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Russia and conflicts of interest: Rex Tillerson embodies quandaries for Trump

Posted by on Dec. 13, 2016 at 11:02 AM
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Russia and conflicts of interest: Rex Tillerson embodies quandaries for Trump

President-elect and his pick for secretary of state both face trial by fire over business deals and links to Moscow, amid claims of election interference

By nominating Rex Tillerson as secretary of state, Donald Trump will ignite a battle in Congress over the two issues that look set to overshadow the opening chapters of his presidency: Russia and conflicts of interest.

Tillerson embodies both quandaries. The ExxonMobil executive has grown close to Vladimir Putin and his circle through a succession of oil deals. The fate of those deals would give him a private interest when he comes to negotiate with Moscow as secretary of state. Lifting sanctions would unshackle ExxonMobil’s planned multi-billion dollar operations in Russia, and boost Tillerson’s retirement fund.

His confirmation hearings in the Senate will be a bitter and emotive struggle. For Trump’s legion critics, the opaque ties with Russia and his glaring conflicts of interest represent existential threats to US democracy. Trump is giving the nod to Tillerson, the recipient of Moscow’s Order of Friendship, as a slaughter is underway in Aleppo, likely to be one of the worst war crimes of the century so far, in which Russia is complicit.

Furthermore, confirmation hearings will run concurrently with a congressional investigation into what role Russian intelligence played in tilting the US presidential election and giving Trump an edge. The legitimacy of his presidency, for a majority of the US electorate and much of the world beyond, will be at stake in those hearings.

At the same time as declaring, by characteristic tweet, that a secretary of state nomination would come on Tuesday, Trump also casually revealed how he would be dealing with his own deep conflicts of interest – by “leaving” his businesses and devolving their management to his two eldest sons, Donald Jr and Eric, while offering that the organisation would do “no new deals” during his time in office.

The brief bulletins on Twitter came in place of a promised press conference on the future of his businesses that was to have taken place on Thursday, but was then summarily cancelled. Just before midnight on Monday, Trump tweeted that he would face press questions “in the near future to discuss the business, Cabinet picks and all other topics of interest”. The timing was left vague. His spokeswoman said it would be left until next month.

Also left vague was what “leaving” the Trump Organisation would mean – stepping down from management or divesting his ownership stake – or whether selling his share would lessen his conflict of interest as president, if the decisions he takes in the Oval Office could enrich his children. It is also doubtful whether a vast sprawling empire like the Trump Organisation, with a presence in some 20 countries, can function without doing “new deals”. Entering agreements with governments and partners is what it does in its day-to-day operations.

US law allows the president to have a conflict of interest. However, if businesses in which he had a stake benefit from payments from foreign governments or foreign state-owned companies, he would risk violating the “emoluments clause” of the constitution.

For his part, Tillerson could sell the ExxonMobil stock in his retirement fund, but the question would remain whether that sale would divest him of his loyalty to a company that has employed him for more than four decades, that operates almost as a state itself and outweighs the economies of most of the countries on the planet.

Trump’s decisions to choose Tillerson, and to keep his business empire in the family, represent acts of defiance of the traditionalists in the Republican party. Veteran senators John McCain and Lindsey Graham will make the Tillerson confirmation, and the investigation into Russian election meddling, trials by fire for the new president. It would take the revolt of just one more Republican senator to rob Trump of his majority.

The president-elect may have been encouraged in his choice of Tillerson by the endorsement of grandees from former GOP administrations, including James Baker, Condoleezza Rice and Robert Gates. Their encouragement may soothe nervous Republicans but they have conflict of interest issues of their own. Baker’s law firm represents ExxonMobil and Russian state-owned oil and gas companies. Rice and Gates are partners in an international consulting firm that was reportedly hired by ExxonMobil.

One by one, the party leaders that once despised Trump fell into line behind him as his campaign gathered its unexpected momentum. The president-elect is betting the Republicans will line up once more, for fear of missing the opportunity of running all three branches of government.

That is a high-stakes gamble. The scale of the business conflicts in the new administration and the blatant influence of Moscow in US politics makes this uncharted territory for all involved.

by on Dec. 13, 2016 at 11:02 AM
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by Scorpio on Dec. 13, 2016 at 11:17 AM
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Can you imagine if this had been Obama and Hillary? The outrage would still be being screeched, but not even a whisper from them now that it's their PE and possible SOS.

by Silver Member on Dec. 13, 2016 at 1:39 PM

Blatant influence of Moscow?  Everything I have read, they do not know who specifically hack and leaked info. The CIA under Obama, and the DNC has said it was Putin without real proof.  Or at least proof presented to the American voters. 

Tillerson may do a good job.  He knows many of the heads of states, and is a savvy businessman.  Maybe it will will be a good change.  If he doesn't work out, he can be fired or resign and other one can be appointed.

When the right had concerns about Obamas policies about the Middle East, they were Islamaphobic.

by KK on Dec. 13, 2016 at 3:38 PM
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It's certainly an interesting turn.  When Wikileaks first broke as news a few years ago members of this group were quite vocal on their opinion that it was a danger to the US.  That the site had damaged us and put Americans at risk due to their hacking and exposure.  Now they do everything they can to deflect from the damage done by the very group they deemed a threat to US security.  

When flight MH17 was downed there was a great deal of talk about Russia being held accountable.  Now all of a sudden we are suppose to assume, that they are our new BFFs and we should expand relations with them.  

Part of Trump's 100 day plan was to establish a plan to guard against cyber attacks yet attacks the US Intelligence community for exposing a cyber attack with Russian government ties.  

He wants to enact a complete ban on lobbyists acting on behalf of foreign looks like his work around is to instead hire them into cabinet positions.  

Quoting KittyMom1026:

Can you imagine if this had been Obama and Hillary? The outrage would still be being screeched, but not even a whisper from them now that it's their PE and possible SOS.

by KK on Dec. 13, 2016 at 3:45 PM

US allies look to Senate confirmation hearings for ExxonMobil CEO and ‘friend of Putin’ amid concerns over future of Nato and Russia sanctions

The surprise pick of Rex Tillerson as Donald Trump’s nominee for secretary of state has led to excitement in Moscow – and trepidation in other eastern European capitals – at the prospect of a “friend of Putin” becoming America’s top diplomat.

US allies meanwhile reacted anxiously to the news, but many diplomats said they would wait for Tillerson’s Senate hearings to discover whether he would make the conversion from oilman to statesman.

Tillerson’s nomination is likely to add further fuel to the issue of alleged Russian intervention in the election in favour of Trump.

Tillerson, the outgoing ExxonMobil chief, has a warm relationship with the Russian president. He also counts Igor Sechin, considered the second-most powerful man in Russia, after Vladimir Putin, as a personal friend.

In the month since the election, both hopes in Moscow and fears in central and eastern European capitals were tempered by an expectation that Trump’s key nominations would follow a more conventional policy on Russia than the president-elect had espoused.

Two weeks ago, when the leading candidates for secretary of state appeared to be Mitt Romney, David Petraeus and Rudy Giuliani – all of whom had spoken critically of Russia and Putin – a Ukrainian official told the Guardian there was “no need for doom and gloom” around the Trump administration, stressing that Republican administrations were traditionally tougher on Russia than Democratic ones.

Tillerson’s nomination changes all that.

Vladimir Milov, a Russian opposition politician who was briefly deputy energy minister during the early Putin years, said Tillerson’s appointment was “100% good news” for Putin.

“This is a clear sign that US foreign policy will move from principles, values and strategic partnerships towards a more transactional approach,” said Milov.

Tillerson, 64, has spent much of his career working on Russian deals and has known Putin since 1999. His work in Russia culminated in a 2011 agreement giving ExxonMobil access to the huge resources under the Russian Arctic in return for giving the giant state-owned Russian oil company, Rosneft, the opportunity to invest in ExxonMobil’s operations overseas.

As a result of the deal, Tillerson became close to Rosneft’s chief, Sechin, a hawkish hardliner who is feared even by many Russian government officials. Sechin was believed to have been behind the carving up of the private oil company Yukos and the jailing of its owner, Mikhail Khodorkovsky, then Russia’s richest man, in 2003.


Milov said Tillerson was known in Russia as a pragmatist willing to do business with Rosneft and Sechin even after the Yukos saga. 

“I heard personally from top managers of American companies that after Yukos, Russia was not worth investing billions of dollars in, because the risks that came with it were too great. But not Exxon.”

Tillerson referred to him as “my friend Mr Sechin” at an economic forum in St Petersburg earlier this year, while Sechin has said that one of his ambitions is to “ride the roads in the United States on motorcycles with Tillerson”.

The 2011 Exxon-Rosneft agreement was frozen when sanctions were imposed on Russia in 2014, following the annexation of Crimea and covert military intervention in eastern Ukraine. ExxonMobil estimated the sanctions cost it $1bnand Tillerson has argued strenuously for the measures to be lifted.

“We always encourage the people who are making those decisions to consider the very broad collateral damage of who are they really harming with sanctions,” he said, at a shareholders’ meeting.

Maxim Suchkov, an analyst at the Russian International Affairs Council, said: “Tillerson’s ties with Sechin and Putin were predominantly driven by lucrative oil deals rather than personal warmth.”

“As a head of an oil giant, he was preoccupied with making profits for his company –even if that involved growing cosy with people that are critically assessed in the US. Secretary of state position demands a different set of drivers – safeguarding national interests.

“Right now, Russians expect the personal chemistry Tillerson seems to have with Putin might be helpful in switching the relationship with Washington from a confrontation to a cooperation mode,” Suchkov, who is also the Russia and Middle East editor for Al-Monitor, added. “Americans fear this ‘chemistry’ will make Tillerson trade US interests for Moscow. Both are somewhat fractured expectations, in my view. Tillerson may have more empathy for Russia’s position but that will be unlikely to change the systemic differences between the two countries.”

European diplomats in Washington cautioned against the presumption that Tillerson would bring his outlook as head of the world’s biggest publicly traded oil company to his new job.

“Secretary of state is a different job, with a different set of priorities,” said a senior diplomat. “You only know how he is going to approach being secretary of state when he goes before the Senate and answers questions on the key issues.”

US allies in Europe will be watching the confirmation hearings in particular for Tillerson’s views on Russia, western sanctions over Moscow’s intervention in Ukraine, and most of all his expression of his view of Nato – whether he sees the alliance primarily as a counterterrorist force, or as the guarantor of European security right up to Russia’s borders.

Tillerson will not take over the state department with a free hand to rewrite policy, however. He is likely to face a striking culture clash with the institution, the bastion of foreign policy orthodoxy, which would have an ally in the secretary of defence nominee, the retired general James Mattis, who is likely to oppose any erosion of Nato solidarity in the face of Moscow’s assertiveness in Europe.

However, the nomination as head of the state department of a man who knows Putin better than most western politicians, and who appears sympathetic to Kremlin talking points, has the potential to radically shake up US policy on Russia.

“Of course people in the Kremlin would prefer to deal with people they know for a long time, and people they know positively,” said Konstantin von Eggert, a journalist and foreign policy analyst who from 2009-2010 was a vice-president of ExxonMobil Russia, but left before its deal with Rosneft.

By extension, it will lead officials in Ukraine and other eastern European countries to worry that Trump and Tillerson will end the sanctions regime and do a “big deal” with Moscow that throws them under the bus. 

“Trump’s choice of Rex Tillerson suggests he wants to make good on his promise to cut deals with Russia instead of containing it,” said Thomas Wright, who has written extensively on Trump’s foreign policy at the Brookings Institution.

“Tillerson has a relationship with Putin and he opposed the sanctions imposed on Russia after the annexation of Crimea. This will alarm those worried about Russian intentions in Europe.”

In a series of Twitter posts on Tuesday, the former ambassador to Russia, Michael McFaul, questioned Tillerson’s nomination. 

“US & our allies sanctioned Russians because of Putin intervention in Ukraine. Will Tillerson lift sanctions without Russian policy change?” McFaul wrote. He also suggested Tillerson’s personal links to the Kremlin inner circle could affect his decision-making: “Tillerson closest business associate in Russia, Igor Sechin, is on sanctions list. Can he separate personal from national interests?”

Even before Trump announced his decision on Tuesday, leading Democrats were painting Tillerson as a Moscow stooge. With a slim 52-48 majority in the Senate, it would only take three Republicans in revolt to cast Tillerson’s job in doubt. He would face aggressive questioning from Republican foreign policy hawks, led by John McCain.

“I have, obviously, concerns about his relationship with Vladimir Putin, who is a thug and a murderer, but obviously we will have hearings on that issue and other issues concerning him will be examined and then it’s the time to make up your mind on whether to vote yes or no,” the Arizona senator told CNN on Saturday.

McCain’s former chief of staff, Mark Salter, was far more blunt on Twitter. “Tillerson would sell out Nato for Sakhalin oil and his pal, Vlad,” he wrote. “Should be a rough confirmation hearing, and a no vote on the Senate floor.”

by Silver Member on Dec. 13, 2016 at 4:02 PM
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I find it funny that Trump said he was going to "drain the swamp" but instead seems to be putting it on life support.

by Silver Member on Dec. 13, 2016 at 5:13 PM

Trump's sucking up to Russia is a real concern.   Maybe he is following the old cliche - keep your friends close and your enemies closer?

by Platinum Member on Dec. 13, 2016 at 6:31 PM
Actually; I think it's a good pick for Trump, the State Department really as been irrelevant the past 25 years are so, mostly it's been just an American run PR Firm for the US.

Our Trade deals been running through the Commerce Department.

Our Financial deals been working its way through the Treasury Department.

Our Science deals been working through various other agencies.

Our law and criminal investigations deals been working through the DoJ.

Our intelligence works been going around the State Department bypassing their interference.

Let alone; the military agreements have been made without State Department's involvement.

The State Department input into foreign diplomatic missions are secondary to that of the NSC and the NSA.

The State Department needs to be completely overhauled; the ambassadors need to run their "countries" like a company with a diverse holdings and interested.

While; the concerns regarding Russia are very real and legit, I feel that the John Bolton as undersecretary would balance that concern.
by Silver Member on Dec. 14, 2016 at 5:31 AM
He was going to drain the swamp and build a wall. Instead smoooshh. He decided to build a swamp

Tillerson is an inappropriate choice. Romney was a better one. At least he was qualified and capable of levying sanctions against Russia if needed

Quoting DisabledVet:

I find it funny that Trump said he was going to "drain the swamp" but instead seems to be putting it on life support.

by Silver Member on Dec. 14, 2016 at 5:53 AM
Being a "friend of Vladimir" is not an attribute I am hoping for from a #SecretaryOfState - MR

— Marco Rubio (@marcorubio) December 11, 2016
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