The Treasury Department fined ExxonMobil $2 million on Thursday, finding that in 2014 the oil and gas giant violated sanctions imposed on Russia. At the time, now-Secretary of State Rex Tillerson was CEO of Exxon.
In his current role, Tillerson is tasked with advising the president on the very sanctions his company lobbied against — and now is found to have broken.
In April 2014, then-President Barack Obama authorized the Treasury Department to “designate officials of the Russian Government” and block dealings with those people, according to a Treasury Department report announcing the finding against Exxon. The sanctions were put in place over Russia’s invasion of Ukraine, and they are still in place.
Among the people designated as “blocked” was Igor Sechin, the CEO of Rosneft, an oil company that is 50 percent owned by Russia. Sechin has been called Russian President Vladimir Putin’s “right-hand man.” The following month, Exxon executives signed eight legal documents for oil and gas projects with the Rosneft executive.
“ExxonMobil demonstrated reckless disregard for U.S. sanctions requirements when it failed to consider warning signs associated with dealing” with Sechin, the Treasury Department said. “ExxonMobil caused significant harm to the Ukraine-related sanctions program objectives by engaging the services of [a blocked individual] designated on the basis that he is an official of the Government of the Russian Federation contributing to the crisis in Ukraine.”
Exxon called the finding “fundamentally unfair” in a press release following the announcement. The company said it will challenge the Treasury Department’s ruling, holding that the Treasury’s designation of Sechin was as a private individual, not in his capacity as Rosneft’s CEO.
Exxon has long opposed the Russian sanctions, which scuttled a $500-billion oil deal with Rosneft. According to legal disclosures, under Tillerson’s leadership, Exxon lobbied on the sanctions — although, during his confirmation hearing, Tillerson told senators that he didn’t know whether the company was lobbying for or against the U.S. position.
And the news comes at an awkward time for the Trump administration, which for months has been battling allegations of collusion with Russian government officials who wanted to sway the outcome of the U.S. election.
Tillerson himself has a long relationship with Russian companies and the Russian government. A year before the sanctions violation took place, Putin gave Tillerson Russia’s highest award for a foreign national, the Order of Friendship.
Four years later, Tillerson was the only U.S. official in the room during one of President Donald Trump’s private meetings with Putin during the G-20 summit in June.
Although the Treasury Department found that “the violations constitute an egregious case,” the maximum fines for these violations are set at $2 million, a drop in the bucket for Exxon, which earned $7.8 billion in revenue last year.