XOM Exxon Mobil Corp

By Byron Tau, Bradley Olson and Rebecca Ballhaus 

WASHINGTON -- Oil giant Exxon Mobil Corp. has a long history of advocacy and engagement around issues related to international sanctions, including membership in a Washington-based trade group that strongly opposes unilateral U.S. sanctions against foreign countries and entities.

Yet, Rex Tillerson, the former CEO of Exxon Mobil, argued forcefully Wednesday that neither he nor his former company ever lobbied against U.S. sanctions on Russia or Iran, a statement that a number of senators aggressively questioned in a marathon day of confirmation hearings over his appointment to serve in the incoming administration of President-elect Donald Trump as secretary of State.

"I never lobbied against the sanctions. To my knowledge, Exxon Mobil never lobbied against the sanctions. Exxon Mobil participated in understanding how the sanctions were going to be constructed. And was asked and provided information regarding how those might impact American business interest," Mr. Tillerson said to the committee in a hearing that lasted most of Wednesday.

His testimony may reflect his interpretation that public comments in opposition to certain sanctions and private efforts to weaken or scale them back don't constitute a formal effort to lobby against them.

However, his company and its outside consultants have filed more than 30 lobbying disclosure reports, listing sanctions issues in Iran, Russia and Libya as among its issues. Those reports didn't specify whether Exxon supported or opposed the various sanctions efforts -- but the company in financial disclosures and public statements by executives like Mr. Tillerson have indicated that sanctions often hurt the company's business interests.

In addition, the company is a dues-paying member of USA*Engage, a corporate-funded advocacy group that opposes U.S. sanctions and has called on lawmakers to reject unilateral efforts aimed at punishing Iran, Russia, Myanmar and Cuba, among others.

At issue is a policy question about the use of sanctions, a major tool of U.S. diplomacy that gives the executive branch the ability to deter, compel or punish states, foreign individuals and groups. In Wednesday's hearing, Mr. Tillerson expressed concerns about the idea of sanctions, which he says can sometimes punish U.S. businesses.

"It's important to acknowledge that when sanctions are imposed, they by their design are going to harm American business. That's the idea -- it's to disrupt America's business engagement in whatever country's being targeted for sanctions," he said.

Exxon spent $8.8 million on lobbying the federal government in the first three quarters of this year, making it the top lobbyist in the oil-and-gas industry, according to a Center for Responsive Politics analysis of the most recent disclosures.

Exxon has spent years lobbying the State Department on trade and energy issues, including U.S. relations with Russia. In 2014, the company lobbied the department over congressional legislation on sanctions against Russia, according to federal lobbying disclosures. The bill wasn't approved by Congress.

The company also sought to have some of its continuing projects exempted from sanctions, a request that would have mirrored European restrictions on business in Russia after the country seized Ukrainian territory in 2014. The Obama administration denied the request, and Exxon had to withdraw from some operations in the country, according to people familiar with the matter.

Exxon sought permission for an extension to finish drilling a well, because of safety concerns, a request that was granted. Once Exxon exited, Russia announced that the well was a near-billion-barrel-discovery.

Exxon has said its losses due to sanctions would amount to $1 billion, but the company sees some of its work in Russia, such as in the Arctic, as on "pause" because of the restrictions.

A spokeswoman for USA*Engage confirmed that Exxon is a member of the advocacy group, which is part of the National Foreign Trade Council -- a pro-free trade industry group funded by major corporations. The group doesn't oppose all sanctions and has backed sanctions in conjunction with other international partners -- in part to ensure that U.S. businesses aren't restricted while foreign companies remain free to do business with the targets of the sanction.

"Exxon Mobil regularly engages with lawmakers and others to discuss the potential impact of sanctions and to express our view that sanctions should treat American companies fairly. We do not express an opinion as to whether or not sanctions should be imposed; that is a decision for policy makers," said a spokesman for the company.

In Washington, corporations routinely channel their more controversial lobbying practices through trade associations to give themselves "plausible deniability," said Lisa Gilbert, director of Public Citizen's Congress Watch division.

The practice "gives them the ability to say one thing in their mission statements or to their shareholders, and straightforwardly support the policies out the other side of their mouths," Ms. Gilbert said.

Write to Byron Tau at byron.tau@wsj.com, Bradley Olson at Bradley.Olson@wsj.com and Rebecca Ballhaus at Rebecca.Ballhaus@wsj.com

(END) Dow Jones Newswires

January 11, 2017 22:34 ET (03:34 GMT)

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