Inside Rex Tillerson's Business Dealings in Russia

The ExxonMobil CEO has long done business in Russia.

ByABC News
December 12, 2016, 5:32 PM

— -- ExxonMobil CEO Rex Tillerson's selection for secretary of state, pending Senate approval, is drawing scrutiny to the corporate executive's dealings with Russia and its president, Vladimir Putin.

(Trump announced Tuesday morning that he has tapped Tillerson for secretary of state. "I can think of no one more prepared, and no one more dedicated, to serve as Secretary of State at this critical time in our history,” Trump said in a news release.)

But the selection comes four days after the Washington Post reported that a CIA assessment found that Russia interfered in the U.S. presidential election to help Trump win.

Two months earlier, in October, a federal government statement said the U.S. intelligence community is confident that the Russian government directed hacks and releases of emails of U.S. political organizations and others, actions “intended to interfere with the U.S. elections process.” And on Friday, President Obama ordered an investigation into possible foreign government hacking intended to interfere with the 2016 election and going back to the 2008 election.

Tillerson's business dealings with Russia have quickly drawn attention, including from members of Trump's own party.

"Being a ‘friend of Vladimir’ is not an attribute I am hoping for from a #SecretaryOfState," tweeted Florida Sen. Marco Rubio, who ran against Trump in the Republican primaries.

After Tillerson was officially announced, Rubio wrote in a statement that he has "serious concerns" about his nomination.

"I will do my part to ensure he receives a full and fair but also thorough hearing before the Senate Foreign Relations Committee,” Rubio wrote.

Republican Sen. John McCain of Arizona, one of four senators calling for a bipartisan investigation into reports of Russian interference in the election, said on Fox News today that Tillerson deserves a fair hearing. But, he said, "I am concerned about his relationship with Vladimir Putin."

"Vladimir Putin is a thug, a murderer, a KGB guy who only wants to restore the Russian empire," McCain said.

Democratic Rep. Adam Schiff of California asserted in a tweet that Tillerson's business dealings with Russia would present "huge conflicts of interest if SecState."

But Trump's surrogates and advisers said Tillerson's work in Russia could be an asset.

"It's not like he's pounding down vodka with Putin in a local bar. But he's dealt with him in a business context," Trump senior adviser Kellyanne Conway told George Stephanopoulos on "Good Morning America" today. "We know we don't have a good relationship with a lot of countries, including Russia. If Mr. Tillerson or whoever [Trump] selects, if he can go ahead and improve relationships and advance U.S. interests and the Trump doctrine, we should welcome that."

Similarly, Republican National Committee Chairman Reince Priebus, slated to become Trump's chief of staff in the White House, said, "The fact that [Tillerson] actually has a relationship with people like Vladimir Putin and others across the globe is something that shouldn't be -- we shouldn't be embarrassed by it, it's something that I think could be a huge advantage to the United States."

Tillerson's Dealings With Russia and Putin

Tillerson's business dealings in Russia extend back to the 1990s, when he assumed responsibility for Exxon's holdings there. In 2005, as president of ExxonMobil, Tillerson was among a group of energy executives who met with Putin to discuss potential cooperation with Russia.

Tillerson continued to climb the ranks of ExxonMobil, assuming the position of chairman and CEO in 2006. "Tillerson’s success within Exxon was attributable in part to the work he has done in Russia," Steve Coll, dean of the Columbia Journalism School and author of the 2012 book, “Private Empire: ExxonMobil and American Power,” wrote recently in "The New Yorker."

In 2011, after Tillerson had been running ExxonMobil for half a decade, the company inked a strategic cooperation agreement with Rosneft, a Russian oil firm majority-owned by the government. The two companies agreed to work together on projects such as oil exploration in the Arctic and to pool technological resources, a Rosneft press release said. Putin attended the signing ceremony, although, according to the Rosneft press release, ExxonMobil Development Company President Neil Duffin signed for ExxonMobil.

Tillerson met with Putin in 2012. "This is already our second meeting in a short span of time, and there is a good explanation for this: increasingly close relations are being forged between your company and Russian market players," Putin told Tillerson, according to a transcript of the conversation on the Russian president's website.

"I agree, as you point out, that nothing strengthens relationships between countries better than business enterprise. And these agreements will serve to strengthen our relationship between our two countries and obviously our two companies," Tillerson responded.

ExxonMobil increased the scope of its joint ventures with Rosneft in 2013, adding for example 150 million acres in the Arctic to its area of cooperation. “ExxonMobil is making a significant investment in Russia, and these agreements serve as the foundation for our projects and future work together,” Tillerson said at the time. That same year, Putin awarded Tillerson a Russian civilian honor, the Order of Friendship.

In 2014, Russia annexed Crimea and the U.S. imposed sanctions that limited business dealings with Russian companies, Rosneft included. ExxonMobil said in a 2014 press release that it was complying with all sanctions and winding down its activities in the Arctic. The company's maximum exposure to loss from its joint ventures with the Russian energy sector was $1 billion at the end of 2014, according to a regulatory filing.

Rosneft is still under sanctions, according to an ABC News search of a U.S. Treasury Department database.

This past March, at an ExxonMobil meeting for investment analysts, Tillerson said the company would be interested in "getting back to work" in the Arctic and Black Sea if sanctions are lifted.

"We are very anxious to get back to work there," he said of the Arctic. "It’s a really an interesting, exciting area," he said. "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 ... 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."

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