While President-elect Donald Trump has yet to step back from his business interests almost two months after winning the election, Rex Tillerson, the longtime ExxonMobil CEO tapped to be the next secretary of state, has already agreed to cut ties with the Irving-based oil behemoth well before he knows whether he'll actually be confirmed for the gig in Trump's administration.
Sure, Tillerson, a native of Wichita Falls who spent his entire career at Exxon, has some Russian connections that are a little too close for comfort for some senators, but at least he is showing how you're supposed to do things if you want to avoid conflicts of interest, business-wise, with his agreement to leave the company.
Tillerson's departure from Exxon, announced Wednesday, comes roughly three months before Tillerson was scheduled to leave the company. (Currently 64, Tillerson was already slated to retire when he turns 65 in March.) The agreement between Exxon and Tillerson provides him with a $180 million retirement package in a deal brokered with the help of federal ethics regulators, according to an Exxon release.
Tillerson — a longtime conservative dubbed "T-Rex" by Sarah Palin, who did not support Trump in the election — doesn't have any actual diplomatic experience, but his selection as the head of the U.S. State Department makes a certain kind of sense, since running Exxon is a lot like running a country. However, questions have emerged ever since he became the front-runner for secretary of state about whether it's really possible for the longtime head of one of the largest energy companies on Earth to put aside that company's interests in favor of the wider concerns of the country.
But it looks like Exxon officials are doing their best to steer clear of anything that even meanders toward ethical gray areas when it comes to Tillerson. The company's board of directors and Tillerson agreed to completely split now, and Tillerson will get cash in exchange for the 2 million shares of Exxon stock he would have received over the next ten years as part of his original agreement. The money will go into an independent trust that will be strictly prohibited from investing in Exxon stock. The funds will be managed in strict accordance with government ethics rules, according to Exxon.
For his part, Tillerson is losing money by agreeing to this exit deal, giving up about $7 million in compensation he'd have received through about $4 million in cash bonuses and about $3 million from the sale of stock. He'll also be giving up access to various company services, including retiree medical and dental benefits, and administrative, financial and tax support. On top of that, if Tillerson, for whatever reason, gets back into the oil and gas industry within the next decade, he'll forfeit the entire trust. In a nice little touch, the money will be given to "one or more charities involved in fighting poverty or disease in the developing world" instead.
In addition, Tillerson has also told State Department officials that he'll sell off the more than 600,000 shares of Exxon stock he currently owns, worth about $54 million, if he does in fact become secretary of state.
Right now, of course, it's by no means certain that Tillerson will actually be confirmed. His appointment makes sense in some ways — Exxon is practically its own little country, which means Tillerson knows how to both run a country and work with various governments all over the world — but his close ties to Russia almost immediately drew intense criticism from both sides of the aisle.
Democrats opposed Tillerson from the get-go, along with a few Republicans. Arizona Republican Senator John McCain, who told Fox News that "“Vladimir Putin is a thug, bully and a murderer, and anybody else who describes him as anything else is lying.” Florida Republican Senator Marco Rubio pushed back on Trump's pick almost immediately because of Tillerson's Russian connections. If Rubio, a member of the Senate Foreign Relations Committee, joins committee Democrats opposing the move, Tillerson's nomination will effectively be blocked.
On Wednesday Tillerson met with Senator Ben Cardin, the ranking Democrat on the Foreign Relations Committee, who is known to be in favor of sanctions and wary of Russia, to try to smooth things out before two days of confirmation hearings slated to be held on January 11.
On the one hand, Tillerson and Exxon are both making clear they want to separate their interests so that Tillerson can take on the new job in Trump's administration without running the risk of benefiting from decisions he makes as secretary of state. On the other side, though, critics point out that Tillerson has essentially been given millions of dollars by a major company just before he takes office. (Though it's worth noting that when it comes down to it, Tillerson earned the money he's getting and to become secretary of state, he's actually losing a small chunk of what he earned.)
But either way, at least Tillerson proclaimed he is trying to follow governmental ethics rules to the letter, and that he is going to make sure his personal financial interests and Exxon's don't touch at any point going forward.
Meanwhile, the next president of the United States has yet to really distance himself from his numerous companies, and has said in the past that he would have his grown children run his businesses if he won. But Trump has announced no plans to widely divest himself of his assets, let alone any talk of putting it all into a blind trust. (Trump has justified this by pointing out that both the president and the vice president are exempt from the Office of Government Ethics rules preventing conflicts of interest within the executive branch.)
Trump still hasn't even held the news conference that was supposed to take place at the end of December — now tentatively slated for January 11 — to discuss how he will actually handle his conflicts of interest. And let's not even talk about the tax returns.
All things considered, at least Tillerson is trying to make things look clean and aboveboard. Trump and his team should be taking notes.
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