LATEST: ExxonMobil helped defeat Russia sanctions bill
CEO of US oil and gas corporation ExxonMobil, and Donald Trump’s pick for Secretary of State, Rex Tillerson | Ben Stansall/AFP via Getty Images
ExxonMobil successfully lobbied against a bill that would have made it harder for the next president to lift sanctions against Russia, clearing the way for the oil giant to restart a program worth billions of dollars if Donald Trump eases those restrictions as president.
The company’s effort could be helped by outgoing CEO Rex Tillerson, who, if confirmed as secretary of state, would be a key adviser on the decision.
The bill, known as the STAND for Ukraine Act, would have converted into law for five years President Obama’s measures punishing Russia for annexing Crimea, making it more difficult for Trump to roll them back. The Senate left town on Monday without acting on the bill, making it easier for Trump to end the sanctions with a stroke of the pen.
The sanctions forced Exxon to step back from a drilling project in Russia’s Arctic, a loss that the company valued in a regulatory filing at as much as $1 billion. Exxon also lobbied the Senate Foreign Relations Committee against previous bills punishing Russia for the invasion of Ukraine, according to a person familiar with the company’s efforts on Capitol Hill.
Exxon’s intervention against the sanctions bill could add to concerns among senators — including Republicans John McCain, Lindsey Graham and Marco Rubio — that Tillerson is too chummy with Vladimir Putin. Exxon’s business partner in Russia is state-owned Rosneft, led by Igor Sechin, a close Putin ally who was sanctioned by the Treasury Department in 2014. Tillerson and Putin personally concluded the joint venture in 2011.
Exxon reportedly raised concerns that the implementation of European sanctions against Russia would give the company’s overseas competitors an unfair advantage.
In a statement, Exxon spokesman Alan Jeffers said the company “sought and provided information” about its activities in Russia and Ukraine and disclosed its lobbying as required. “Our contacts were reported per congressional requirements, but were mainly in the first half of 2014,” when the Russia sanctions were first imposed, he added.
Exxon reportedly raised concerns that the implementation of European sanctions against Russia, developed in concert with the U.S. restrictions, would give the company’s overseas competitors an unfair advantage.
Russia sanctions have been a key point of disagreement between Exxon and U.S. government policy in recent years. Exxon and Rosneft collaborate on 10 joint ventures in the Russian Arctic, the Black Sea and western Siberia. Tillerson has said the company would go “back to work” if sanctions are lifted in 2017.
Though Tillerson would come to Trump’s cabinet with no government experience — who has worked at Exxon since college — he has some claim to knowing his way around the halls of power from having presided over a chain of policy successes and one of the capital’s most formidable corporate lobbying shops.
The Washington operation, whose annual budget has hovered around $12 million for the last six years, is led by Theresa Fariello, who used to work for the Energy Department and former Rep. Jerry Kleczka (D-Wisc.), and was a bundler for Hillary Clinton.
The company also retains former Sen. Don Nickles of the Nickles Group, former Clinton appointee and Kerry aide David Leiter of ML Strategies, Teresa Gorman of LPI Consulting, and other firms including Kelley Drye & Warren, Capitol Counsel, McGuireWoods Consulting and Ernst & Young.
Exxon’s lobbyists aren’t bomb-throwers like some other fossil-fuel companies’ can be, but they are known for being ruthlessly efficient on their top issues. When environmental groups began a well-funded campaign charging that the oil giant fraudulently misled the public and investors about its climate change research, Exxon met privately with its congressional Democratic critics — while publicly lambasting activist groups for selectively editing the company’s record.
“It’s a culture of education, of growth and of loyalty,” said a lobbyist who frequently interacts with Exxon. “Call it getting what you want, but at the end of the day, when you give people this much pride and passion in their company, they’re going to be good soldiers for you.”
Exxon lobbyists’ awareness of their own clout makes them more cautious than some rivals because they know how the public or the press might seize on any missteps.
“A movie like ‘Thank You For Smoking’ could never be done with ExxonMobil as the subject,” one former employee said. “Any company that has that kind of profile by definition tends to do things very carefully.”
Exxon often works closely with its trade associations such as the American Petroleum Institute, as it did last year when Exxon and the rest of the industry celebrated the end of the U.S. ban on crude oil exports as a rider to the year-end government spending deal.
On Russia sanctions, Exxon sometimes works through the U.S.-Russian Business Council, where Tillerson used to be a board member. In May the group brought a handful of people who work for American companies in Russia, including Caterpillar and JPMorgan, to discuss topics including sanctions with House Democrats.
Tillerson’s acceptance of climate science puts him at odds with Trump, who has repeatedly question man-made global warming.
Randi Levinas, the U.S.-Russia Business Council’s lobbyist, said the House Foreign Affairs Committee Democratic staff invited the group to weigh in on the sanctions bill. The group also lobbied the Senate Foreign Relations Committee, she said.
The Ukraine bill passed the House anyway but stalled in the Senate at the hands of Sen. Bob Corker (R-Tenn.), who was also in the running to be the nation’s top diplomat.
The Senate version was introduced Dec. 9, days before the chamber adjourned for the year, with only Democratic cosponsors. A Corker aide blamed a lack of consensus between the administration and lawmakers from both parties for the absence of bipartisan support in the Senate following bipartisan passage in the House.
Though Exxon’s Washington office typically operates without much interference from headquarters in Irving, Texas, one of Tillerson’s first big initiatives as CEO was to review the company’s position on climate change. According to the book “Private Empire” by journalist Steve Coll, Tillerson wanted the company to find a way to conform to the scientific consensus on climate change without admitting it ever strayed, which could open the door to tobacco company-style lawsuits.
Tillerson’s acceptance of climate science puts him at odds with Trump, who has repeatedly question man-made global warming. As secretary of state, Tillerson would have significant sway over the Trump administration’s climate policy, including the future of its participation in the United Nations pact to cut global emissions that conservatives abhor. Exxon itself backed the Paris climate deal, which Trump has said he is still deciding whether to cancel.
Still, Tillerson’s position will not spare him a skewering from Democrats, who are eager to use his confirmation hearing to confront him on Exxon’s record. The New York and Massachusetts attorneys general are investigating whether Exxon downplayed the risks of climate change.
“I am deeply troubled by Mr. Tillerson’s vocal opposition to U.S. sanctions on Russia following its illegal invasion, occupation and annexation of Crimea, Ukraine, and his close personal relationship with Vladimir Putin,” Sen. Ben Cardin of Maryland, the ranking Democrat on the Foreign Relations Committee, said in a statement. He added: “Mr. Tillerson has demonstrated he knows the corporate world and can put his shareholders’ interests first, but can he be a respected Secretary of State that puts the national security interests of the American people first? It remains to be seen.”