Dec 19, 2016 (San Diego) Well somebody has done it again. and dropped some documents to the German paper Duddeutche Zeitug. The Guardian picked up the story. Rex Tillerson, nominated by president-elect Donald Trump to take over as Secretary of State is the CEO of a Bahamas-based US-Russian oil company.
This has not been reported until now, and while technically not illegal, though this seems to be a tax haven, it will raise even more questions about Tillerson’s ties to Russia and Russian oil interests in particular. The ties should not be truly that surprising, since he is the head of Exxon, one of the largest oil companies in the world. One of the reasons he does have some diplomatic experience, albeit not diplomatic experience.
These offshore companies are used by many of the wealthiest individuals around the world to hide state assets. During the investigation of the original Panama paper document trove, we learned that among others Vladimir Putin might have some conflict of interests, and taken Russian assets out to Panama. This was not done directly, however, it was done with the help of a friend of Putin’s. Sergei Rolduguin. He is a musician, but also a very close friend of Putin.
These offshore accounts are also used by drug dealers and criminals alike. Incidentally, this leads to a loss of taxes around the world and belies the lie that he will put America Nor is this just the very well connected. Also, people who have saved some money and have it now in these kinds of accounts. According to Gabriel Zucman in The hidden Wealth of Nations:
in the United States and the Office for National Statistics in the United Kingdom, global household financial wealth amounted to about $ 95.5 trillion. Out of this total, I estimate that 8%, or $ 7.6 trillion, is held in accounts located in tax havens.
We have gone into more details on how this affects our economy here, and here. We also have explored the say the current White House has tried to stop some of these practices. Given that the president-elect is listed in that other treasure trove, it will be in the interest of the president-elect to keep them. It brings us once again to the emoluments clause.
There is more, Tillerson has been against the economic sanctions imposed on Russia since the conflict in 2014 in Crimea. It is not a secret that he wants those lifted. It is also not a secret that Exxon had very profitable businesses with the Russian oil company Rosneft. These were affected by the sanctions.
Hawks in the US Senate, including Senator John McCain (AZ) have raised many questions about Tillerson and this should raise even more. Who is Tillerson going to put ahead? And is this a case of what is good for Exxon is good for the United States? It also once again, raises the innumerable conflicts of interest.