“My philosophy is to make money.”
n January 1, Rex Tillerson retired from oil giant Exxon Mobil after 41 years, the last 10 as CEO and chairman of the board. When he appears in January before the U.S. Senate Foreign Relations Committee to be considered for U.S. Secretary of State, Exxon Mobil will be preparing to appear before a jury at the U.S. District Court for the District of Columbia, just blocks away. There, the company will face allegations that security forces under its employ engaged in serious human rights abuses, including murder, torture, sexual violence, kidnapping, battery, assault, burning, arbitrary arrest, detention and false imprisonment. The complaint specifically names Rex Tillerson.
Among the plaintiffs, all of whom use aliases out of fear for their lives, is “John Doe II.” According to the complaint, in August 2000, soldiers working for Exxon Mobil beat and tortured him “using electricity all over his body, includ[ing] his genitals.” After approximately three months, the “soldiers took off his blindfold, took him outside the building where he had been detained and showed him a pit where there was a large pile of human heads. The soldiers threatened to kill him and add his head to the pile.” He was ultimately released, only to have the soldiers return later to burn down his house.
John Doe I, et al., v. Exxon Mobil Corporation, et al. is awaiting a trial date expected “any day now,” according to lead plaintiff attorney Terrence Collingsworth. The complaint alleges that in 2000, 2001 and 2004, private military security forces employed by Exxon Mobil to protect its natural gas operations in Aceh province, Indonesia, committed the cited offenses against local villagers. From 1976 to 2005, Aceh was embroiled in a violent independence struggle. In the midst of the conflict, Exxon Mobil essentially privatized Indonesian soldiers, the complaint argues, despite their well-documented history of abusing Indonesian citizens, and aided and abetted the human rights violations through financial and other direct material support.
Exxon Mobil has fought the case for 15 years, denying not the human rights abuses, but rather that the company should be liable. A federal judge ruled, however, not only that the company must stand trial, but also that “sufficient evidence demonstrates” that Exxon Mobil corporate officers “exerted significant control” over the security decisions made by its Indonesian subsidiary.
A 2006 complaint adding new plaintiffs to the case alleges that top Exxon Mobil officials “have been continuously involved” in the Indonesian operations and that “Exxon Mobil Corp. officials who have met with Indonesian officials include … Rex W. Tillerson, president of Exxon Mobil Corp.”
It is just one of countless lawsuits, investigations and allegations confronting the company and its former CEO involving human rights abuses; unsafe working conditions; investor and public fraud; destruction of the environment, climate and public health; support of dictators; contributions to global instability and inequality; and being party to wars and conflict — in addition to decades of verdicts against the company — all of which will follow Tillerson into and haunt the next administration, should Congress permit him to join it.
Rex Tillerson has carefully constructed a public veneer for Exxon Mobil as a law-abiding, spit and polish, model corporate citizen. The storyline goes that because it is so big and has so much money, Exxon Mobil can afford to do everything just right. That may be true in some cases, but more often, Exxon Mobil wields its vast influence and wealth in a manner more closely in line with the philosophy of its infamous founder, John D. Rockefeller, who once said, “The way to make money is to buy when blood is running in the streets.”
Rockefeller founded Standard Oil Company in 1870 and quickly built one of the world’s most ruthless corporate monopolies. In describing the company’s tactics and practices over the next 30 years, the Interstate Commerce Commission’s late-19th-century reports did not mince words: “unjust,” “intentional disregard of rights,” “illegal,” “excessive,” “extraordinary,” “forbidden,” “wholly indefensible,” “obnoxious,” “absurd and inexcusable,” and “so obvious and palpable a discrimination that no discussion of it is necessary.”
The nation and the courts were equally repulsed. The Populist movement railed against the erosion of democracy and subsequent inequality resulting from Standard Oil’s power over the federal and multiple state governments, and in a key 1911 victory, a Supreme Court ruling broke up Standard Oil into 34 separate corporate parts. The largest pieces were Standard Oil of New Jersey — later Exxon — and Standard Oil of New York — later Mobil. In 1999, the two were allowed to re-merge, forming today’s Exxon Mobil. It is the world’s largest publicly traded oil and gas company, and the sixth-largest company on the planet. Were Exxon a country, its $246 billion in revenue in 2015 would make it the 42nd-largest by GDP.
Like generations of senior management before him, Rex Tillerson has spent his entire career at Exxon Mobil. Recruited fresh out of the University of Texas at Austin in 1975, Tillerson, who is known to colleagues as “T-Rex,” rose through the ranks, becoming senior vice president of Exxon Mobil in 2001, president and board member in 2004, and CEO and board chairman in 2006. His 2015 salary was $27.3 million, or about 500 times the median U.S. household income. If confirmed, he will join what is set to be the wealthiest cabinet in U.S. history.
Exxon Mobil is a uniquely insular company, often referred to as a “cult.” In Steve Coll’s Private Empire: Exxon Mobil and American Power, executives of other oil companies describe Exxon Mobil as “ruthless, self-isolating and inscrutable … priggish Presbyterian deacons” who maintain “kind of a 1950s Southern religious culture. They’re all engineers, mostly white males, mostly from the South. … They shared a belief in the One Right Answer.”
“All of the top executives are imbued with the Exxon culture and regard themselves as carriers of the culture,” Neva Goodwin, great-granddaughter of John D. Rockefeller, told me in 2013. Tillerson, she said, is civil, “but [he] never responds in such a way that suggests that he could be at all influenced to change his positions.”
As George W. Bush once famously said of Exxon Mobil: “Nobody tells those guys what to do.”
Other than a stint as president of the Boy Scouts of America from 2010 to 2012, Tillerson does not publicly step outside his role as Exxon Mobil executive. It is as its voice that he gives speeches, offers policy analyses and grants interviews. To understand Rex Tillerson as a man or intuit how he will behave as secretary of state, therefore, we must observe Exxon Mobil’s actions under his leadership and his stated objectives for its future.
Until required to change policy in 2014 to continue receiving federal government contracts, Exxon Mobil failed to meet a single Human Rights Campaign criterion for an LGBTQ-inclusive workplace. When I investigated Exxon Mobil’s LGBTQ polices for The Advocate in 2013, a gay former employee told me, “I feel that [Exxon is like that] racist old aunt, that racist grandfather figure, that person completely out of touch with the times.”
The word I hear most often to describe Exxon Mobil under Tillerson is “bully.”
It is a viewpoint shared by Exxon Mobil’s closest neighbors in its home state of Texas. “They are a major polluter that is breaking the law and threatening the health of millions of Texans and I think they are grossly irresponsible to their neighbors,” says Luke Metzger, director of Austin-based nonprofit Environment Texas. The group is suing Exxon Mobil for breaking clean air laws at its Baytown oil refinery and chemical plant more than 4,000 times between 2005 and 2010, pollution which Metzger alleges continues to this day in this largely Hispanic community near Houston.
In 2013, two workers died and 10 were injured with severe burns at Exxon Mobil’s Beaumont, Texas, refinery. The Department of Labor cited the company for numerous safety violations that resulted in the deadly flash fire. “People do get hurt, and it’s because of the way that Exxon handles its business inside,” said Ricky Brooks, president of the United Steelworkers local representing workers at Exxon Mobil’s facility in nearby Baytown, when I spoke with him a few months after the fire.
The company is vehemently anti-union, says Brooks, and workers, whether unionized or not, are made to fear for their jobs if they speak out. Size and influence, he argues, allow Exxon Mobil to get away with what others cannot. “Exxon only changes when forced to,” he says, “and few people, or governments for that matter, are in a position to force them.”
Within months of my conversation with Brooks in 2013, farmers in Basra, Iraq protested Exxon Mobil, demanding compensation for lost jobs and what they allege is stolen farmland; families in Mayflower, Ark., were forced from their homes when 210,000 gallons of heavy Canadian tar sands oil spilled from a ruptured Exxon Mobil pipeline; and locals in Eket, Nigeria protested Exxon Mobil in response to a November 2012 oil spill that they said wreaked havoc on coastal land and livelihoods.
Why he wants the job
Exxon Mobil operates in some 200 countries and has current direct joint ventures with companies from China and Russia to Saudi Arabia. According to Citizens for Tax Justice, it also keeps a lot of its profits outside the United States, with a whopping $51 billion offshored in both 2014 and 2015, and another $47 billion in 2013. On Forbes’ World’s Most Powerful People 2016, Tillerson clocks in at #24, while President Obama is #48. Secretary of State John Kerry did not make the list.
So why does Rex Tillerson want a job that could easily be seen as a step down in power and influence? A partial answer is that Tillerson turns 65 in March and faced a forced retirement. He also has unfinished business, particularly in Russia, which he likely does not trust the Trump administration to handle. His personal interests and those of Exxon Mobil — often referred to as “Mother Exxon” by employees — have been seemingly one and the same for his entire adult life.
Rex Tillerson is leaving Exxon Mobil in far worse condition than when he took over. This is problematic by several measures, including his own personal legacy and fortune.
In 2003, Exxon Mobil had the most profitable year of any corporation ever. It then beat its own record every year for the next five years. Its $45.2 billion in 2008 remained the highest annual corporate profits ever recorded until surpassed in 2015 by Apple.
Then oil prices crashed in 2009, and have yet to recover. Exxon Mobil’s profits in 2015 — though still a staggering $16 billion — were 65 percent less than 2008’s high, and less than half of what they were in 2014.
Tillerson owns some 600,000 shares of Exxon Mobil stock and was promised approximately 1.8 million more upon his retirement. In response to potentially insurmountable conflicts of interests as secretary of state, however, his golden parachute was altered one week prior to his scheduled confirmation hearing. Tillerson will sell his current stocks worth about $54 million (though valued at almost $25 less per share today than 2014) and convert the rest to $180 million in cash that cannot be invested in Exxon Mobil for 10 years.
Exxon Mobil is cash-poor and debt-ridden, such that, for the first time since the Great Depression, Standard & Poor’s stripped it of a AAA credit rating in April 2016, citing the “reserve-replacement ratio” as the company’s greatest challenge — that is, finding enough new oil reserves to replace that which it pumps from the ground.
The U.S. Securities and Exchange Commission (SEC) is investigating whether Exxon Mobil has been inflating the size of its oil reserves by counting reserves as “booked” — meaning planned and accessible for producing — when they should not be. In response, the company was forced to report in late October that it would likely need to “de-book” some 3.6 billion barrels of tar sands oil in Canada and about 1 billion oil-equivalent barrels in other North American fracking operations. This means that with the stroke of a pen, Exxon Mobil may soon lose nearly 20 percent of its booked reserves — the measure that most determines the value of oil company stock.
To increase its value, therefore, Exxon Mobil needs more oil. Fortunately for the company, it has the potential for a good deal more in Russia’s Arctic.
In 2001, George W. Bush famously looked into Vladimir Putin’s eyes, saw his soul and dubbed him “Pootie Poot.” The Bush administration was not shy about its oil agenda and how far it would go to achieve it. Russian reserves were a key target, and Putin a leading ally.
At the time, Tillerson had already been hard at work building relationships in Russia as president of Exxon Neftegas Limited (1998−1999), the subsidiary responsible for Exxon Mobil’s Russian and Caspian Sea holdings. Between 2011 and 2013, after more than a decade of work, Tillerson signed cooperation agreements for 10 joint ventures with Russia’s state-controlled oil company Rosneft, including those in the Russian Arctic. The Financial Times reported in 2014, “Russia was going to be Exxon’s next mega-area. And the list of mega-areas in the world is very short.”
As a result, Exxon Mobil’s 63.7 million-acre Russian holdings are nearly five times larger than its second-largest holdings — its 14 million acres in the United States.
The Obama administration, however, did not see Russia in the same warm light. In 2014, the president imposed sanctions against Russia after it sent troops into Crimea. The sanctions permit some of Exxon Mobil’s projects, but none of its Arctic or other offshore exploration, not only halting these operations but also making it impossible for the company to book the potentially enormous reserves.
Exxon Mobil’s Russian Arctic holdings became even more valuable when, in late December, Obama joined Canadian Prime Minister Justin Trudeau in banning oil and gas activities in virtually the entire U.S. — and all of Canada’s — Arctic waters. Unlike the Russian sanctions, which were implemented with a presidential executive order that can be overturned by another such order, the drilling ban is more akin to the designation of a National Monument and would require an act of Congress to overrule.
According to Bloomberg, Tillerson made multiple personal visits to the White House since 2014 to discuss, among other things, Russian sanctions. Unable to budge Obama, Tillerson may now just get the job done himself, directing negotiations as secretary of state and advocating for Donald Trump to revoke the sanctions.
Trump has Russian sympathies of his own, and the Russian government made well-apparent its preference for his candidacy over that of Hillary Clinton. Trump is also building one of the most fossil-fueled administrations in U.S. history. Nonetheless, I doubt Tillerson trusts Trump, and he certainly did not support Trump.
The oil industry, including Rex Tillerson, gave its overwhelming financial support to Jeb Bush for president in 2016. Tillerson gave the maximum individual contribution of $2,700 to Bush and $5,000 to Bush’s Super PAC. He gave another $33,400 to the Republican National Committee. He never gave a dime to Trump.
Once it was clear that Bush was no longer a contender, the oil industry, including Exxon Mobil’s employees, shifted support to Clinton. Meanwhile, the Exxon Mobil PAC focused on taking the House and Senate for the Republicans, greatly increasing the money spent on these races. Exxon Mobil ultimately spent nearly nine times more on congressional races (close to $1.5 million) than on the presidency (less than $170,000), just barely edging out Koch Industries to become the oil industry’s biggest spender in the 2016 election, according to data provided by the Center for Responsive Politics.
Why would the oil industry, a GOP mainstay, put its money behind Clinton? Perhaps the companies wanted to back the odds-on favorite; perhaps an industry that works on 25- to 50-year timelines decided that it could weather another four to eight years of a known quantity (even an unfriendly one) like Clinton better than an unknown one like Trump, who could cause irreparable damage. Controlling Congress was the security measure against either presidential victor.
But once Trump became president-elect, a full-court Republican-establishment press composed of George W. Bush, Dick Cheney, James Baker, Condoleezza Rice and Robert Gates reportedly offered “glowing endorsements” of Tillerson either to Trump or to Tennessee Republican Bob Corker, chairman of the Senate Foreign Relations Committee. As I detail in The Bush Agenda, the ties that bind these men and women to Exxon Mobil run deep. In 2000, for example, the oil industry, including Exxon Mobil, spent more money than on any previous election to get fellow oilmen Bush and Cheney into office, while Baker’s law firm has represented Exxon Mobil for decades, and Gates and Rice have a consulting firm that has Exxon Mobil as a client.
Simply put, Exxon Mobil needs the U.S. government to play ball, or at least behave.
Tillerson serving as some sort of Trump overseer for the Bush-era Republican oil establishment, however, should raise many red flags, particularly with the possibility of fellow Bush administration alum John Bolton as his undersecretary. We have already experienced, and continue to suffer the consequences of, the devastation wrought by this group in pursuit of its crude objectives.
By any means necessary
Exxon Mobil has never been shy about working with dictators, be they Hajji Muhammad Suharto of Indonesia, Idriss Déby of Chad, Nursultan Nazarbayev of Kazakhstan, Teodoro Obiang Nguema Mbasogo of Equatorial Guinea, Sani Abacha of Nigeria, José Eduardo dos Santos of Angola or Saddam Hussein of Iraq (to name but a few).
But sometimes alliances go sour. Change is often necessary.
Members of the Bush administration, many of whom had worked together for decades, made fully transparent their ambitions for American “empire” (their word) long before taking office in 2000, including the plan to invade Iraq.
Prior to the March 2003 invasion, Iraq’s domestic oil industry was fully nationalized and closed to Western oil companies. Within six years, it was largely privatized and utterly dominated by foreign firms, including Exxon Mobil. “Of course it’s about oil; we can’t really deny that,” said Gen. John Abizaid, former head of U.S. Central Command and Military Operations in Iraq, in 2007.
Exxon Mobil joined with other Western oil giants to have a direct hand in this long-desired outcome. The company participated in the Cheney Energy Task Force, which first met just 10 days into the new administration. Its work included reviewing “operational policies” toward Iraq and “actions regarding the capture of new and existing oil and gas fields.” In its final report in May 2001, the task force argued that Middle Eastern countries should be urged “to open up areas of their energy sectors to foreign investment.” This is precisely what was achieved in Iraq.
Exxon Mobil met with Cheney’s staff in January 2003, two months before the invasion, to discuss plans for Iraq’s postwar industry, while then-CEO Lee Raymond had many private meetings with longtime friend Dick Cheney. For the next decade, former and current executives of Western oil companies, including Exxon Mobil, acted first as administrators of Iraq’s oil ministry and then as “advisers” to the Iraqi government.
Gary Vogler, an executive and 21-year company veteran, left Exxon Mobil in 2002 to help plan and lead the U.S. government’s oil agenda in Iraq. Vogler later told MSNBC that in an October 2002 meeting in Houston, he and other members of the Energy Infrastructure Planning Group for Iraq were told by Army Corps Lt. Col. Paul Shelton, “Look, the military can get you a lot of information, but you’ve got to keep in mind the cost of that information … may be the lives of 19-year-old Marines and soldiers.”
In April 2003, Vogler joined former Shell Oil CEO Philip Carroll on the ground in Iraq. “The ministry once again has a strong man at its helm,” reported Germany’s Der Spiegel magazine upon Vogler’s arrival at the Iraqi Oil Ministry. By that summer, Exxon Mobil had joined with several other Western oil companies to articulate their own goals for post-war Iraq through the International Tax and Investment Center’s (ITIC) Iraq project. The ITIC’s report, “Petroleum in Iraq’s Future,” released in the fall of 2004, made the case for opening Iraq’s oil industry to foreign oil companies using Production Sharing Agreements (PSAs) that grant companies control over production decisions, the right to book reserves as their own and contract lengths 10 times longer than is typical.
As I detailed on CNN.com in 2013, as the war continued, so too did the administration and industry efforts to open Iraq’s oil sector under their preferred terms. Western oil companies met with the Iraqi government and ultimately signed contracts to gain not all they had hoped for, but enough. In 2009, Exxon Mobil emerged as one of the war’s biggest winners, joining with PetroChina to sign a PSA for the super-giant West Qurna oil field, one of the largest oil fields in the world, and later acquiring exploration contracts in Iraq’s Kurdistan region.
While the war did have its victors, it was of course disastrous not only for Iraqis, but for the entire region, contributing to the formation of the Islamic State, the Syrian War and today’s refugee crisis.
We know very little of Trump’s actual foreign policy agenda other than an intention to put “America First” while turning toward Russia and against Iran. But perhaps we can gain some guidance from Trump’s words to Anderson Cooper in 2015 on taking on the Islamic State: “I’d bomb the hell out of the oil fields …. I’d then get Exxon, I’d then get these great oil companies to go in — they would rebuild them so fast your head will spin.” A “ring” of U.S. troops would then surround the wells, Trump said, protecting the oil companies.
Climate “risk” or climate change?
January will be a busy month for Rex Tillerson. On January 19, he has been called to testify in a federal lawsuit brought by 21 young people alleging that the oil and gas industry has sought to both prevent the U.S. government from taking action to protect the environment from climate change and lock in a fossil-fuel-based national energy system with full knowledge of the extreme dangers it poses. Kelsey Cascadia Rose Juliana, et al. v. United States of America, et al. is before the U.S. District Court of Oregon and will be set for trial this year.
The suit stems from a 2016 investigation by InsideClimate News, as do the state and federal investigations into potential fraud perpetrated by Exxon Mobil against the public and its shareholders regarding what the company knew about climate change and when, and what it did with that information. A finalist for the 2016 Pulitzer Prize, the investigation uncovered that Exxon’s own scientists confirmed in the 1970s that the burning of fossil fuels harms the climate. The company then chose to publicly deny the reality of climate change and finance the climate denialist movement (findings Exxon Mobil disputes).
As secretary of state, Rex Tillerson would lead U.S. negotiations tackling climate change. Tillerson’s rhetoric has led some to conclude that this may not be such a bad thing. The facts, however, reveal that it would be disastrous.
On the one hand, Tillerson acknowledges the reality of climate change and has publicly stated his support for carbon taxation and the Paris Climate Agreement. Exxon Mobil’s lobbying disclosures under Tillerson, however, expose a very different picture. In 2008 and 2009, the company nearly doubled its already top-tier federal lobbying expenditures (spending $29 million and $27.4 million, respectively), outspending every other corporation, to successfully thwart congressional and White House efforts to pass meaningful climate change legislation, dashing the 2009 U.N. Copenhagen Climate Change Conference in the process. Exxon Mobil continues to fund climate denialist organizations and those that are leading the attacks on the Paris Agreement and Obama’s Clean Power Plan, including the American Legislative Exchange Council, the Manhattan Institute for Policy Research and the U.S. Chamber of Commerce.
As for the company’s actual operations, a 2014 study published in Climatic Change journal found that Exxon Mobil has contributed more global greenhouse gas emissions to the atmosphere over the last 150 years than all but one company (Chevron). Under Tillerson, Exxon Mobil has fought climate-related initiatives launched by shareholders and rejected any meaningful commitment to renewable or alternative energy. As I reported for Rolling Stone in 2013, “Since 2002, Exxon Mobil, which took in $45 billion in profit last year alone, put a grand total of $188 million into its alternative [energy] investments, compared to the $250 million it dedicated to U.S. advertising in the last two years alone.”
A close read of Tillerson and the company’s words on the topic, moreover, reveal a very careful focus on “risks” posed by climate change (or by those responding to it). Exxon Mobil’s annual report to the SEC in 2016 stated, for example, “Due to concern over the risk of climate change, a number of countries have adopted … frameworks to reduce greenhouse gas emissions.” Tillerson’s line is one of scientific uncertainty about what those risks may be, blind faith in the ability of technology to address any such risks should they emerge, and a zealous commitment to the necessity and dominance of oil and natural gas.
The language of “risk” implies that all climate effects are yet to come — such as when Tillerson said at the company’s annual shareholder meeting in 2013 that climate change “does present serious risk” yet “our ability to project with any degree of certainty the future is continuing to be very limited.” But, as of 2012, nearly 1,000 children a day were already dying because of climate change, and the estimated annual death toll was 400,000 people worldwide.
In 2008, Exxon Mobil Senior Vice President J.S. Simon told Congress: “The pursuit of alternative fuels must not detract from the development of oil and gas.” To grasp the threat posed by Exxon Mobil and Rex Tillerson, one could replace “alternative fuels” with just about any phrase, word or concept expected of a just U.S. secretary of state — be it “diplomacy,” “equality,” “peace,” “climate justice” or “human rights.”
“This is the purest test you can imagine: Either you’re pro-science or anti-science; either you stand with the people, or you stand with the polluters. It’s that simple,” said Jamie Henn of 350.org. He was speaking in advance of a protest in Cheyenne, Wyo., planned for January 9, to urge Republican Sen. John Barrasso to use his seat on the Senate Foreign Relations Committee to reject Tillerson’s nomination. The protest is part of a month-long series of protests which include “flooding Capitol Hill” with events targeting key senators who play a big role in cabinet picks.
Tillerson is scheduled to appear in January for hearings before the Senate Foreign Relations Committee, where Democrats have promised a bruising fight. They would need just one Republican to join them to block the nomination and Marco Rubio (Fla.) may be that Republican, having voiced concerns about Tillerson’s Russian ties. If the vote goes to the full Senate and Democrats stand united there, just three Republicans would be needed to block Tillerson. John McCain (Ariz.) and Lindsey Graham (S.C.) have expressed deep reservations.
With leading international human rights organizations, including Global Witness and Amnesty International, condemning Tillerson’s nomination in no uncertain terms, and with Greenpeace coordinating petitions and actions with numerous other groups to block it, the fight is far from over. Tillerson’s nomination comes at a time of heightened unity and strength within the movement to keep fossil fuels in the ground, brought to national attention with the years-long battle led by Native Americans to halt the Dakota Access Pipeline.
Terrence Collingsworth, the human-rights lawyer who has fought Exxon Mobil for more than 15 years in defense of the people of Aceh, worries about the damage done simply through the nomination of Rex Tillerson — which, he believes, makes it clear which side the United States government is now on, under the presidency of Donald Trump.
“Imagine what will happen in the future,” he says. “[People around the world] will not feel that the U.S. will back them up in trying to hold these companies accountable.” Instead, he argues, we will have — even more than today — “a sweetheart arrangement between foreign governments and the U.S. government to promote the exploitation of natural resources at all costs.” ν