At The Week Pascal-Emmanuel Gobry makes his case in favor of Rex Tillerson for Secretary of State:
But I see Tillerson as an excellent, very inspired pick. Let me explain.
The objections come down to mainly two things: Tillerson’s qualifications, and his seemingly friendly ties to Vladimir Putin, who (now infamously) awarded Tillerson Russia’s Order of Friendship. Let’s take those gripes one by one.
Dealing with governments is an integral part of running a major oil company. Governments play key roles in any energy deals, and dealing with those governments is part of the job. An in-depth feature by Politico’s Hounshell describes Tillerson’s rise through the ranks at ExxonMobil as driven at least in part by his skill — and toughness — in dealing with governments, including trouble spot governments.
In other words, there’s no question that Tillerson is intimately familiar with the geopolitics, politics, and characters involved in many of the trouble spots that are key for American policy, including places like Russia, Central Asia, the Middle East, West Africa, and Venezuela. Before being assigned to Russia, Tillerson spent three weeks in the Library of Congress reading books about Russian history and politics. He’s no dummy.
Just because he didn’t take part in international negotiations and geostrategic thinking as a State Department diplomat or member of a Senate committee doesn’t mean he doesn’t know how to do those things; in fact, he has done them throughout his career, and pretty successfully as far as we can tell. That makes him exceptionally qualified.
I don’t have strong feelings one way or another about this appointment. As I repeatedly said about President Obama’s cabinet appointments, I think that the president deserves substantial deference when it comes to picking his own team.
Additionally, I’m not sure I can distinguish among principled opposition, partisan opposition, just plain opposition, and turf war. I sense some of each in what I’ve read on Mr. Tillerson’s appointment.
Rachel Maddow had a long piece last night on Tillerson’s willingness – even eagerness – to take over Chad’s oil production after the Chadian dictator, Habré, violated a deal with the US to share his oil revenue with the people. Chevron was ejected because they’d been part of that humane deal. Exxon took over, meaning that Tillerson put profit ahead of basic human decency, and ahead of US government human rights policy, and is now funneling cash to Habré, who is (surprise!) increasing the size of his army.
Chad’s thug-du-jour broke a deal with the US government, screwed his people, and Tillerson got a bit richer. When a bloody revolution comes to Chad will Tillerson try to broker a peace? Will he even grasp his own part in the tragedy?
http://www.msnbc.com/rachel-maddow/watch/tillerson-history-at-exxon-one-of-defying-opposing-us-interests-832531011949
M Reynolds,
Share oil revenue with the people in what way? I would guess stipends, based on citizenship, or who knows, party loyalty?
But in the end, what good does free money do anyone?
Today, we have a living example of the end results of that way of running an economy, Venezuala. Economy is a Joke and the people are starving.
Wishful thinking ,doesn’t work.
Michael,
You and Maddow have even the basic facts wrong. Either Maddow’s researchers are incompetent or an editorial decision was made to leave key facts out of her 16 minute vlog.
Is there a good source for more about the story?
General background: http://www.cfr.org/chad/chads-oil-troubles/p10532#p0
http://www.nytimes.com/2008/09/11/world/africa/11chad.html
Chevron had a smaller stake in the project (25%)
Anyway its irrelevant. I didn’t know Exxon was supposed to do nation-building; isn’t that a government’s job? I suppose they could have just left their investment and let the Chinese waltz in.
Americans are bizarre. Blast an oil company for doing what it does, but not a mouse squeak when the US directly sells munitions to Saudi Arabia to do worse than what Chad has done.
Lots of eyeball searing, insomnia cure at the IMF’s Chad page. Interesting suit in Chad’s courts at Oil and Gas 360 hit ExxonMobile for $75 billion over unpaid royalties.
Then lets also recall amidst the usual banditry and small scale rebellions, Chad has fought Boko Harum. Despite reports of mass human rights violations and war crimes in that fight, Chad was granted an exemption from sanctions over the use of child soldiers by the current administration.
There’s no good single source and I don’t want to try a ton of links. Here’s a decent, if longish, primer on the political and risk mitigation background for the deal. Consolidated reporting from central Africa is very rare. I am more of an East Africa guy and don’t know a ton about Chad except for the basics. But an hour of research during dinner uncovered the following. I can tell that Maddow’s research team relied too much on Google – if you search using obvious terms the first page of results kinda sorta gives her narrative if one doesn’t look any further and doesn’t look too deep. Anyway, some of the things that were missing:
– Chevron and Patronas were only temporarily kicked out of the country – the dispute over corporate “taxes” was resolved a couple months later and both companies were back in. They never lost their financial stakes in the consortium. Chevron eventually sold it’s stake to Chad in 2014 for $1.3 billion dollars, I believe Petronas still has their share. Bottom line is that Michael’s and Maddow’s characterization that Chevron and Petronas were ejected leaving only Exxon to roll around naked in the profits is flat out wrong.
– Prior to signing the deal in the late 1990’s, the international sponsors for the project conditioned the agreement on Chad reducing it’s military forces by 50%, which it supposedly did. After the deal this reduced force, combined with massive oil revenues, made the Chadian government a prize for the taking – not surprising given this is a country that’s spent most of it’s existence in civil war or teetering on the brink of civil war. This was a big driver for why Chad wanted to increase the size of it’s army which brings us to:
– Chad was in a civil war from 2005-2010. Somehow Maddow completely fails to mention this fact while continually harping on Chad buying weapons. Hmm, why would she not mention that?
– The funding deal had a couple of major flaws – first there was no actual Western support for the proposed development projects beyond supervision. Chad, near the bottom on the world development index, had no capacity to implement the envisioned development projects. Holding money in escrow bank accounts doesn’t magically create skilled planners, engineers and a trained workforce to utilize it. To say nothing of the legal and judicial institutions required. Secondly, oil prices were 2-3 times what was assumed under the terms of the deal (remember the high oil prices in the mid-oughts?) – this created a huge amount of revenue which was unevenly distributed and broke the predicted allocation model. It also made everything worse – Controlling the government became a bigger prize, which generated more rebel activity and there was no way to spend even more money on development.
– The funding agreement collapsed in 2008 after the capital was raided by rebel forces, not in 2006 after Tillerson takes over Exxon as Maddow claims. The rebel forces made it to the presidential compound and were only turned back when French Legionnaires finally intervened on behalf of the government. The civil war became existential.
– I don’t think Maddow actually mentioned his name, but the dictator is Idriss De’by. Habre’, named by Michael above, was an earlier dictator.
– The World Bank admitted at the beginning that this was a “High risk” gamble. Oil has been discovered in southern Chad way back in the 1970’s (not the early 2000’s like Maddow claims – her entire opening few minutes about avoiding the resource curse is just wrong), but the place had been such a mess that no sane oil company would invest the billions in upfront costs to access it. So the do-gooders in the World Bank and western governments teamed up with the oil companies to spread the risk, hoping that Chad would break a long established pattern of infusing petrodollars into poor, corrupt mostly tribal societies. No one should be surprised that this failed.
So, what does all this say about Tillerson? Hell if I know, but the people who want to block him will need to come up with something a lot more substantial than this very thin reed.
Which is just what Maddow said.
Suspect this is not a binary question and the answer will end up being “both”.
Steve
Thanks, Andy.
Christ, Michael. You got called out by someone who provided a much richer and detailed perspective and you go for a little nugget.
Next thing you’ll be telling us that In N Out burger wages will make America great again.
Andy — Outstanding post!
Gray Shambler — on distributing oil revenues, have you considered Norway as an example?