Rex Tillerson Cuts Ties With Exxon Mobil In Advance Of Confirmation Hearings

Jan 4, 2017
Originally published on January 4, 2017 5:26 pm

Rex Tillerson, President-elect Donald Trump's nominee for U.S. secretary of state, is severing his ties with Exxon Mobil. The former chairman and CEO is in line to receive a $180 million retirement package.

Tillerson, who has spent his entire career at Exxon, would have reached mandatory retirement age in March. The company announced that it will pay him in cash for the more than 2 million shares he would have received over the next 10 years and that the money will be transferred to an independently managed trust.

If confirmed as secretary of state, Tillerson also has committed to sell the more than 600,000 Exxon shares he currently owns. The deal means he will give up about $7 million dollars, compared with what he would have received had he retired in March as planned.

The deal was worked out to comply with federal ethics rules. Tillerson has promised not to return to the oil and gas industry for 10 years. If he violates the agreement, he would forfeit all the money in the trust, which would be given away to charities chosen by the trust manager. All this is meant to reassure senators that Tillerson would not be unduly influenced by Exxon Mobil if he were to become America's top diplomat.

He still has an uphill battle for confirmation.

Democrats have yet to agree on confirmation hearings tentatively set for Jan. 11, and senators on both sides of the aisle will likely question Tillerson about his close relationship with Russian President Vladimir Putin. As Exxon Mobil CEO, he was opposed to U.S. sanctions on Russia, which got in the way of his company's project with Russian energy company Rosneft to drill in the Arctic.

Tillerson met Wednesday with the ranking Democrat on the Senate Foreign Relations Committee, Ben Cardin, who has been an outspoken critic of Russia and a supporter of sanctions. The Maryland senator said he had a "candid" discussion with Tillerson.

"Russia is not a friend of the United States," Cardin told reporters outside his office, saying he thinks "that is a strong bipartisan message you will hear during the confirmation process."

Cardin also said he didn't have time to review Tillerson's divestment and ethics plan before the meeting and that he still wants to see three years of his tax returns.

Senate Foreign Relations Committee Chairman Bob Corker, R-Tenn., has argued that there's no need for that. He said the agreement that Exxon Mobil's board reached with Tillerson to comply with conflict of interest requirements is "all tidied up and done."

Sens. Marco Rubio and John McCain, both Republican members of the foreign relations committee, also have expressed concerns about Tillerson's views on Russia.

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Senators have raised a lot of questions about Donald Trump's pick for secretary of state. They're concerned about former ExxonMobil CEO Rex Tillerson's many business dealings around the globe, particularly in Russia. Tillerson has now severed ties with the company to try to ease some of those concerns. A confirmation hearing could come as early as next week, as NPR's Michele Kelemen reports.

MICHELE KELEMEN, BYLINE: Rex Tillerson spent his entire career at Exxon and would have reached retirement age in March. The company says he's giving up about $7 million in compensation in order to sever ties early. But ExxonMobil is paying him up front in cash for the 2 million shares he would have received over the next decade and putting that estimated $180 million in an independently managed trust.

Tillerson has also committed to selling off the ExxonMobil shares he currently owns if he's confirmed as secretary of state. The chairman of the Senate Foreign Relations Committee, Bob Corker, is calling for a prompt hearing now that Tillerson's paperwork is in.

BOB CORKER: It looks like it's all tidied up and done, so I think he'll have a good hearing.

KELEMEN: But the ranking Democrat, Ben Cardin of Maryland, says he didn't have enough time to go through that ethics plan before meeting Tillerson today. He's also still holding out for Tillerson's tax returns.

BEN CARDIN: I still have always felt that the supplying of the three years of tax returns was an important part of the process.

KELEMEN: Corker has argued that isn't necessary, but Democratic staffers point out that previous secretaries of state held public positions before, so they had a longer history of financial disclosures. That's not the case for Tillerson. And Cardin still has many questions about how much Tillerson will distance himself from ExxonMobil's interests.

CARDIN: The fact that he was CEO of ExxonMobil and his responsibility was primarily to the stockholders and, if he's confirmed as secretary of state, his responsibilities are to the American people - we went over that.

KELEMEN: Take, for instance, Tillerson's experience in Russia. At first, the U.S. supported ExxonMobil's joint ventures with the Russian energy company Rosneft, but things changed, says former U.S. Ambassador Michael McFaul.

MICHAEL MCFAUL: After Russia invaded Ukraine, the Obama administration put sanctions on many people, including Rex Tillerson's partner Igor Sechin, the head of Rosneft. And that's when ExxonMobil's policy and U.S. policy came into tension.

KELEMEN: Tillerson also ignored U.S. State Department advice to American CEOs last year to stay away from a business forum in St. Petersburg. McFaul says that made a big impression on the Kremlin at the time.

Republicans and Democrats have been raising concerns about his Kremlin ties. Cardin, the Maryland Democrat, had what he calls a candid conversation with Tillerson about that already.

CARDIN: Russia is not a friend of the United States. We have serious concerns about Russia. I think that's a strong bipartisan message that you're going to hear during the confirmation process.

KELEMEN: A process he says is only just beginning. Michele Kelemen, NPR News, Washington.

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