Dispatch March 6, 2018

Time For a Closer Look At Rex Tillerson

Two things this week brought Rex Tillerson back into the spotlight in a big way:

  • In her profile of Christopher Steele, Jane Meyer reported that Steele had found and subsequently informed Robert Mueller that the Kremlin intervened to deter Trump from appointing Mitt Romney to Secretary of State. Steele relays that the Kremlin asked Trump “to appoint someone who would be prepared to lift Ukraine-related sanctions.”
  • Tillerson’s State Department has not spent any of $120 million allocated to fight Russian influence operations. And he said he’s not even going to try: “If it’s their [Russia’s] intention to interfere, they’re going to find ways to do that.”

Trump chose Rex Tillerson for the job, seemingly out of the blue, as the then-CEO of Exxon. Tillerson had never served in government before, had not even met Trump before the election, and was not on anyone’s radar as a possible Secretary of State.

But Tillerson did have two distinguishing features: he was close to Russia (having negotiated a massive oil deal with Russia’s state oil company), and he opposed sanctions on Russia.

How was Tillerson was selected to be America’s top diplomat, a position he has said he never wanted?

The Romney drama timeline fits with the Trump transition team’s meetings with the Russians.

  • November 19-20, 2016: Romney met with Trump over position of Secretary of State. Pence confirms that Romney is under “active consideration” to be Secretary of State.
  • Late November 2016: Christopher Steele prepared a memo sourced to “a senior Russian official” saying that word in the Russian Ministry of Foreign Affairs was that the Kremlin had blocked Trump’s initial pick of Romney and pushed someone who would be prepared to lift sanctions.
  • December 1, 2016: Russian Ambassador to the US Sergei Kislyak met with Kushner and Flynn at Trump Tower.
  • December 6, 2016: Exxon CEO Rex Tillerson met Trump and emerged as “long-shot” possibility to be Secretary of State.
  • December 10, 2016: Trump picked Tillerson to be Secretary of State.
  • Romney’s hawkish position on Russia has been well documented; it is therefore easy to understand why the Kremlin would have been alarmed at the prospect of his nomination.

Tillerson had a long-standing relationship with Russia, as he oversaw one of the largest oil deals in history between ExxonMobil and the now-sanctioned Russian oil giant Rosneft. Many of the deals he helped negotiate were jeopardized by the 2014 sectoral sanctions.

  • According to Steven Coll’s book Private Empire: ExxonMobil and American Power, the close relationship between Tillerson and Russia was a key reason he was chosen as CEO in 2006.
  • Tillerson’s dealings in Russia stretch back at least two decades. In 1998, a Russian agreement named him president of Exxon Neftegaz Limited, a Bahamas-registered subsidiary of ExxonMobil responsible for development of the Siberian Sakhalin-I oil and gas venture.
  • He has met with Putin numerous times, including in June 2012, when Putin praised the Exxon-Rosneft deal, and in 2012, when a video showed the two toasting to the deal.
  • In 2011, while at the helm of ExxonMobil, Tillerson engaged in a joint venture with Rosneft that allowed Rosneft access to ExxonMobil’s North American projects, giving it 30% stakes in projects in Texas, Alberta, and the Gulf of Mexico.
  • According to Russian officials, this was a $500 billion deal, the largest of its kind between Russia and a foreign oil company.
  • It was put on hold after sanctions, creating a barrier between Tillerson and Rosneft. The sanctions may have also impacted Tillerson’s relationship with Rosneft CEO Igor Sechin, who lamented that he would no longer be able to travel to the U.S. to take motorcycle rides with Tillerson.
  • Tillerson, as head of ExxonMobil, actively opposed U.S. sanctions against Russia.
  • ExxonMobil flouted sanctions under Tillerson’s leadership. It reportedly lost $1 billion by October 2016 due to Russia sanctions. In July 2017, the U.S. Treasury rebuked ExxonMobil and fined them $2 million because its executives signed eight documents with Sechin, just weeks after he was sanctioned.

Actions by this administration appear designed to appease Russia.

  • Shortly after taking office, the Trump administration tried to lift all Russia sanctions, but backed down after opposition from career officials and Congress.
  • The Trump administration, and particularly Tillerson’s State Department, refused to implement new sanctions on Russia mandated by Congress.
  • The State Department’s Global Engagement Center to fight Russian disinformation has spent $0 of its $120 million grant and has been effectively shuttered.
  • Michael Rogers, head of the NSA and Cyber Command, told Congress that he has received no orders to counter Russian cyber actions and he cannot act without them.

Why is Rex Tillerson Secretary of State—and what else is Russia getting out of it?