THE MORNING PLUM:
This morning brings two important chapters in the ongoing saga of Donald Trump’s alleged drainage of the swamp in Washington. The first is that Trump announced in a series of tweets that he will be turning his businesses over to his two sons, which won’t do anything to alter the potential for conflicts and even corruption (more on this below).
The second is that Trump made official his choice of ExxonMobil Chief Executive Rex Tillerson as secretary of state. The Tillerson pick is being widely analyzed as a potential problem for Trump because of Tillerson’s ties to Vladimir Putin and Russia resulting from his work on Exxon deals in Russia. Indeed, this could create problems among more hawkish GOP senators.
But I wanted to focus on a particular angle of that story — the possible conflicts of interest that are already on display in the choice of Tillerson. The potential problem here stems from the fact that Tillerson — who is set to retire from Exxon next year — may continue to hold large sums of stock in Exxon, and more broadly, will have a stake in the company’s financial deals with Russia’s energy industry. Meanwhile, Exxon stands to benefit from any decision to lift sanctions on Russia, because that would allow some Exxon projects in Russia that had been blocked by those sanctions to go forward.
That will be one of the first things that Tillerson will be involved in deciding. As The Post’s account explains:
Weighing whether to lift economic sanctions on Russia will be one of the first things on Tillerson’s plate, given Trump’s desire to smooth relations with the Kremlin. International economic sanctions, imposed after Russia annexed Crimea and gave support to insurgents in Ukraine’s eastern provinces, have fallen heavily on financial institutions and ExxonMobil.
ExxonMobil, which has a profitable operation on Sakhalin island in eastern Russia, had begun a drilling program in the Arctic’s Kara Sea, where Exxon made a find, and had agreed to explore shale oil areas of West Siberia and deep waters of the Black Sea. If sanctions are lifted, Tillerson told analysts this year, the Black Sea drilling would probably be the first to be restarted.
Ethics expert Norm Eisen tells me this has the makings of a serious conflict-of-interest problem.
“Unless he severs all financial connections of any kind to Exxon, he will need to recuse from everything relating to not just that conglomerate but the relevant industries in which it operates,” Eisen said. “That would be a very far ranging set of recusals.” Eisen added that a big problem area could be the “intersection” of Tillerson’s business relationship with Russia and Putin with questions about the fate of “sanctions against Russia for its illegal aggression.”
The New York Times reports that according to company filings, Tillerson owned $218 million in company stock this year. I asked Eisen whether this creates a conflicts problem. “He’s going to have to get rid of it, at a minimum,” Eisen said, noting that Tillerson’s confirmation hearings “will provide an occasion for a searching and comprehensive review of all these issues.”
Beyond whether Tillerson would personally benefit from this arrangement is the question of where his loyalties would lie. As Michael Klare, the author of a book about the rush for oil in the Arctic, puts it, his negotiations with Russia and Putin ensure that questions will “arise over whether his actions would be benefiting his company or the interests of the United States and its allies.”
“It may be that the appearance of conflict, and the need for repeated recusals, is so profound that the Senate concludes that he cannot do the job,” Eisen said.
Now, it is certainly possible that Tillerson could answer all of these concerns at his confirmation hearings in ways that satisfy ethics experts. But given what we’ve seen so far, there is simply no reason to give Trump or his Cabinet picks the benefit of the doubt on anything involving ethics in government. Meanwhile, whatever happens with Tillerson, there’s still the small matter of the fate of Trump’s global business holdings. And things are not looking too encouraging on that front.
Even though I am not mandated by law to do so, I will be leaving my busineses before January 20th so that I can focus full time on the Presidency. Two of my children, Don and Eric, plus executives, will manage them. No new deals will be done during my term(s) in office.
That bit about “no new deals” is a red herring. As long as his family continues to own his businesses, the potential for all sorts of conflicts involving domestic and foreign policy decisions remains.
And our lack of full knowledge of Trump’s interests makes this worse. If Trump’s sons took over the businesses, we would still have no way of knowing how much they would profit off of, say, Trump’s tax policies. Needless to say, there is still no sign that congressional Republicans will try to compel Trump to show more transparency about his interests anytime soon.
* TRUMP ETHICS PROBLEMS REMAIN: Former Bush ethics czar Richard Painter points to another problem with Trump’s latest announcement:
“It makes no sense to say ‘no new deals.’ Is he going to continue to borrow money from foreign banks like Bank of China? That is a deal. Or collect rent from foreign government-owned companies? That is a deal. Will he still be hiring people, or having people stay in his hotels?”
Um, yes, he will, and you pointy-headed ethics weenies can go suck it.
* TILLERSON ISN’T CRAZY ON CLIMATE CHANGE: CNN reports that there is reason to be encouraged by Tillerson’s and Exxon’s views on the Paris climate accord:
Exxon . . . expressed support for the Paris agreement, which Trump opposed during the campaign. Exxon described the deal as “an important step forward by world governments in addressing the serious risks of climate change” in November. And Tillerson, in a speech at the Abu Dhabi International Petroleum Exhibition, said “both developed and developing countries are now working together to mitigate greenhouse gas emissions” because of the agreement.
It’s not clear yet, however, how Tillerson will advise Trump when it comes to the Paris accord — a key question that needs to be answered.
* EVANGELICAL LEADER RIPS TILLERSON PICK: Tony Perkins of the Family Research Council is blasting Trump’s choice of Tillerson, because his company, ExxonMobil, matches employee contributions to Planned Parenthood, and helped get the Boy Scouts to accept gay members:
“If these are the kinds of deals Tillerson makes — sending dollars to an abortion business that’s just been referred for criminal prosecution and risking the well-being of young boys under his charge in an attempt to placate radical homosexual activists — then who knows what sort of ‘diplomacy’ he would champion at DOS?”
This could cost Tillerson support among some Republicans, and could make his confirmation hearings a bit rockier.
* WHY TRUMP IS PICKING FIGHT WITH CIA: The New York Times reports that it might be due to Michael T. Flynn, his choice of national security adviser, who has decided the CIA has become a political arm of the White House:
Mr. Flynn’s assessment that the C.I.A. is a political arm of the Obama administration is not widely shared by Republicans or Democrats in Washington. But it has appeared to have been internalized by the one person who matters most right now: Mr. Trump.
Unfortunately, Trump will likely “internalize” Flynn’s views on many other consequential national security matters, too. Remember those Arabic signs guiding terrorists across the southern border?
* TRUMP IS REWRITING HISTORY OF CIA AND IRAQ WAR: Trump has fueled his battle with the CIA by saying they got it wrong on Iraq’s weapons of mass destruction. But Glenn Kessler has a very good piece telling another key part of the story: The intelligence was cherry-picked and hyped by Bush administration officials who wanted to attack Iraq for other reasons.
This battle will likely only grow worse as more scrutiny is applied to intelligence findings that Russia may have tried to swing the election to Trump. So the details of what Trump says to denigrate the intelligence community as part of that battle will matter.
* AND OBAMA WHACKS PRESS COVERAGE OF CAMPAIGN: An interesting quote from the outgoing president:
“The real question that I think we all have to reflect on is this: What has happened to our political system where some emails that were hacked and released ended up being the overwhelming story . . . that was depicted as somehow damning in all sorts of ways, when the truth of the matter was it was fairly routine stuff. . . . we don’t spend enough time on self-reflection about . . . how all of us have to do a better job at talking about what’s at stake.”
True, but why does Obama assume political journalism as a profession is inclined toward institutional self-evaluation?