By Tory Newmyer
December 10, 2016

Saturday Morning Post: The Weekly View from Washington

With the news late Friday that Exxon Mobil CEO Rex Tillerson has emerged as Donald Trump’s top pick for Secretary of State, early attention has focused, appropriately, on the chief executive’s extensive work with Vladimir Putin’s regime. Tillerson’s decade-long friendliness with the Russian ruler aligns him with Trump on a critical piece of the incoming administration’s foreign policy agenda. And the nature of the Trump squad’s posture toward Russia took on a darker and more urgent cast with the report Friday night that the CIA has concluded Russia meddled in the election to help the Republican win. If Tillerson in fact gets the nod, look for Senate Democrats to make a confirmation issue of his opposition to Russian sanctions. Lifting them could be a boon to his retirement funds, a writ small version of Trump’s conflicts of interest.

But Tillerson’s advocacy in other areas grates against Trump’s program. A rock-ribbed Republican, the Texan nevertheless has staked out positions that put him at odds with the party’s new hardline. Most notably, Tillerson has passionately defended the Common Core education standards that in recent years became a bête noire of the Tea Party and which Trump railed against in the GOP primary. (Tillerson went so far as to cut off Exxon campaign contributions to pols who crossed him in the fight, though it arguably has no direct bearing on the company’s bottom line.) That issue would fall outside his portfolio as the nation’s top diplomat.

Yet at the helm of the State Department, Tillerson would have a role shaping trade policy. On that front, he’s consistently called for “working to lower trade barriers and end protectionist policies,” as he said in a 2013 speech, and advocated for the Trans-Pacific Partnership. The approach represents a direct affront to the core of Trump’s populist economic pitch — while placing Tillerson squarely in the mainstream of the thinking at the Business Roundtable, the Washington trade group representing top CEOs. Trump nearly tapped another BRT stalwart, JPMorgan CEO Jamie Dimon, for Treasury Secretary, before Dimon took his name out of the running. The Wall Streeter has since been elected to chair the BRT for the next two years. Trump is poised, meanwhile, to name Goldman Sachs president Gary Cohn to lead the National Economic Council, which coordinates White House economic policy. The appointment would add a third executive from the firm to the top ranks of Trump’s governing team (though one, senior Trump advisor Steve Bannon, hardly fits the mold). That, despite the fact that during the campaign, Trump made Goldman one of his favorite targets, calling it out as a key cog in a dastardly Wall Street-Washington machine he promised to smash.

Word of the Cohn appointment broke Friday morning as FedEx CEO Fred Smith, another BRT member, wrapped up a speech in Washington meant to send a stern message to Trump about his trade agenda. Smith said scrapping the North American Free Trade Agreement would be “catastrophic” for the U.S. economy and called protectionism broadly a recipe for failure. As the day wore on, it appeared he had preached to a gathering choir. Trump’s hostility to free trade has been his most consistently held policy position, dating back to the 1980s. But since the election, he’s shown flexibility in the extreme on his defining campaign pledges. That doesn’t mean Trump will soon be dusting off the TPP, which by all accounts will stay dead. If his recent appointments are a clue, however, much of the rest that’s put Trump at odds with the corporate consensus may be negotiable.

Tory Newmyer
@torynewmyer
tory_newmyer@fortune.com

Top News

• Russia interfered in election to help Trump, CIA concludes

The Russian government hacked Democratic party and individual accounts and leaked the information in a deliberate campaign to tip the presidential election to Donald Trump. That’s the conclusion the CIA reached back in September, according to a new report from the Washington Post. The intelligence agency briefed Congressional leaders from both parties on their findings back in September. At the time, the White House was hoping to round up bipartisan support for a statement calling out the intrusion. But some Republicans, including Senate Majority Leader Mitch McConnell (R-Ky.), balked. On Friday, the administration said President Obama has ordered a full review of Moscow’s meddling. In a statement, the Trump transition team cast doubt on the findings, calling the intelligence community’s credibility into question. “These are the same people that said Saddam Hussein had weapons of mass destruction,” the statement read. “The election ended a long time ago in one of the biggest Electoral College victories in history. It’s now time to move on and ‘Make America Great Again.’ ” 
Washington Post

• Dems cave, avoid government shutdown

Lawmakers narrowly avoided a government shutdown on Friday when Senate Democrats backed off demands for longer-term benefits for coal miners in a funding bill. Democrats from coal-producing states led the charge for the workers but caved as the clock wound toward a midnight deadline on Friday. By capitulating, Democrats helped ensure government functions will stay funded through April. 
Politico

• Trump’s “Apprentice” role highlights conflict concerns

Trump’s insistence on maintaining a stake in his business interests is sowing a growing alarm among ethics experts, who say the arrangement presents unprecedented conflicts of interest for a president. Rather than heed calls to fully divest from his holdings, however, Trump is doubling down, signaling he plans to keep an active role as a businessman even as he leads the nation. The latest: Trump will serve as an executive producer on the upcoming season of NBC’s The Celebrity Apprentice, earning what one estimate pegged at a low five-figure compensation per episode. Those fees would be paid by MGM, which holds a majority stake in the show’s production company, rather than NBC. Still, the work would create a shared business interest between Trump and a network with several news outlets covering his presidency. Trump has said he will give a news conference on Thursday to discuss how he plans to handle his business dealings. 
Fortune



Around the Water Cooler

• Trump won’t idle his bullying Twitter fingers

Melania Trump has pledged to tackle cyberbullying as First Lady. As many wags noted when she first discussed those plans during the campaign, she might want to start at home. Even since winning the election, her husband has continued to use his Twitter account to bully private citizens and companies. One difference now is that his words carry the power to move markets, as Trump demonstrated this week when he attacked Boeing’s contract to build a new Air Force One. The tweet, which came minutes after the Boeing CEO made critical comments about Trump’s attitude toward China, took a bite out of the plane maker’s share price. 
Fortune

The Dow’s “Trump Bump” owes a lot to Goldman Sachs

Trump made Goldman Sachs into one of his favorite rhetorical tackling dummies on the trail. But the performance of the bank’s stock since Trump’s win has been so strong, it alone accounts for 29% of the Dow’s post-election bounce. The broader measure of the S&P 500 is also riding high thanks to the strength of financial sector stocks, which are rising in anticipation of higher interest rates and Trump’s promised rollback of industry reforms the Obama administration implemented after the financial crisis. 
Fortune

• Ultra-rich get ultra-access to Trump team

Trump regularly blasted the “pay to play” status quo in the political system he ran to shake up. A new analysis shows he’s rewarding his richest donors in just the fashion he decried. Just this week, Trump tapped World Wrestling Entertainment executive Linda McMahon, who gave $6.2 million to support his election, to head the Small Business Administration. A handful of six-figure contributors are helping round out his early cabinet picks: Wilbur Ross at Commerce, Betsy DeVos at Education, Andy Puzder at Labor, and Ben Carson at Housing and Urban Development. Hedge fund manager Robert Mercer, who gave $2 million to a pro-Trump super PAC, along with his daughter, Rebekah, is poised to shape an outside group aimed at providing grassroots support for Trump’s agenda. Tech investor Peter Thiel, who gave $1 million to the super PAC, now serves on the executive council of Trump’s transition team. The list goes on, and it raises questions about whether those now making critical policy choices for the president-elect effectively bought their posts. 
Center for Public Integrity

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