The United States Treasury Department is imposing a $2 million fine on Exxon for the oil company’s "demonstrated reckless disregard” in failing to comply with strict sanctions against Russia. The fine is the maximum allowed by law. The current Secretary of State, Rex Tillerson, was Chief Executive of Exxon when the “egregious” violations occurred. Tillerson was not involved in the decision to punish the company he once led, according to State Department spokeswoman Heather Nauert.
"The secretary continues to abide by his ethical commitments, including that recusal from Exxon-related activities," stated Nauert.
According to the Treasury, Exxon's U.S. subsidiaries "dealt in services" with a Russian oligarch named Igor Sechin. Exxon signed "eight legal documents" with Sechin for access to Russian gas and oil projects. As the CEO of Russian state oil company Rosneft, Sechin is closely aligned with the Kremlin.
“Sechin was at the helm of Rosneft in 2011 when Exxon(XOM) signed a massive joint venture with the Russian oil company to drill for oil in the Arctic,” reports CNN Money. “Putin himself attended the ceremony celebrating the deal, while Sechin hailed the partnership as ‘more ambitious than man's first walk in space.”
Exxon’s business dealings with Sechin are particularly troublesome given how close the Russian oil mogul is to President Vladimir Putin. In fact, Sechin was personally sanctioned in 2014 by the Obama administration for "contributing to the crisis in Ukraine.”
However, Exxon isn’t accepting the legal justifications used by the Treasury Department to impose the relatively low fine.
In a legal complaint filed against the Treasury, Exxon claims that the fine is “unlawful” because it hinges an “arbitrary” interpretation of Russia-related sanctions.