XOM Exxon Mobil Corp

By Peter Nicholas and Bradley Olson 

President-elect Donald Trump is expected to nominate Exxon Mobil Corp. Chief Executive Rex Tillerson to be secretary of state, a transition official said Saturday, a selection that would reach outside the traditional foreign policy establishment to elevate a global business deal-maker.

Mr. Trump hasn't yet made a final decision, the official said, but the president-elect heaped praise on Mr. Tillerson in an interview released Saturday.

"He's more than a business executive; he's a world-class player," Mr. Trump told Fox News in the interview, to be broadcast Sunday. "He's in charge of I guess the largest company in the world."

Mr. Trump called it "a great advantage" that Mr. Tillerson already knows "many of the players," noting that he does "massive deals in Russia."

Those deals would be certain to come under scrutiny in confirmation hearings before the Senate. A number of Republicans have urged Mr. Trump to be wary of Russia, warning that it is trying to expand its influence in ways that run counter to U.S. interests in places such as Ukraine and Syria.

The nomination would also put Mr. Trump's intentions toward Russia in the spotlight just as controversy is intensifying over reports that the Central Intelligence Agency has concluded that a Russian-led hacking effort of U.S. email accounts was intended to boost Mr. Trump's election chances.

Mr. Tillerson, 64 years old, met privately with Mr. Trump on Saturday, four days after their first meeting.

Among those considered for the post, Mr. Tillerson has perhaps the closest ties to Russian President Vladimir Putin, having negotiated a 2011 energy partnership deal with Russia that Mr. Putin said could eventually be worth as much as $500 billion. In 2012, the Kremlin bestowed the country's Order of Friendship decoration on Mr. Tillerson.

This pre-existing relationship with Mr. Putin complements Mr. Trump's push to improve U.S.-Russia ties.

Since Mr. Trump began vetting candidates for secretary of state, Mr. Tillerson's stock has climbed steadily. He moved ahead of better-known hopefuls with established political credentials -- including 2012 Republican presidential nominee Mitt Romney -- who had multiple conversations with Mr. Trump about the job. Mr. Tillerson is viewed by some of Mr. Trump's advisers as a mold-breaking pick who would bring an executive's experience to the diplomatic role, said a person involved in the process.

Tapping Mr. Tillerson for the job would be a "Trumpian" move, the transition official said.

Mr. Trump is expected to make a formal announcement about his State Department pick in the coming days.

An Exxon spokesman declined to comment.

Mr. Trump said in a statement on Friday that former New York Mayor Rudy Giuliani had taken himself out of the running for the diplomatic job and other administration posts late last month.

With Mr. Trump's decision not yet final, other candidates who remain in the running, apart from Mr. Romney, are former Central Intelligence Agency director David Petraeus, former U.S. Ambassador to the United Nations John Bolton, and U.S. Sen. Bob Corker (R., Tenn.), people familiar with the matter said.

If Mr. Trump selects Mr. Tillerson, it would add a seasoned business executive to a team that already includes three retired generals. As Exxon's CEO since 2006, Mr. Tillerson could leverage existing relationships with numerous world leaders.

Exxon has a large global presence, and this could introduce sticky conflicts of interest if Mr. Tillerson is selected. The company explores for oil and gas on six of the world's continents and has operations in more than 50 countries.

Mr. Tillerson, who is slated to retire next year, has retirement funds worth tens of millions of dollars, a value that could potentially be affected by State Department activities. For example, he could benefit from such potential department actions as the lifting of sanctions on Russia.

Democrats signaled that they would raise such issues in a confirmation hearing. Sen. Bob Menendez (D., N.J.), a Foreign Relations Committee member, said Mr. Tillerson would bring a number of conflicts of interest to the job and called his expected nomination "alarming and absurd," offering Russia "a willing accomplice in the president's cabinet guiding our nation's foreign policy."

The Obama administration and European allies have imposed several rounds of economic sanctions against Russia following its annexation of Crimea in 2014. The Obama administration also has accused the Kremlin of backing militants in eastern Ukraine even after the annexation of Crimea.

As Exxon's CEO, Mr. Tillerson has spoken against sanctions on Russia. Mr. Tillerson's work there dates to when Mr. Putin rose to power after Boris Yeltsin's resignation.

"We always encourage the people who are making those decisions to consider the very broad collateral damage of who are they really harming with sanctions," he said at the company's annual meeting in May 2014.

Mr. Tillerson grew up in Texas and in 1975 joined Exxon, where he has spent his entire career. He has long been closely affiliated with Republican politicians and the Boy Scouts of America, but he has never worked in government.

While unusual, the choice of a corporate leader as secretary of state wouldn't be unprecedented. George Shultz was the executive vice president of engineering giant Bechtel before he became secretary of state under President Ronald Reagan, though Mr. Shultz had been in government in a prior administration.

Mr. Trump also is expected to tap Rep. Cathy McMorris Rodgers (R., Wash.) to lead the Interior Department, according to a person familiar with the matter.

If confirmed by the Senate, she would lead Mr. Trump's efforts to open up federal lands and waters to fossil-fuel development and reverse environmental policies the Obama administration has pursued.

Since her first election to Congress in 2004, Ms. McMorris Rodgers has risen in the ranks and is now the fourth-highest-ranking Republican in the House and the highest-ranking GOP woman in Congress. She also serves on the Energy and Commerce Committee.

--Damian Paletta, Amy Harder and Mara Gay contributed to this article.

Write to Peter Nicholas at peter.nicholas@wsj.com and Bradley Olson at Bradley.Olson@wsj.com

(END) Dow Jones Newswires

December 10, 2016 20:45 ET (01:45 GMT)

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