(Bloomberg) — Exxon Mobil Corp. Chief Executive Officer Rex Tillerson will be nominated as President-elect Donald Trump’s secretary of state, setting up a confirmation battle with U.S. lawmakers who have questioned the oilman’s relationship with Russian President Vladimir Putin.
Trump’s team rallied support for the Tillerson selection with endorsements from two prominent members of the Republican foreign policy establishment: ex-Defense Secretary and CIA Director Robert Gates and Condoleezza Rice, the former secretary of state who had opposed the president-elect during the campaign. Gates noted that Exxon is a client of RiceHadleyGates, the consultancy in which he and Rice are principals, but said they had long known each other.
“He would bring to the position vast knowledge, experience and success in dealing with dozens of governments and leaders in every corner of the world,” Gates, who served both Bush and President Barack Obama, said in a statement.
The lifetime oil executive beat out several high-profile candidates for the job, including Trump loyalist and former New York City Mayor Rudy Giuliani, who took his name out of the running, and former Massachusetts Governor Mitt Romney, who had also been a Trump critic during the campaign.
‘Second to None’
"Rex knows how to manage a global enterprise, which is crucial to running a successful State Department, and his relationships with leaders all over the world are second to none," Trump said in a statement Tuesday.
Trump made the announcement hours after he unexpectedly said he was delaying a planned statement on how he’ll separate himself from his business operations as president, from this week to January. It also came as Trump prepared to name Rick Perry of Texas to be Energy Secretary, putting the former oil-state governor atop the agency that helps chart the nation’s energy future, according to four people familiar with the selection process.
Tillerson said that he will focus on restoring America’s credibility on the international stage.
“We must focus on strengthening our alliances, pursuing shared national interests and enhancing the strength, security and sovereignty of the United States," Tillerson said in the statement.
Tillerson, an Exxon lifer and University of Texas-trained engineer, hits Exxon’s mandatory retirement age of 65 in March. He would be the first oil executive to lead the State Department.
Exxon Shares
Tillerson would add to a cabinet increasingly full of millionaires and billionaires, including Commerce Secretary nominee Wilbur Ross, whose fortune is estimated at about $2.9 billion. Tillerson was paid $27.3 million in salary, bonus, stock awards and other compensation in 2015; his 2.6 million shares of Exxon common stock had a value of about $228 million as of early December.
The U.S. Office of Government Ethics says that executive branch employees need to avoid financial conflicts of interest and may be required to sell or place in a trust any assets, such as stock, if a waiver or recusal are not reasonable options.
Word of Tillerson’s possible nomination was circulated even before his Dec. 5 visit to meet the president-elect at Trump Tower partly to see how the markets would react, according to a person familiar with the transition who requested anonymity because the information hasn’t been made public.
Exxon Mobil CEO Rex Tillerson meets with Russian Prime Minister Vladimir Putin in 2012. Kremlin photo.
The prospect of a Tillerson nomination has already drawn some objections from lawmakers in both parties, who expressed concern about his two decades of dealings with Putin at a time when possible Russian interference in the U.S. election is under scrutiny. That suggests that the Exxon executive could face a messy Senate confirmation fight. Republican Senators John McCain of Arizona and Marco Rubio of Florida were among those who said they had questions about Tillerson’s dealings with Putin.
Senate Scrutiny
"The next secretary of state must be someone who views the world with moral clarity, is free of potential conflicts of interest, has a clear sense of America’s interests, and will be a forceful advocate for America’s foreign policy goals to the president, within the administration, and on the world stage," Rubio said in a statement Tuesday.
McCain was even more blunt, saying he has “concerns about what kinds of business we do with a butcher, a murderer, a thug, which is exactly what Vladimir Putin is.”
It would take only one Republican on the Senate Foreign Relations Committee joining all of the committee’s Democrats to block a Tillerson nomination in the committee. The nomination could be taken to the Senate floor despite a rejection in the committee, but that would be an unprecedented move for a Cabinet post.
Proxy Fight
Confirmation hearings may also become a proxy fight over Trump’s position that Putin is an effective leader with whom he can reach agreements, a stance widely unpopular among lawmakers in both parties.
Senator Bob Corker, the chairman of the Senate Foreign Relations Committee, said Tuesday in a statement that he congratulated Tillerson and looked "forward to meeting with him and chairing his confirmation hearing." Corker said in the statement that the committee will hold a hearing on Tillerson’s nomination in early January.
"Mr. Tillerson is a very impressive individual and has an extraordinary working knowledge of the world," said the Tennessee Republican, who had also been in the running for the post.
Russian Hacking Probe
Added to the mix is a looming inquiry into Russian meddling in the election. The Washington Post reported on Friday that the CIA has told senators that Putin’s government was actively seeking to help Trump win the election — a step beyond an earlier finding that the goal was to undermine the credibility of the U.S. political process.
Obama has ordered a full review of the evidence of Russian hacking. Trump has rejected the idea that Russia has been pinpointed as the source of the hacks of Democratic Party servers.
David Mortlock, a former director of international economic affairs on Obama’s National Security Council, said a Tillerson nomination would extend a trend of the U.S. pursuing “economic statecraft” that began under Hillary Clinton, who Trump defeated in the presidential contest, when she was secretary of state.
“It ironically continues something that really started in the Clinton State Department which is economic statecraft and the fact that U.S. CEOs, U.S. companies have been some of our best diplomats overseas and the U.S. brand is an important part of U.S. diplomacy and U.S. representation,” Mortlock said.
Chemistry, Vision
Reince Priebus, who has been named Trump’s chief of staff, said on Fox News Tuesday that Trump chose Tillerson because of his interpersonal skills, his track record in business and a shared vision on international issues.
"At the end of the day, it’s putting America first, and Donald Trump and Rex Tillerson had a connection on that issue," said Priebus, who is currently chairman of the Republican National Committee. "We’re excited about today and what Rex Tillerson is going to bring to the table."
Priebus also said Tillerson’s history with Putin demonstrated toughness.
“The truth is having relationships with people is not a bad thing,” he said. “We have a lot of problems in this world and we’re not going to solve those problems by pretending that people don’t exist.”
Rice, who had criticized Trump, wrote on Facebook Tuesday in support of his nomination of Tillerson.
“He will bring to the post remarkable and broad international experience; a deep understanding of the global economy; and a belief in America’s special role in the world,” Rice wrote. “I know Rex as a successful business man and a patriot. He will represent the interests and the values of the United States with resolve and commitment. And he will lead the exceptional men and women of the State Department with respect and dedication.”
Bloomberg News by Jennifer Jacobs, Nick Wadhams and Ben Brody
