Two of President Trump’s most senior Cabinet members became embroiled Thursday in an unusual legal battle over whether Exxon Mobil Corp. under Secretary of State Rex Tillerson’s leadership violated US sanctions against Russia.
Treasury officials fined Exxon $2 million on Thursday for signing eight business agreements in 2014 with Igor Sechin, the chief executive of Rosneft, an energy giant partially owned by the Russian government. The business agreements came less than a month after the United States had banned companies from doing business with him.
Hours after the fine was announced, Exxon filed a legal complaint against the Treasury Department — naming Treasury Secretary Steven Mnuchin as the lead defendant — while calling the actions ‘‘unlawful’’ and ‘‘fundamentally unfair.’’
Trump sought to stack his Cabinet with titans of industry, hoping that their corporate expertise would help them confront global problems.
But this new entanglement shows the flipside of such an arrangement. Cabinet secretaries may bring into office unresolved questions about corporate practices that are now subject to scrutiny by the government they help run. In this case, an agency led by one of Trump’s top advisers is alleging improper behavior from a company that was run by another.
‘‘I can’t think of another case where that’s happened, where you’ve had a senior government official on both sides of the ‘v,’ essentially,’’ said Adam Smith, a former top official in the Treasury Department’s Office of Foreign Assets Control.
The Treasury Department informed Deputy Secretary of State John Sullivan of the impending Exxon fine, and he told Tillerson, State Department spokeswoman Heather Nauert said. That chain was in keeping with Tillerson’s promise to recuse himself from anything involving Exxon, she said.
‘‘The secretary recused himself,’’ she said. ‘‘He is living up to the ethical commitments he agreed to when he became secretary of state.’’ The State Department declined to answer questions over whether Tillerson was involved in the 2014 business deals with Rosneft.
‘‘There’s not a whole lot that we can say about this right now,’’ said Nauert, when asked whether Tillerson would address the matter in person. She referred further questions to the Treasury.
A Treasury spokesman said Tillerson did not personally sign the documents sealing the agreements with Rosneft.
But in its announcement, the Treasury said top Exxon officials showed a ‘‘reckless disregard for’’ the sanctions against Sechin, adding that the company’s ‘‘senior-most executives knew of Sechin’s status’’ and that they ‘‘caused significant harm to the Ukraine-related sanctions’’ by engaging in business agreements with him.
Tillerson and Sechin have had a longstanding relationship, which was critical for ExxonMobil’s ability to maintain its access to Russia’s lucrative oil industry.
The eight business deals were signed when Tillerson was chief executive of Exxon Mobil, a role he recently described as ‘‘the ultimate decision-maker.’’
The $2 million fine represents a tiny fraction of Exxon’s earnings, but it could complicate Exxon Mobil’s future dealings with Rosneft, one of the largest energy companies in the world, which Sechin still leads.
The sanctions against Sechin were part of a broader set of actions meant to economically isolate Vladimir Putin and the Russian government following its support for separatists in Ukraine and the annexation of Crimea. When the measures were announced, Treasury said Sechin in particular ‘‘has shown utter loyalty to Vladimir Putin — a key component to his current standing.’’
The sanctions applied only to Sechin, not his company. Rosneft and the Russian Embassy did not respond to a request for comment.
Exxon Mobil didn’t deny that it entered into the business agreement with Sechin, but it says that guidance from the Obama administration at the time allowed such an arrangement.
