Federal Politics

Published — December 18, 2016

Tillerson directed offshore company used in Russia deals

ExxonMobil chief Rex Tillerson. AP Photo/LM Otero

The ExxonMobil chief nominated by Donald Trump to be Secretary of State was a director of an offshore company that had close dealings with Russia

Introduction

Rex Tillerson, the ExxonMobil chieftain nominated by Donald Trump to be Secretary of State, was a director of an offshore company in the Bahamas that is at the heart of Exxon’s close business dealings with Russia.

Tillerson was appointed in 1998 as a director of Exxon Neftegas, an ExxonMobil subsidiary involved in oil and gas operations in Russia, according to leaked documents from the Bahamas corporate registry received by the German newspaper Süddeutsche Zeitung and shared with ICIJ.

Tillerson was named president of Exxon Neftegas in the same year, but his position on the board of the Bahamas-based company has not been previously reported. The Bahamas’ corporate tax rate is zero and it is known for financial secrecy, dubbed by The Economist this year as “the holdout” even among island havens for its reluctance to share tax data.

ExxonMobil said that it incorporates in the Bahamas because of the “simplicity and predictability” of the country’s laws for setting up companies.

“Incorporation of a company in the Bahamas does not decrease ExxonMobil’s tax liability in the country where the entity generates its income,” said Exxon spokesman Scott Silvestri.

The document highlights Tillerson’s business dealings with Russia, which have drawn new attention as he prepares to face confirmation hearings before the U.S. Senate. Under Tillerson’s leadership, Exxon Neftegas managed a major oil and gas project near the island of Sakhalin in Russia’s Far East. After Tillerson was promoted to CEO of ExxonMobil, the oil giant launched a partnership to search for new reserves in the Arctic with Rosneft, a Russian state-owned company.

As Trump prepares for his presidential inauguration, the connections to Russia of people who will likely serve in his administration have come under scrutiny.

In 2013, Vladimir Putin awarded Tillerson with the Order of Friendship, a state decoration for foreigners whose work improves their countries’ relations with Moscow.

“I don’t know what Mr. Tillerson’s relationship with Vladimir Putin was, but I’ll tell you it is a matter of concern to me,” Sen. John McCain, a Republican who will cast an influential vote on Tillerson’s nomination, said last week.

The records also show Tillerson’s direct involvement in Exxon’s extensive network of companies based in the Bahamas. ExxonMobil created at least 67 companies based in the island tax haven, which were involved in operations spanning from Russia to Venezuela to Azerbaijan, according to ICIJ’s documents from the Bahamas corporate registry.

ExxonMobil is headquartered in Irving, Texas.

These far-flung corporate holdings raise questions about the scope of Tillerson’s financial interests. Federal ethics laws require cabinet officials to avoid conflicts of interest, traditionally by divesting their assets and resigning their positions in companies whose value could be affected by their actions in government.

“If he’s a director of corporate entities outside the U.S. including in jurisdictions that are more secretive, it could make it more difficult to ensure that he did divest fully,” said Alexandra Gillies, a specialist on the oil and gas sector governance at the Natural Resource Governance Institute. “It shows that there’s going to have to be a lot of scrutiny on that divestment process.”

Tillerson currently holds an estimated $228 million in Exxon stock, whose value stands to be affected by State Department policies on issues from climate change to sanctions against Russia.

Silvestri, the ExxonMobil spokesman, declined to comment on whether Tillerson would divest from his holdings with ExxonMobil. He noted that Tillerson is retiring from the company, but did not specify whether his retirement as ExxonMobil’s CEO also meant stepping down from board positions at ExxonMobil entities.

The Trump transition team did not respond to ICIJ’s inquiries about whether it was reviewing Tillerson’s offshore directorships and possible financial holdings, or whether it would require him to disclose and divest from these positions.

The document showing Tillerson’s directorship of Exxon Neftegas was among more than 12 million leaked files that were provided anonymously to Süddeutsche Zeitung and then shared with ICIJ, resulting in the Panama Papers and Bahamas Leaks investigations.

Read more in Federal Politics

Share this article

Join the conversation

Show Comments

11
Leave a Reply

avatar
9 Comment threads
2 Thread replies
1 Followers
 
Most reacted comment
Hottest comment thread
8 Comment authors
SOUTH JERSEYTed SiroisMark SullivanTom LarkinAnonymous Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
Mark Sullivan
Guest
Mark Sullivan

Trump needs to conduct these activities because the entire MSM media, excluding Fox, is campaigning against him 24/7/365.

Didn’t Monica’s boyfriend’s wife and various criminal enterprises outspend Trump by almost 2-1?

CapitalistRoader
Guest
CapitalistRoader

Why wouldn’t he get an early start on fund raising? Hillary outspent him two-to-one in 2016. The Dem’s are the party of big money. The President knows this and is attempting to get a jump on it. Of course the Dem candidate will outspend him in 2020 so it’s only rational that he starts fund raising now.

George Young
Guest
George Young

Oh brother. We just 8 years of the Campaigner – in – Chief. Where was this journalistic rectal thermometer then. Just another article about 2000 words too long that merely takes another slap at Trump for something he far from initiated.

j stevenson
Guest
j stevenson

The big difference between Trump and all the rest is his refusing to accept funds from lobbyists, so they don’t have the White House access they are used to. These are the donors who buy the presidency and are as pixxed off that he won the election as are the media and the Dems. Lobbyists have never been shut out of the WH and Trump has told them he is not for sale.

jan v
Guest
jan v

all the lobbyists are running all our government agencies and all the career civil servants who know how to run the country have been fired. YOU think this is a good thing ? what a crock…

thomas alessi
Guest
thomas alessi

I am for Trump

Martin Shellabarger
Guest

J. Stevenson, what are you drinking? Trump has more lobbyists in his administration than probably any other president. Trump is totally “for sale”, and the corporations know it. Grow a brain!

Anonymous
Guest
Anonymous

Trump needs to be impeached and tossed in prison. Then have the key thrown away so he will never be free. Then he can see how it feels not to have freedom.

Mark Sullivan
Guest
Mark Sullivan

Thank you for the usual insightful leftist low IQ Snowflake response.

barney
Guest

hes not imprisoning them hes sending them back to their country chill tf out

SOUTH JERSEY
Guest
SOUTH JERSEY

WHY DONT YOU HAVE FREEDOM?

Tom Larkin
Guest
Tom Larkin

First, something positive. I was happy to learn of empirical information in article. BUT, the article was so slanted against President Trump as to be deemed fake news (“Perhaps Trump just lied.” (Two different issues)). The article mentions that President Trump raised over $67 million, but ended 2018 with $19 million. President Trump spent over $40 million 2016 and 2017. President Trump conducted 57 political rallies. The article notes the hats and T-shirts sold, but NEVER MENTIONS THE INCREASE IN THE NUMBER OF REPUBLICAN SENATORS during a mid-term election that lost the House and the number of political rallies in… Read more »

Ted Sirois
Guest
Ted Sirois

At least Trump is getting donations from willing donors. Fresh from his first election, Obama used billions of our children’s tax dollars to save thousands of union jobs in the car industry and bailed out the banks and many Wall Street businesses. This secured his source of reelection funds for his reelection four years later.

South Jersey
Guest
South Jersey

TRUMP 2020; IS AN AMAZINGLY SMART MAN! VERY ORIGINAL & CREATIVE. I AM HAPPY TO HAVE HIS AS POTUS.

SOUTH JERSEY
Guest
SOUTH JERSEY

THIS ARTICLE WAS OBVIOUSLY WRITTEN BY, A TRUMP-HATE-GROUP. THAT FEELS; IT IS NOT NORMAL TO BE SUCCESSFUL WITH YOUR OWN BRAND NAME. WHEN, IF FACT, IT IS NORMAL! >>>>> THIS IS >>> FAKE NEWS!!! <<<< ie: A PACK-OF-LIES; SPUN INTO; DEFAMATION OF CHARACTER. FOR A SINISTER-AGENDA OF; FASCIST DEMOCRATIC SOCIALIST, COUP D'ETAT

David
Guest
David

Are you on some kind of drugs? Writing in caps makes me think that you are grumpy old fart or a uneducated hillbilly.