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Exxon, Dow Chemical requests to Trump administration raise red flags about corporate influence

April 20, 2017 at 6:45 PM EDT
Companies routinely lobby on their own behalf, a normal practice that helps corporate profits and economic livelihoods. But moves by ExxonMobil and others are fueling scrutiny of the Trump administration and its corporate influences. Norman Eisen of the Brookings Institute and The Wall Street Journal's Jay Solomon join Hari Sreenivasan to discuss how these moves are raising red flags.
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HARI SREENIVASAN: Now: how behind-the-scenes moves by a pair of corporate giants are raising red flags about the Trump administration.

Companies routinely advocate and lobby every day on behalf of their business and shareholders. Sometimes, those matters are not just about corporate profits, but also about the economic livelihoods of workers and communities.

But moves by ExxonMobil and Dow Chemical are fueling scrutiny about the corporate influence within the Trump administration.

April 2012, Rex Tillerson, then CEO of ExxonMobil, visits Moscow, wrapping up a deal with the Russian state oil company Rosneft. It calls for investing up to $500 billion to hunt for oil in the Arctic Ocean and Black Sea.

REX TILLERSON, CEO, ExxonMobil: I would like to thank you for the warm welcome, and it is a historic day for ExxonMobil and Rosneft.

HARI SREENIVASAN: But two years later, the drilling venture was blocked, when the U.S. imposed sanctions on Russia over its annexation of Crimea from Ukraine. Now ExxonMobil is asking the Trump administration to let the Black Sea part of the project go forward.

Tillerson, in his new role as secretary of state, says he will do just as he promised during his confirmation hearing.

REX TILLERSON: As to any issues involving ExxonMobil that might come before me if confirmed as secretary of state, I would recuse myself from those issues.

HARI SREENIVASAN: But his past ties to ExxonMobil mean the request is certain to draw extra scrutiny. Moreover, Russia’s meddling in the 2016 election remains a hot issue in Washington.

Republican Senator John McCain of Arizona, for one, voiced disbelief about the news yesterday. In a tweet, he asked: “Are they crazy?”

At the same time, Dow Chemical is asking the new administration not to impose new curbs on three widely used insecticides. They are diazinon, malathion and chlorpyrifos.

The Associated Press reports Dow and two other manufacturers want the government to set aside federal studies that found the chemicals may be harmful to about 1,800 threatened or endangered species. The companies argue the studies are fundamentally flawed. Environmental advocates say there’s no such thing as perfect lab conditions.

BRETT HARTL, Center for Biological Diversity: You can’t just take an endangered fish, an endangered salmon out of the wild, take it to the lab and then expose it to enough pesticides until it dies to get that sort of data you need. It’s wrong morally. It’s illegal.

HARI SREENIVASAN: The Environmental Protection Agency says only that it’s reviewing petitions as they come in, giving careful consideration to sound science and good policy-making.

As with Exxon, Dow’s influence will be an issue. The company contributed a million dollars to President Trump’s inaugural activities. And, in February, when Mr. Trump signed an executive order on rolling back regulations, Dow’s CEO was at his side.

Let’s look into some of the questions being raised about each of these examples.

Jay Solomon broke the news about ExxonMobil in The Wall Street Journal. And Norman Eisen is a former special counsel to President Obama. His expertise is government ethics. He’s now a fellow at the Brookings Institution.

Jay, let me start with you.

Why does Exxon want this?

JAY SOLOMON, The Wall Street Journal: Well, basically, the Arctic and the Black Sea are kind of one the most sought-after kind of pioneer spots for oil exploration.

And, you know, for their future earnings, for the growth of the business, this is seen as kind of one of the last great places to explore.

HARI SREENIVASAN: How much money are we talking about here? How significant is this potential?

JAY SOLOMON: I mean, President Putin, when they announced the deal in 2012, said it could be as much as $500 billion in investment, and huge amounts of oil and gas is in that region.

HARI SREENIVASAN: Is it typical for these types of exceptions to be asked for? Is it sometimes on humanitarian grounds or other reasons?

JAY SOLOMON: There are. If you look in Iran or Burma, as the Obama administration was kind of pursuing their policies, there were exemptions granted for humanitarian or technology reasons.

But an issue like this that is politically charged with this much money with a country like Russia, it’s pretty unusual that you would see a waiver granted in this situation.

HARI SREENIVASAN: Rex Tillerson, former secretary — or former head of Exxon, now the secretary of state, he has recused himself for two years. Right?

JAY SOLOMON: Yes, he has.

I mean, ultimately, the decision on the waiver is made by an office in the Treasury Department, but because of the national security and foreign policy implications, the State Department, probably some of the intelligence agencies, it’s a broader issue.

But, obviously, when Tillerson got this job, the question was immediately asked, you know, how will your previous job impact the issue of Exxon? And it’s tricky, and already you see Republicans and Democrats saying, not just because of Tillerson, but because of the concerns about Russia’s hacking of the election and the other investigations, that this is not going to get political support.

HARI SREENIVASAN: Norm Eisen, what about the idea that Rex Tillerson has said he will recuse himself for this? Isn’t that the kind of safeguard that we have in place to make sure that nothing untoward happens?

NORMAN EISEN, Brookings Institute: Well, I think it’s important that Mr. Tillerson recuse himself. And he is to be applauded for doing that and for making a complete break with Exxon.

But that doesn’t solve all the problems here. Exxon gave $500,000 to Mr. Trump’s inaugural. There’s an enormous cloud around Russia, not just the violations of national borders and sovereignty that led to these sanctions, but also the violations of our democratic norms. There can be no doubt that they interfered in the election.

The only question now is whether Mr. Trump or those around him knew of it or were involved in it. So, granting a sanctions waiver here just is not called for.

HARI SREENIVASAN: Norm Eisen, I mean, a lot of times, it’s the proximity and the adjacency of facts that ends up leading us to different conclusions.

Until there is some sort of smoking gun or a trail of evidence, are we prejudging?

NORMAN EISEN: Well, I think it’s very important not to prejudge, but at the same time, it’s clear now, there’s a consensus, an intelligence community consensus.

We have just seen documents from a government think tank in Russia demonstrating an interference in our elections, what we can describe as an act of gray war by doing this. It’s an extraordinary hostility against the United States. And there’s substantial indications that there have been contacts by those who were in and around Mr. Trump.

There’s very substantial evidence that raises serious questions here, and that goes to the political climate for this sanctions waiver. I don’t think it’s going to be granted.

HARI SREENIVASAN: Jay Solomon, you mentioned this a little bit, the political climate here. What kind of support or lack of support is there when you have, say, Senator McCain tweeting, “Are you crazy?” in the case of Exxon?

JAY SOLOMON: No, I think it’s tough.

I think Exxon’s argument is, you know, we have to basically start drilling by the end of this year, or we’re going to lose this concession, and if we don’t get it, the European companies that are already starting to mobilize in this area, they have been granted some waivers from the European Union to pursue this. So, you know, if we don’t get, it’s going to be developed, you know, anyway, and then American jobs and money is going to be hurt.

That’s what they’re going to argue. But I also agree, it’s going to be very difficult to gin up political support in an environment where Russia, whether it’s the hacking or the accusations of collusion or Ukraine, it’s just they have not given President Trump anything to work with either, the Russians.

So, I agree. I think it would be very difficult for the Trump administration to get political support.

HARI SREENIVASAN: Norm Eisen, do you have different concerns about the issues with Dow?

NORMAN EISEN: Well, mercifully, Dow is not accused of any improper assault on our democracy.

But we do have an even larger political contribution to the Trump inauguration, $1 million from Dow. You have the Dow CEO, who is seen at Mr. Trump’s side. He has extraordinary access in the White House, chairs a group that advises Mr. Trump, was there when Mr. Trump signed his executive order relating to cutting back regulation.

And now you have Dow’s request to set aside the science — the U.S. government has made scientific findings about these organophosphates and the harms they cause to — set aside that science and relieve regulation. It doesn’t smell right.

HARI SREENIVASAN: Norm Eisen, how different is this from the revolving door that people so hate about Washington, that people come right out of government, go right into the private sector, and then oftentimes right back in if the administration changes?

NORMAN EISEN: Well, the problem with the Trump White House is that they removed the revolving door and just threw it open, and it’s being flooded with corporate executives who are coming in with lobbyists.

They removed the lobbying ban that President Obama had in his ethics executive order. And everybody believes that business has to have a seat at the table, has to be on a level table, though. The problem is, it appears that the table is tilted to disproportionately favor business as a special interest, beyond the public interest, and so that is worrying. It’s in a way worse than the revolving door.

HARI SREENIVASAN: All right, Norm Eisen of the Brookings Institution and Jay Solomon from The Wall Street Journal, thank you both.

JAY SOLOMON: Thank you.

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