New York: US President-elect Donald Trump has chosen Exxon’s Multimillionaire CEO Rex Tillerson over other probable candidates like Mitt Romney and former New York City mayor Rudy Giuliani, as his Secretary of State. Trump tweeted about his choice on Saturday:
I have chosen one of the truly great business leaders of the world, Rex Tillerson, Chairman and CEO of ExxonMobil, to be Secretary of State.
— Donald J. Trump (@realDonaldTrump) December 13, 2016
The President-elect further went onto justify his decision by saying that Tillerson has “vast experience at dealing successfully with all types of foreign governments.”
While stocks for ExxonMobil shot up on Monday as the news of spread, the decision also generated much controversy and criticism from various quarters.
A native of Texas, the 64-year old Tillerson joined Exxon, world’s 6th largest company by revenue, after graduating from the University of Texas in 1975 with an engineering degree. He spend many years working in Exxon’s central US, Yemen and Russian operations. By 1989 Tillerson became general manager of the central production division of Exxon USA and in 1995, he became President of Exxon Yemen Inc. and Esso Exploration and Production Khorat Inc. With the merger of Exxon and Mobil, he became executive vice president of ExxonMobil Development Company, and in 2004 became its president and director.
Ties with Russia
It is Tillerson’s Russia connection that has come up for scrutiny and questioning by critics. In the 1990s he played a key role in Exxon’s involvement in the huge Sakhalin oil and natural gas project on Russia’s eastern coast. During the course of this Tillerson is said to have developed very close ties with Vladimir Putin.
As CEO, Tillerson ensured a partnership between Exxon with Russian state-controlled oil company Rosneft for a $US3.2 billion deal, in which they decided to explore oil in Russia’s Arctic regions. President Putin was personally present during signing of the deal in 2011 in the resort town of Sochi. Observers say Exxon expanded steadily while its rivals faced regulatory obstacles.
In 2013 Putin awarded Tillerson the Order of Friendship, an honor given to foreigners who improve relationships with Russia. Acknowledging his close ties to Kremlin, the ExxonMobil CEO had said in a speech at the University of Texas-Austin few years ago, “My relationship with Vladimir Putin dates back almost 15 years now, I’ve known him since 1999 and have a very close relationship with him.”
Russia’s invasion of Crimea and the subsequent international sanctions in 2014 halted much of Exxon’s activities in the Arctic region and Tillerson became a vocal proponent of lifting sanctions against Russia.
Tillerson had urged Western leaders “to consider the very broad collateral damage of who are they really harming with sanctions.”
He further said, “We do not support sanctions, generally, because we don’t find them to be effective unless they are very well implemented comprehensively and that’s a very hard thing to do.”
Apart from Russia, Tillerson has also done business with autocratic regimes in Angola and Chad. He also led Exxon into Iraq’s Kurdistan region against the wishes of Baghdad and the State Department.
In 2010 Tillerson had said that he acknowledged that human activity is changing the climate through greenhouse gas emissions, but real extent of the damage is not yet clear. He has also stated that the world will continue to use fossil fuels, whether we like it or not. He had added, “There is not a model available today that is competent” for understanding the science and predicting the future.
Exxon is currently under investigation for misleading public about the threat of global warming since the 1970s. The company had allegedly conducted research on climate change and while at the same time funding groups that doubt climate change. A 2014 report by ExxonMobil, which is being investigated, states that global efforts to address climate change does not imply that it had to leave oil reserves in the ground as “stranded assets”.
These investigations and environmental scrutiny is known by the hashtag #ExxonKnew.
However, Tillerson supports carbon tax and is on record saying that it is the most efficient way of reflecting the carbon cost of all economic decisions.
Conflict of Interest
In 2015 Exxon valued Mr Tillerson’s compensation at $US27.3 million, most of it in stock. If he is confirmed by Congress as Secretary of State, he would have to either sell his Exxon shares and stock options or recuse himself from government matters.
However, there is previous precedent for a high-profile businessman to serve as Secretary of State. When President Ronald Reagan picked George Shultz as Secretary of State and Caspar Weinberger as Secretary of Defence, both were working as top executives for an San Francisco based engineering firm, Bechtel.
Critics had alleged that Shultz had his own interests in mind when it came for foreign policy rather than those of the Government of US.