Speed Reads

Tangled Webs

The U.S. fined Exxon over Russia sanctions, Exxon sued back, and 2 Trump Cabinet secretaries are on opposite sides

On Thursday morning, the U.S. Treasury Department fined ExxonMobil $2 million for allegedly violating U.S. sanctions against Russia in a series of eight business deals in 2014 with Russian state oil giant Rosneft and its CEO, Igor Sechin. At the time of the deals, Rex Tilllerson, now secretary of state, was Exxon's chief executive, with a long relationship with Sechin. The U.S. had sanctions against Sechin but not Rosneft.

The relatively modest fine, levied after a years-long investigation, "gives the message that they're going to do what they have to even though Rex Tillerson is secretary of state," Hal Eren a former official in the Treasury Department's Office of Foreign Assets Control (OFAC), tells The New York Times. "Perhaps it was a bit of assertion of independence by the staff of OFAC."

Exxon quickly sued the Treasury Department, naming Treasury Secretary Steven Munchin as the lead defendant and calling the fine "unlawful" and "fundamentally unfair" because the agreements were signed with Sechin in his official capacity, not personal. In its complaint, meanwhile, the Treasury Department said top Exxon officials showed "reckless disregard" for the sanctions, that Exxon's "senior-most executives knew of Sechin's status," and that the eight deals signed by Exxon and Sechin "caused significant harm to the Ukraine-related sanctions."

Regardless of the merits of the fine or lawsuit, the strange legal battle now essentially pits two of President Trump's top Cabinet secretaries against each other, The Washington Post points out. "I can't think of another case where that's happened, where you've had a senior government official on both sides of the 'v,' essentially," former OFAC official Adam Smith tells the Post.