Rex Tillerson is waiting – waiting Until January 20th, 2018

So many people are wondering why Rex Tillerson, Secretary of State, is playing a poor second fiddle to Donald Trump. More specifically, people are confused as to why a man of his stature, experience and track record would continue to let Trump walk all over him – when he isn’t making him report through Jared Kushner.

In Tillerson’s case, it is particularly hard to fathom why someone who had served for years as CEO of Exxon would allow himself to be humiliated, toyed with, and disparaged by someone of Trump’s limited experience, competence and leadership abilities. Just this week, Trump used Twitter to call him back from trying to engage North Korea in talks, telling him to stop wasting his time.

Much the same could be said about a number of other senior players in the Trump Administration, including Gary Cohn, Steven Mnuchin, Wilbur Ross and Betsy DeVos. Trump clearly doesn’t value nor feel he needs any of them. And, he probably lets each of them know it more than once weekly.

So, the question is why they hang in. And, specifically, why Tillerson hangs in. Tillerson, in particular, could almost certainly find new and important work outside of government. Exxon, and any oil company, would likely enthusiastically create a new positions for him.

The reason relates to Section 2634 of the Federal Ethics Law, otherwise known at the Certificate of Divestiture. Under this ruling, people assuming high-level positions in the US Government of great wealth are required to divest all or most of their investment assets before assuming office – to protect against conflicts of interests. But, the key here is that they are allowed at the same time under the Ethics Law to forego capital gains taxes on the sale of their assets provided that they reinvest these monies in government securities or approved mutual funds. This is a huge savings for the super wealthy members of Trump’s cabinet – many millions – even billions.

For Tillerson, especially, divesting his enormous holding of Exxon stock and placing these assets tax free in government or other approved securities creates an enormous windfall as he can defer paying taxes on the sale of his stock holdings for a long period (even forever if he does not divest till death) after he leaves Government service.

Tillerson is no fool. While he may have been attracted to the job at first, he undoubtedly was at least equally drawn to Washington by the huge windfall savings he could achieve by unloading Exxon stock as required by law. Now that he has seen what it is really like to work with Trump, it is virtually certain that he will leave immediately after he has served the one-year required under the divestiture rules. I will bet big that he will be out of there on or just after January 20, 2018.