How Rex Tillerson exposes the secret chasm between capitalism and conservatism
Conservatives are huge promoters of the free market. But what happens when a company on that market undercuts America's foreign policy?
Rex Tillerson, the CEO of oil behemoth ExxonMobil, has been picked as Donald Trump's secretary of state. While picking Tillerson is consistent with the Cabinet of business plutocrats Trump has already amassed, it also reveals a striking tension between capitalism and conservative ideology.
Tillerson, now 64, joined ExxonMobil (then just Exxon) right out of college in 1975, and became CEO in 2004. Along the way, he spent an enormous amount of time in the company's international division. ExxonMobil operates in something like 50 countries, where many oil reserves are owned by governments and operated by state-owned oil companies. So Tillerson has had to do plenty of international diplomacy in his day, and make nice with governments that don't always share the Pax Americana vision of a globalized and interconnected democratic world.
Primary among them is Vladimir Putin's Russia. "[Tillerson] knows Putin well personally," Steve Coll, who wrote a book on ExxonMobil, told NPR. "He also knows some of Putin's most powerful aides quite well" — including Igor Sachin, one of Putin's right-hand men, and the head of Russia's enormous state-owned oil-and-gas company Rosneft.
Tillerson himself flew to Russia in 2011 to forge a deal with Rosneft to jointly drill in the Arctic Ocean. ExxonMobil remains the rare American company willing to put money and expertise into developing shale oil in western Siberia. Putin even gave Tillerson Russia's Order of Friendship award in 2013.
Maintaining those ties sometimes put Tillerson and his company at odds with American foreign policy. The U.S. ratcheted up sanctions on Russia when Putin moved military forces into Ukraine and annexed the Crimean peninsula. That ground ExxonMobil's deals to a halt, and reportedly lost ExxonMobil something like $1 billion. In 2014, President Obama asked U.S. business leaders to avoid attending a forum in Russia lest they undermine the sanctions. So Tillerson sent one of his top exploration officials in his stead to nail down the paperwork on the Arctic Ocean and Siberia deals.
As Putin amassed increasing authoritarian power, he became something of a villain for the GOP politicians who want the U.S. to keep muscularly asserting American dominance and values internationally. Things reached a boiling point over Crimea, and Russia lending military support and air strikes to help the pro-government forces in Syria's civil war.
Needless to say, these Republican lawmakers are not psyched about Tillerson for secretary of state.
"It is a matter of concern to me that he has such a close personal relationship with Vladimir Putin," Sen. John McCain (R-Ariz.) — who's called Putin a "thug and murderer" — told Face the Nation on Sunday. "And, obviously, they have done enormous deals together, that that would color his approach to Vladimir Putin and the Russian threat."
That same day, Sen. Marco Rubio (R-Fla.) tersely tweeted that "Being a 'friend of Vladimir' is not an attribute I am hoping for from a secretary of state." And Sen. Lindsey Graham (R-S.C.) reiterated that Russia is trying to "break the backs" of democracies around the world.
In addition to Tillerson's coziness with Russia, lawmakers are rightly concerned about conflicts of interest. As secretary of state, Tillerson would have enormous influence over whether the sanctions against Russia remain in place, and lifting them would redound to ExxonMobil's benefit. Indeed, Tillerson himself reportedly owns $218 million in ExxonMobil stock, and his pension is worth about $70 million. (Presumably Tillerson would have to divest his ExxonMobil holdings to become secretary of state. But this will be the Trump White House, so who knows.)
But the deeper point here is that Tillerson forged these ties with Russia and Putin, and sometimes thumbed his nose at U.S. foreign policy, precisely because he was pursuing ExxonMobil's self-interest as a capitalist enterprise. The irony is that conservatives like McCain, Rubio, and Graham are supposed to be all about free-market principles: Businesses pursue their self-interest in the name of efficiency, profits, and market share, free of the sclerosis and empty posturing that come with politics. That's what ExxonMobil was doing in Russia. The glitch is that mainstream conservatives in America — and certainly the Republican Party proper — want the U.S. to remain the globe's pre-eminent superpower, promoting and defending not only its raw interests around the globe, but its particular political ideology and system of governance as well.
By pursuing the first set of goals, Tillerson ran afoul of the second.
ExxonMobil is effectively its own mini-state with its own foreign policy. "ExxonMobil saw itself as an independent, transnational corporate sovereign in the world, a power independent of the American government, one devoted firmly to shareholder interests," Coll wrote. Its revenue is larger than many countries' GDP, and the royalties it pays some governments to drill their oil (like the African country of Chad) are far larger than all U.S. foreign aid to those same countries. In Kurdistan, Tillerson and ExxonMobil defied the State Department and the Obama administration even more brazenly, by doing an independent deal with the Kurdish Regional Government without permission, undercutting the new Iraqi government in the process.
The company even runs its own political intelligence outfit to assess various countries it may do business with. Since oil is a business that pays off over decades, political stability is paramount, and ExxonMobil doesn't much care whether democracy or authoritarianism delivers the stability. Indeed, authoritarian governments can sometimes be more predictable, from a business standpoint. And while ExxonMobil has certainly hired government officials to bulk up its intelligence capacities, its executives often approach Washington "with disdain, if not contempt," according to Coll.
Ostensibly, conservatives' devotion to the free market is supposed to be a matter of objective principle. But individual businesses don't see themselves as principled. They see themselves as profit-seeking.
With a slim 52-48 majority in the Senate, it wouldn't taken many defections from the GOP to scuttle Tillerson's nomination. If Rubio, Graham, and McCain break ranks, that would likely be enough. But if they do oppose Tillerson, they might want to ruminate a moment on how the economic precepts of their own ideology created him in the first place.