Energy

Mnuchin Asks Judge To Ditch Lawsuit Claiming Gov’t Fines Against Exxon Are Unconstitutional

REUTERS/Brendan McDermid

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Chris White Tech Reporter

Treasury Secretary Steven Mnuchin filed court papers Tuesday dismissing claims the agency violated ExxonMobil’s constitutional rights after leveling a $2 million fine against the company for violating Russian sanctions.

Mnuchin asked a Texas judge to toss out a case Exxon filed in July after Treasury officials accused the company of violating Ukraine-related sanctions. Exxon allegedly signed oil and gas contracts in Russia with Igor Sechin, the CEO of Rosneft OAO who is on the Treasury’s sanctioned list.

The oil producer disputed the government’s allegations shortly after the agency leveled the claims and said the fines were “fundamentally unfair.” The alleged violations occurred while now-Secretary of State Rex Tillerson led the company.

Exxon did business with Rosneft OAO, not Sechin, the company claimed after learning of the fine. The 2014 sanctions were brought against the Russian oilman, Exxon added, leaving the company’s former CEO Rex Tillerson free to engage with the giant Russian oil producer.

But the Treasury officials argued that Exxon’s connections with the company showed “reckless disregard.” The government also alleges company executives knew Sechin was blacklisted. Exxon caused “significant harm” to the program, the government alleged.

Sanctions experts suggested the agency’s actions are strange.

The Treasury’s decision implies there are high up elements within the Trump administration that were probably unaware of the fines, Thad McBride, an international trade lawyer at Bass, Berry & Sims, told reporters in July. The Treasury’s claims that Exxon’s “senior-most executives” were involved in violations is almost certainly a dig at Tillerson, he added.

“You have to wonder how far up the chain at the Treasury Department this went,” he said at the time, noting the document appeared to be referencing Tillerson’s knowledge of the deal. “It is extremely unusual that Treasury would do that.”

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