US PRESIDENT-ELECT Donald Trump’s nominee for secretary of state, former Exxon Mobil chairman, Rex Tillerson, is a controversial choice.
Having surrounded himself with retired generals for national security positions, in Tillerson Trump has chosen someone with no previous government experience to be the nation’s chief diplomat. But it would be a mistake for foreign policy experts and political pundits to dismiss Tillerson.
Tillerson would not be the first US secretary of state from the corporate world. George Shultz stepped down as president of construction and engineering giant, Bechtel, to lead president Ronald Reagan’s State Department (although Shultz had previously served in Richard Nixon’s administration).
Tillerson has been at the helm of the world’s largest, most profitable publicly traded oil company for more than a decade. Exxon has operations in 50 countries and is a symbol of America’s economic might and commercial prosperity. It has deep, historic roots in the Standard Oil conglomerate founded by John D Rockefeller in 1870. There are only a handful of global heads of state who have more access and influence than Tillerson.
I have witnessed the respect Tillerson commands. A decade ago, as a young energy executive attending an industry conference in Madrid, I noticed that when King Juan Carlos of Spain addressed the audience, most attendees carried on their business — some paid attention, but most did not. When Tillerson took the podium, the room tuned in to his every word.
Tillerson will bring extensive management experience to the US State Department, having run a $385bn conglomerate that is involved in everything from oil and gas exploration to logistics and construction, human resources and risk management to government affairs and research in alternative energies.
Having had to answer to shareholders and investors who demanded results could prove invaluable as Tillerson navigates a sprawling, often inefficient government bureaucracy that is not as results-driven as the corporate world. The adage goes that “oil is not found in nice places” and, as such, Tillerson has dealt with leaders of some of the world’s most problematic regimes — men like Russian President Vladimir Putin, and former Venezuelan president, Hugo Chavez. The fact that he can successfully negotiate with them is an asset, not a liability.
While his relationship with Putin should be thoroughly vetted, it is shortsighted to suggest that because his company was heavily invested in Russia, he would somehow be compromised while pursuing America’s interests.
As CEO of Exxon, he had a fiduciary responsibility to his shareholders to make sure the company was active in parts of the world that were energy-rich, and to deliver high returns. it was not his responsibility to support or advance US foreign policy goals abroad. If he is confirmed as secretary of state, his priorities will shift accordingly.
Global energy companies and Exxon peers, such as Total, Shell, and BP, all have a heavy footprint in Russia. This is because Russia, since the end of the Cold War, has become a key energy exporter, just having recently been knocked off its perch as the largest combined oil-and-gas reserve holder in the world — by the United States.
Exxon not being an important player in Russian energy development would be like a global financial institution not having a presence in New York or London (they couldn’t then claim to be truly “global”.) Tillerson has a reputation for being tough and driven in defence of Exxon’s interests. In Venezuela, for instance, when Chavez sought to expropriate Exxon’s leases, he took Venezuela to international arbitration and won. Most other companies settled for cash buyouts, rather than go through the hassle of litigation. As much as he opposed sanctions on Russia — as many American CEOs do, because it hurts their bottom line — Exxon has abided by them.
Indeed, Tillerson’s public statements indicate that he would be pragmatic in foreign affairs, more of a Republican in the mould of George HW Bush and Brent Scowcroft than Donald Rumsfeld or Dick Cheney. As a business executive, he has pushed for free trade and opposed sanctions that disadvantaged American companies.
There is little in his tenure at Exxon to indicate that he would not be a zealous advocate for America’s foreign policy. He would show the same rigour that made Exxon the dominant energy company in the world. He could prove to be the “velvet glove” in Trump’s national security team, with retired generals with an appetite for military force — such as Michael Flynn and James Mattis — behind him. Trump campaigned and won the presidency on a platform of radically changing how Washington conducts domestic and foreign policy.
He wants corporate executives to serve in his cabinet, because they know how to ‘win’ and to cut ‘better’ deals than their predecessors, who were mostly politicians with little ‘real world’ experience. If the US Senate confirms Tillerson, Trump will have fulfilled that goal.