Rex Tillerson pervasive potential conflicts of interest: For Donald Trump's top diplomat, questions loom large

Rex Tillerson, named by Donald Trump as his pick for secretary of state, has spent his four-decade career with oil giant ExxonMobil, of which he has been chairman and CEO since 2006. Tyson Slocum — director of the energy program at Washington's consumer-rights advocacy Public Citizen — believes the Texan would find it virtually impossible to cut his longstanding ties to his employer in a governmental post and avoid conflicts of interest over the multinational company with operations in some fifty countries including Russia.

What conflicts of interest could arise?

Tyson Slocum: "It's not just about him owning stocks. It's unclear whether he can adequately divest all of that. Tillerson only has one employer on his resume, Exxon, he's worked there more than 40 years, it's the only real job he's ever known.

"Extractive industries often have to obtain close personal financial and political ties with a number of questionable governments in order to get access to a nation's natural resources. So Tillerson has been very aggressive in establishing close ties with countries and situations that have often been directly at odds with US interests

"Being the CEO should not automatically disqualify one from a cabinet position. But the oil and gas company is very unique... Exxon has essentially operated as a type of independent fiefdom, negotiating deals with foreign governments, and so that's a problem."

What's the risk for US interests?

Slocum: "When you look at his role in Russia... Tillerson had at least 20 White House visits to talk about sanctions. He's publicly said that he does not believe that sanctions are an effective tool because that's his view as a corporate CEO, that sanctions restrict the economic opportunities.

"This isn't just about Russia, this is about Iran, this is about any sort of dictatorship in Africa or Asia. The question is what is Tillerson's role going to be?"

If he sold his shares, would that help alleviate his conflicts of interest?

Slocum: "He's a senior executive who owes his entire fortune to Exxon. How do you financially dissociate yourself from that? (...) You can't put (your stocks) into a blind trust, because you know where the money is. Blind trusts work when you have a diversified economic portfolio.

"When he leaves, there's going to be a golden parachute waiting for him. I don't know all the details of his pension, but he's going to have a lifetime pension. You can't blind trust that.

"Even assuming he can fully financially divest himself, he's conflicted, there are too many conflicts of interests. Because his responsibilities at Exxon inserted him into a number of different international relationships that often were at odds with US interests.

"So when he is going around the world as US secretary of state, there are going to be questions as to what interests exactly he will be pursuing."

 Rex Tillerson pervasive potential conflicts of interest: For Donald Trumps top diplomat, questions loom large

In this file photo Russian President Vladimir Putin with Rex Tillerson, Trump's nomination for US Secretary of State. AP

Trump defends diplomat pick Tillerson against critics

Donald Trump defended his nomination of Tillerson as America's next secretary of state, dismissing concerns about the oilman's ties to Russia and saying US foreign policy needed a new direction. The nomination, which capped weeks of debate about the right candidate, was the most keenly awaited in Trump's cabinet as the world waits to see how the incoming Republican president intends to alter US foreign policy.

Trump has stoked alarm among Democrats and fellow Republicans ahead of his 20 January inauguration by calling for closer ties with Moscow, in contrast to received wisdom in Washington that Russia remains a global security threat. That sentiment — coupled with the fact that Trump is at loggerheads with some Republican senators over a CIA assessment that Russian hackers helped him win the election — may complicate Tillerson's confirmation hearings.

Trump, who announced the nomination early Tuesday, hailed Tillerson as a "great diplomat" and "one of the greatest and most skilled global business leaders of our time" at a campaign-style rally Tuesday night in the traditionally Democratic-leaning state of Wisconsin that helped elect him. The 64-year-old Texan, who has no experience in government and spent his entire career at Exxon, "has the insights and talents necessary to help reverse years of foreign policy blunders and disasters," Trump told the crowd.

But politicians on both sides of the aisle have expressed concerns over Tillerson's ties to Russia. The businessman was awarded Russia's Order of Friendship by Vladimir Putin in 2013 and has publicly opposed sanctions on Moscow that thwarted his attempt to pursue huge oil deals in the Russian Arctic. The Kremlin welcomed his nomination with an aide praising him as a "very solid figure" with whom Putin and Russians have "good, business-like relations."

President-elect Donald Trump. AP

President-elect Donald Trump. AP

Putin's friend?

"Rex is friendly with many of the leaders in the world that we don't get along with and some people don't like that," Trump told the crowd in West Allis, without mentioning Russia or Putin. "They don't want him to be friendly. That's why I'm doing the deal with Rex, because I like what this is all about," he added.

"We need a new direction," said Trump. "Instead of jumping recklessly from one intervention to another, my administration will build a long term strategy for stability, prosperity, peace, and rebuilding our own country." A series of establishment Republicans, including former secretaries of state Condoleezza Rice and James Baker, and former defense secretaries Donald Rumsfeld and Robert Gates have lined up to praise Tillerson.

Tillerson joined ExxonMobil in 1975 as an engineer, before rising to become president and chief executive, overseeing business activities in more than 50 countries. Appointed CEO in 2006, he had been due to retire in March. But his lack of formal policy and government experience, and embedded relationship with a hugely powerful energy company is bound to result in sharp questions in the Senate confirmation hearings.

Senior Republican Senator John McCain has called Tillerson's ties to Putin "a matter of concern." "Vladimir Putin is a thug, bully and a murderer, and anybody else who describes him as anything else is lying," McCain has said.

Senator Marco Rubio, a former Trump rival for the Republican White House nomination, tweeted: "Being a 'friend of Vladimir' is not an attribute I am hoping for from a #SecretaryofState." McCain and other senators have backed a congressional probe into intelligence assessments on Russian election interference, putting top Republicans on a collision course with Trump, who dismissed the reports as "ridiculous".

Business controversy

If confirmed, Tillerson will face the hugely sensitive job of representing overseas a president apparently intent on trashing protocol and upending relationships built on decades of delicate diplomacy. Beyond thorny ties with Russia, Sino-US relations are strained after a series of moves by Trump that provoked China, the world's second-largest economy, and controversy is also rife over his global business empire.

Trump postponed a press conference originally set for Thursday at which he was to unveil plans for separating himself from his global business dealings, instead writing on Twitter that his adult sons would manage the company. The 70-year-old billionaire is now putting the finishing touches to his cabinet with former Texas governor Rick Perry and Montana Representative Ryan Zinke his reported picks for energy and interior secretary respectively.

On Tuesday he greeted a stream of guests in New York including rapper Kanye West and Bill Gates, the richest man on the planet who dedicates his life to philanthropy. Gates said Trump had an opportunity to inspire Americans to embrace innovation as John F. Kennedy once promoted space exploration. "We had a good conversation about innovation, how it can help in health, education, the impact of foreign aid and energy, and a wide-ranging conversation about power of innovation," Gates said afterward.

Trump told the Wisconsin rally he also met Tuesday with Vogue editor-in-chief Anna Wintour, who was a vocal supporter of his Democratic rival Hillary Clinton. He praised Republican House Speaker Paul Ryan, with whom he had a combative relationship during the campaign.

"Honestly, he is like a fine wine," he said to laughter. "Everyday goes by I get to appreciate his genius more and more."

With inputs from agencies

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Updated Date: Dec 16, 2016 18:47:08 IST