How Rex Tillerson alienated every ally he needs - Axios
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How Rex Tillerson alienated every ally he needs

Illustration: Rebecca Zisser / Axios

The most challenging task in Washington, these days, is finding somebody who'll enthusiastically endorse Rex Tillerson. In just nine months, the Secretary of State has managed to alienate nearly every constituency that matters:

  • The President — not only has there been tension on a personal level, but the president has undercut and clashed with Tillerson over key policy issues like Qatar, North Korea and Iran.
    • Recall a few weeks ago when we reported Trump was growing increasingly frustrated with Tillerson, telling colleagues: "Rex just doesn't get it, he's totally establishment in his thinking."
    • The White House didn't challenge our report and ultimately issued the blandest statement — from a spokesperson, not Trump — in support of Tillerson.
  • The State Department rank-and-file — a typical story about their rock bottom morale, here, and about the department's dysfunction, here.
  • The White House — this goes well beyond the National Security Council. Tillerson's Chief of Staff Margaret Peterlin has accumulated an astonishing number of enemies across the administration.
    • The exchange of "Margaret stories" — including the time she reportedly vetted Condoleezza Rice's request for a phone conversation with Tillerson — has become a frequent topic of conversation among administration officials who've dealt with her.
  • Capitol Hill — Republicans repudiated Tillerson's proposed funding cuts and straitjacketed his organizational proposals. Democrats, well, just read this blistering letter from Sen. Ben Cardin, ranking member of the Senate Foreign Relations Committee: "If the State Department were a private company, it is hard to imagine that it would be allowed to operate for the better part of a year, and maybe longer, without critical senior management."Last week, the Washington Free Beacon reported there were tensions between the State Department and both the White House and key Republican senators, including Tom Cotton, over whether Israel should return $75 million in U.S. aid to comply with an Obama era agreement.
    • Tillerson's spokesman R.C. Hammond categorically denied the report: "The conversations are figments of somebody's imagination." I asked the White House and Capitol Hill sources close to the issue whether they'd corroborate Hammond's statement. Radio silence.
  • The media — Tillerson got off to a bad start, by breaking with precedent and refusing to allow the press corps to travel with him.
  • The foreign policy establishment — Eliot Cohen, who founded an influential foreign policy network with Tillerson's top adviser Brian Hook, told me: "I think he really will go down as one of the worst secretaries of State we've had."
    • There's been a series of brutal reviews calling Tillerson everything from an "unmitigated disaster" (Tufts' Daniel Drezner) to "quite possibly the most ineffectual secretary of state since America's rise to global prominence in 1898." (Max Boot, who told me the only pushback he received after it was published came from one of Tillerson's appointees.)

How did Tillerson get into this mess? We've spoken to 17 sources inside the White House, on Capitol Hill, in the State Department and among leaders of the foreign policy community.

  • A former top Bush administration official sums it up most pithily: "He's got no support from the left on management and no support from the right on policy."
  • What the official means: Tillerson alienated his natural constituency — moderates who view him as a restraining influence on Trump — by what he's done, or failed to do, managerially at the State Department. He's surrounded himself by a tiny circle and hasn't sought much advice from outsiders. And he's got no ideological constituency on the right because he doesn't embrace the forward-leaning posture on human rights, or the aggressive stance on Russia, that Republicans typically expect of their top diplomats.
  • With the media, Tillerson simply didn't try. The New York Times' influential foreign policy columnist Tom Friedman told me he twice asked Tillerson's spokesman whether he could come in for a briefing. He said he was ignored both times. "When I want to think about or discuss U.S. foreign policy today I go to people in the Pentagon," Friedman said.
In Tillerson's defense: Struggling to find influential figures willing to publicly defend Tillerson, I reached out to Tillerson's spokesman, Hammond. He connected me with John Hamre, the president of the Center for Strategic and International Studies, on whose board Tillerson served.
The case for Tillerson, from his allies and defenders:
  • Making best of a tough situation: Hamre says Trump dealt Tillerson a tough hand from the outset by issuing a travel ban that sparked protests from hundreds of State Department officials. Tillerson's friends also argue it's not fair to blame him for the failure to staff his department, saying the White House has been making life hard for him.
    • (The counter-argument, from administration officials, is that after some rough starts, every other cabinet secretary has ultimately managed to work with the White House on appointments.)
  • Strategic thinker: Sen. Bob Corker, chairman of the Senate Foreign Relations Committee, told me: "I believe that he is a strategic thinker who is trying to think through not just the next step but several steps beyond that so that our nation will be best served."
  • Quiet relationship-builder: Hamre says a number of heads of state have personally told him Tillerson has restored confidence about their relationships with the U.S. He points to South Korea, China, and Japan as three countries with which Tillerson has been "quite instrumental" in building constructive relationships.
    • "You have to remember, Mr. Bannon was waging war against China. It was Secretary Tillerson that was able to help structure a much more constructive relationship with China."
  • Restraining influence on Trump: Sources close to the White House point to Tillerson's relationship with Mattis as crucial to keeping Trump on an even keel and restraining him from his most reckless impulses.
  • He's "changing": A House GOP aide told me that after a very slow start, Tillerson has begun to get serious about outreach over the past two-three months. He's having breakfasts and calls with key members, and his staff is facilitating briefings for staff with top officials. "It's a move in the right direction," the source said.
    • Hamre points out that Tillerson spent his whole career in private industry, where it didn't make business sense to "engage the press on the press's terms."
    • Hamre says Tillerson came into the Secretary of State role "without the understanding of the role that the popular media plays in his job. I think he has been changing. Now, he's not changing to the speed that all of you guys want. But he is changing."

Bottom line: Tillerson appears to be making a belated effort to become a public figure and do the normal outreach and human rights advocacy expected of his role. We'll learn soon enough whether he's left it all too late.

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Battery exec leaves Dyson two years after $90 million buyout

Michigan entrepreneur Ann Marie Sastry has left vacuum-maker Dyson, two years after it acquired her controverial lithium-ion battery company, Axios has learned. The $90 million all-cash buyout remains one of the richest lithium-ion deals ever.

Quick take: Sources with knowledge of the situation were not certain of the circumstances of Sastry's departure. But it comes eight months after Dyson relinquished Sakti3's core battery patents, and doubts remain in the field regarding her main claim, asserted repeatedly — that she was on the verge of commercializing much-sought-after solid state battery technology.

Why it matters: For the last two years, Dyson founder James Dyson has spoken of ambitious plans to spend $1 billion to $3 billion to revolutionize batteries and electric cars. He has said said his electric car will ready for the road by 2020. At the time, Dyson's October 2015 purchase of Sakti3 was the spearpoint of the mission, and Sastry's departure suggests more internal turmoil than he has let on.

  • Sastry's Linkedin page says she left Dyson last month. She identifies herself as the founder and CEO of a company called Amesite, which a source said is involved with artificial intelligence and education.

In September, Dyson told Bloomberg that he had created two competing battery teams—Sakti3, plus another that was attempting a different approach to solid state. One explanation for Sastry's departure was that the other team won. In an interview with the Guardian, Dyson said the company's batteries were already more efficient than those in commercial electric vehicles.

At the time of the October 2015 deal and since, numerous leading U.S. battery researchers told me they wondered why Dyson had bought Sakti3. Despite Sastry's robust claims of the company's progress with solid state, she had revealed very little publicly and, since no one else had made much progress, the deep suspicion was that she was exaggerating. Indeed, in reporting for a story at the time of the buyout, former Sakti3 executives told me that the doubters were correct—the company's technology was rudimentary and nowhere near commercial.

Dyson did not offer a comment. Sastry could not be reached.

Dan Primack contributed to this story.

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Bob Corker flips to "yes" on tax reform

Sen. Bob Corker (R-Tenn.), the only holdout on the Senate's initial tax bill, announced Friday that he will vote "yes" on the GOP's tax cuts bill, less than an hour after Sen. Marco Rubio (R-Fla.) said he will also vote yes.

Why it matters: Corker's vote essentially cements the tax bill's passage before the Christmas deadline.

His statement:

"After many conversations over the past several days with individuals from both sides of the aisle across Tennessee and around the country — including business owners, farmers, chambers of commerce and economic development leaders — I have decided to support the tax reform package we will vote on next week.

"This bill is far from perfect, and left to my own accord, we would have reached bipartisan consensus on legislation that avoided any chance of adding to the deficit and far less would have been done on the individual side with items that do not generate economic growth.

"But after great though and consideration, I believe that this once-in-a-generation opportunity to make U.S. businesses domestically more productive and internationally more competitive is one we should not miss. While many project that it is very possible over the next ten years we could be at least $500 billion short on a $43 trillion policy baseline, I believe this bill accompanied with the significant regulatory changes that are underway, and hopefully, future pro-growth oriented policies relative to trade and immigration , could have significant positive impact on the well-being of Americans and help drive additional foreign direct investment in Tennessee.

"In the end, after 11 years in the Senate, I know every bill we consider is imperfect and the questions becomes is our country better off with or without this piece of legislation. I think we are better off with it. I realize this is a bet on our country's enterprising spirit, and that is a bet I am willing to make."

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Release of texts between FBI officials to media was unauthorized

Deputy Attorney General Rod Rosenstein. Photo: Andrew Harnik / AP

The Department of Justice said that some members of the media received early copies of the texts between FBI officials Peter Strzok and Lisa Page, and that the release was not authorized by the department, Business Insider reports.

Why it matters: The texts are part of an ongoing investigation; they were shared with lawmakers on Tuesday night, prior to Deputy Attorney General Rod Rosenstein's testimony to the House Judiciary Committee, and were shared with reporters afterwards. But DOJ spokeswoman Sarah Isgur Flores said some reporters had already recieved them.

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Rubio officially yes on tax bill

Sen. Marco Rubio Photo: Pablo Martinez Monsivais / AP

Sen. Marco Rubio's office has confirmed to reporters that the senator will be voting for the GOP tax cuts bill now that the child tax credit has been enhanced to meet his standards.

Why it matters: This thing looks ready to pass.

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Report: FCC to fine Sinclair $13 million over undisclosed ads

AP Photo/Steve Ruark, File

The FCC plans to fine Sinclair Broadcasting Corporation milions of dollars over undisclosed cancer ads that aired during newscasts over a six-month period in 2016, Reuters reports.

The news comes one day after reports surfaced that the DOJ wants Sinclair to divest roughly 12 local broadcast stations in order for its $3.9 million merger with Tribune Media Company to be approved. It also comes as FCC Chairman Ajit Pai is being attacked for what is seen as a close relationship with Sinclair.

The fine addresses roughly 1,700 commercials that aired for the Huntsman Cancer Institute. According to the report, Sinclair has previously told reporters that the violations were unintentional.

Reuters reports that the fine was approved by the five-member FCC but has not yet been made public. Sinclair's management has always been right-leaning and conservative-leaning Pai has been accused by progressives as being favorable to the broadcaster.

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White House says Western Wall will stay in Israel

Pence and Israeli Prime Minister Benjamin Netanyahu at a 2014 meeting in Israel. Photo: Amos Ben Gershom / GPO via Getty Images

A senior White House official told reporters today that the Trump administration believes the Western Wall in East Jerusalem will remain part of Israel in any future peace agreement with the Palestinians. The issue came up during a briefing to reporters on Vice President Mike Pence's upcoming visit to Israel.

Why it matters: The statement risks further infuriating the Palestinians at a time when the administration is trying to cool down the crisis created by President Trump's Jerusalem speech. The Western wall was occupied by Israel during the Six-Day War in 1967 and was never recognized as part of Israel by any country around the world.

Context: During previous negotiations between Israel and the Palestinians, the U.S. supported the Israeli position that the Western Wall should stay part of Israel, but it was never articulated publicly.

What to watch: The official said Pence will visit the Western Wall during his trip to Israel, and he will do it as the vice president and not as a private citizen. "We cannot envision any situation under which the Western Wall would not [be] part of Israel," the official said. "But as the president said, the specific boundaries of sovereignty of Israel are going to be part of the final status agreement."

The bottom line: After the briefing ended, the White House official noted that the U.S. "cannot imagine Israel would sign a peace agreement that didn’t include the Western Wall."

What's next: In the meantime, White House special envoy Jason Greenblatt will arrive in Israel early next week. It is unclear whether Greenblatt is going to meet any Palestinian officials. Palestinian Authority president Mahmoud Abbas announced he does not see the U.S. as an honest broker and said the Palestinians will not meet with Pence during his visit.

While in Israel, Greenblatt will meet Fernando Gentilini, European Union envoy for Middle East peace. The 28 leaders of EU member states announced yesterday they see Jerusalem as the shared capital of both Israel and Palestine — pushing back against Trump's announcement that the U.S. recognizes it as the capital of Israel.

The White House official added that given the timing, Greenblatt will stay on for Pence’s visit to provide any relevant support.

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Facebook admits that some social media use can be harmful

The Facebook logo is displayed on an iPad. Photo: Matt Rourke / AP

In a new installment of its "Hard Questions" series, Facebook acknowledges that social media can have negative (or positive) effects on people, depending on how they use it.

Why it matters: This might be the first public acknowledgment from the company that its product — and category in general — can have detrimental effects on people.

Facebook is also addressing the topic shortly after two former executives publicly criticized the company for what they described as exploiting human psychology.

Good and bad use, according to research cited by Facebook:

  • Bad: Passive use of social media — reading information without interacting with others — makes people feel worse. Clicking on more links or "liking" more posts than the average user also leads to worse mental health, according to one study.
  • Good: Active use — interacting with people, sharing messages, posts, comments, and reminiscing about past interactions — is linked to improved well-being.
  • It takes two: Interacting with other users is key, according to research. Simply posting on Facebook without interacting with other people isn't enough.

But: This isn't a capitulation from Facebook, admitting that it may be doing some harm. Instead, the company is simply telling us that we just need to use its social network in more positive ways.

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Law school is the popular choice again

Two law students hug after oral arguments in a moot court competition. Photo: Rogelio V. Solis / AP

The number of people planning to attend law schools next fall has increased by 12%, there have been 14% more law school applications and 23 law schools reported 40% increases in applications, according to data from the Law School Admission Council.

Why it matters: Interest in law school has been declining since before the recession, Wall Street Journal reports. Law school deans and advisors told WSJ that the upturn is at least in part due to the legal issues arising from Trump's administration, better discounts at law schools and a revived economy.

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Tillerson breaks with Trump on North Korea for the second time this week

Secretary of State Rex Tillerson urged, for the second time this week, that North Korea abandon its nuclear weapons and enter into negotiations with the U.S. and others, leaving room for a diplomatic solution.

Why it matters: Tillerson's rhetoric doesn't line up with the official position of the White House. President Trump has made clear that he doesn't think negotiations are a viable option in dealing with Pyongyang, and has instead focused on drawing attention to the strength of the U.S. military.

Tillerson's message to North Korea, made during a speech at a UN Security Council meeting Friday:

  • “We have been clear that all options remain on the table in the defense of our nation, but we do not seek, nor do we want, war with North Korea,” he said. “The United States will use all necessary measures to defend itself against North Korean aggression, but our hope remains that diplomacy will produce a resolution.”
  • "Our communication channels remain open. North Korea knows they're open. They know where the door is. They know where to walk through that door when they want to talk."
  • “It can reverse course, give up its unlawful nuclear weapons programs, and join the community of nations, or it can continue to condemn its people to poverty and isolation.”

Go deeper: Trump's gamble on North Korea

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Inside Shervin Pishevar's departure from Sherpa Capital

Shervin Pishevar. Photo: Steve Jennings/Getty Images

Shervin Pishevar yesterday resigned from Sherpa Capital, the San Francisco venture capital firm he co-founded in 2013, following multiple allegations of sexual misconduct (all of which he continues to deny).

A source familiar with the situation says that Pishevar's resignation was voluntary (i.e., he wasn't pushed out). But there has been tension inside the firm over the past several weeks, particularly as Sherpa has kept finding itself playing last-minute defense.

For example, Sherpa was unaware of Pishevar's May arrest in London until just last month, when U.S. news outlets (including Axios) were about to publish stories about it. It also was late to learn that Bloomberg was preparing to publish its initial report on allegations against Pishevar.

Not surpringly, the statements issued yesterday by Sherpa and Pishevar had some major differences. Sherpa thanked Pishevar, but added that it is "deeply committed to our culture of integrity, inclusion, and respect." Pishevar, meanwhile, thanked Sherpa, but also references "truculent opponents out to settle scores."

More details:

  • Sherpa was in the midst of pre-marketing its third flagship fund, as it is more than 70% committed on a pair of funds that officially closed in mid-2016 (but which began soliciting commitments in early 2015, per an SEC filing). Fundraising is now on hold, as the firm tries to figure out its strategy going forward.
  • The fact that Sherpa's current funds are mostly called is a big reason why LPs are unlikely to kill the remaining investment period, as they've done with Binary Capital (which had just raised a new fund). Pishevar's co-founder, Scott Stanford, continues to run the show alongsidea 13-person team, and it's possible that Sherpa could hire a senior investment professional to fill Pishevar's spot.
  • We're unclear on exactly how key-man provisions on the existing funds are structured, but it doesn't sound like they'll be triggered. Pishevar is expected to retain vested carry — as he should, since he did the work — but will no longer have a say in investment decisions (including for existing portfolio companies). He also will no longer represent Sherpa on any boards.