 compensation amid Exxon’s falling profits. He is set to retire from Exxon next year.

Correction: A previous version of this story indicated that Tillerson lived in Irving. Property records indicate he lives in Bartonville.

Alex Daugherty: 202-383-6049, @alextdaugherty

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