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Secretary of state drama reaches turning point

The longest running drama of President-elect Donald Trump's transition reaches a vital turning point this weekend, as the final round of deliberations over secretary of state begins.

Going into the weekend, the Trump transition team announced that one of the front-runners for the job, Rudy Giuliani, took himself out of the running on Nov. 29. Sources directly involved in the transition tell CBS News the list of truly serious candidates is now down to two and that one of those names, a late entrant into the State derby, is Exxon Mobil Corp. CEO, president and chairman Rex Tillerson.

A source familiar with transition discussions said of Tillerson's stock in the selection process, "It is rising." The multi-millionaire presides over the world's largest oil company, which operates in more than 50 countries and explores for oil and natural gas on six of world's seven continents. He is well-known to Mr. Trump and has drawn late favor from some factions within the transition. Sources have said it would be unwise to describe Tillerson as the front-runner but none dispute he's in the final three and that presence alone speaks to unique appeal and staying power.

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The other finalist is 2012 GOP nominee and scorching Trump critic Mitt Romney.

The list of potential secretaries of state has at times grown as a result of ego-stroking, misdirection and improvisation. In theory, at least a dozen candidates were under some degree of consideration. Transition sources insist Mr. Trump will announce his pick next week and it will be the final cabinet secretary named.

There is a feverish effort to complete the vetting and selection process for all other cabinet secretary vacancies (energy, interior, veterans and agriculture) so the decks are cleared before the state pick is revealed.

The winnowing of the list of finalists occurred this week, sources said, and there is now a two-tiered list. Three names are being seriously considered but are less viable: former U.N. Ambassador John Bolton, Senate Foreign Relations Committee Chairman Bob Corker of Tennessee and former CIA Director David Petraeus. All three have the stature and respect sufficient to remain in the mix but sources say they did not make the final cut. Of the three, Bolton has the best chance of landing a role in the Trump administration. Transition officials say Bolton has the diplomatic experience and foreign policy knowledge to serve and serve well -- but not as secretary of state.

Petraeus is still in contact with senior transition officials and is on good terms with Mr. Trump. But with three retired generals in the administration already (Michael Flynn as national security adviser, James Mattis as defense secretary and John Kelly as homeland security secretary), the idea of a fourth retired general has drawn increasing opposition within the transition. Petraeus' probation status for having pled guilty to knowingly mishandling classified information is another complication. Corker has provided advice and counsel to Trump but appears to prefer his senate seat and committee chairmanship.

As for the remaining finalists, the transition team is divided on the merits, politics and symbolism of the choice for secretary of state. Mr. Trump has magnified these problems by allowing the process to take on an "Apprentice"-like aura, visibility and mystery. The stock of those being considered has risen and fallen - sometimes to the amazement of transition officials.

That is certainly true of the two finalists.

Read on for more on what sources are saying about the relative strengths and weaknesses of the remaining two candidates...and what those sources had to say about the man who was arguably the most fascinating man among the top contenders.

Rex Tillerson

The 64-year-old Texas native has no experience in government but as the head of the world's most valuable publicly traded energy corporations, Tillerson knows his way around the world and how to make deals. He has the money, Texas swagger (born in Wichita Falls) and board room moxie (in 2008 he beat back an attempt to separate the chairman and CEO titles he held) that Trump admires and respects. Earlier this week on NBC's "Today Show," Trump called Tillerson a "great, great gentleman" who had built a "tremendous company...with great style."

As for Tillerson's deals, one in particular could prove problematic during Senate confirmation hearings: Exxon's deal with Russia to drill in the Arctic Ocean. Tillerson and Russian President Vladimir Putin met in the 1990s when Tillerson was Exxon's man in Russia during Boris Yeltsin's presidency, and Putin was Yeltsin's up-and-coming KGB operative with an eye toward Russian economic revitalization.

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In 2011, Tillerson negotiated Exxon access to drilling rights in the Arctic. As part of the deal, Russia's state-owned oil company, Rosneft, became an investor in Exxon global operations, specifically concessions. At Putin's behest, Tillerson was given the Order of Friendship in 2013. Tillerson spoke in general terms against economic sanctions imposed on Russia by the U.S. and European Union after the incursion and subsequent seizure of Crimea in Ukraine.

Questions about Tillerson's attitude on these sanctions during confirmation hearings would be complex by themselves. But they may grow even more heated in light of Tillerson's 2.5 million shares of Exxon stock (1.8 million of which are not vested and cannot be sold now) and what Tillerson would do to eliminate potential conflicts of interest.

There is also the issue of Exxon and climate change. Tillerson himself is not a skeptic and has called the threat "real" and "serious." But Exxon's role in submerging scientific evidence about the role fossil fuel burning played in climate change - evidence Exxon itself invested in learning about and confirming before a scientific consensus emerged - could prove politically damaging. Exxon has bitterly denied the charges and faulted the Rockefeller Family Fund for divesting from ExxonMobil stock (A 2015 series of articles in InsideClimate News alleged Exxon knew of the link as far back as 1977). The revelation has prompted an online petition #Exxonknew for a federal investigation.

Mitt Romney

Mr. Trump's fascination in Romney continues at least in the sense that no relationship since the election has drawn more interest, publicity or conversation. Trump's appetite for all three is nearly insatiable and so, if nothing else, Romney has proven an irresistible story line.

Romney, like Tillerson, is a multi-millionaire with no obvious experience as a world diplomat. As a former governor of Massachusetts, Romney brings more government experience but nothing that recommends him for secretary of state. Romney is certainly better briefed on world affairs than Tillerson, having run for president twice and become the GOP nominee in 2012. But he's not better versed than Bolton, Petraeus or Corker, and all three are behind Romney in the pecking order.

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Romney has also survived organized and highly public alarms raised by former campaign manager Kellyanne Conway and former House Speaker Newt Gingrich. Both have said they would accept a Trump pick of Romney but both have warned Trump supporters would find it an act of betrayal to reward someone so conspicuously contemptuous of Trump during the campaign.

But Mr. Trump has come around enough on Romney for him to make the final cut, as the president-elect made clear in his "Today" show interview after being named "Person of the Year" by Time. "I'm able to put stuff behind us," Trump said, adding he and Romney have "come a long way."

Romney is close to House Speaker Paul Ryan, whom Mr. Trump met with Friday morning. Ryan is also very close to Vice President-elect Mike Pence and it is thought that nexus may well have been the place where Romney's name was first floated. Conversations between Mr. Trump and Romney aides have been serious and substantive from the start and Mr. Trump's request for a second meeting with Romney - over dinner with incoming chief of staff Reince Preibus - was accepted, sources said, with the understanding it would not be for show and the secretary of state position was still up for discussion.

Romney would present fewer immediately recognizable confirmation issues than Tillerson, which is why he has a following in some transition circles. But Romney's strident criticism of Trump rankles many in Trump's inner circle and those who have voiced no public opposition have made their opposition known inside Trump Tower.

"It's a significant problem," said one source. "How could it not be? How can that be forgotten and then rewarded?"

Rudy Giuliani

No character among the contenders was more fascinating. There is a distinctly operatic quality to Giuliani's pursuit of secretary of state which may not have escaped the famous opera devotee, especially now that the transition revealed he took himself out of the running on Nov. 29.

Giuliani has known Mr. Trump for years. Their relationship was close enough to result in this video spoof during a 2000 media roast of Giuliani. The mayor, dressed in drag, applied perfume while Trump sniffed the manufactured cleavage, eliciting a face slap.

No other contender for secretary of state had, as far as anyone knows, slapped Trump across the face -- or been invited by Trump to his first foray in foreign policy as GOP nominee -- the surprise Aug. 31 trip to Mexico City to meet with President Enrique Pena Nieto.

Even before Mr. Trump ran for president, he regarded Giuliani as a leader who saved New York City from crime and economic drift - not to mention the only mayor of recent vintage with the mettle to cope with 9/11 terrorist attacks.

Among all the people the president-elect and the transition has considered for the State Department, no one had closer ties or was held in higher esteem longer than Giuliani. As the New York Times observed immediately after Mr. Trump won the election, he and Giuliani have a history on issues of race, crime, urban renewal, business development and terrorism that makes them natural rather than coincidental or purely opportunistic allies. All this made Giuliani the early favorite and the captivating lead character as the opera opened.

But Giuliani's fortunes suffered, as sometimes happens on the stage, when ambition and ego become distractions. As I have reported before, Giuliani, according to multiple sources, turned Trump down when offered attorney general and homeland security secretary. Giuliani made it clear his goal was secretary of state. That complicated matters for Trump, leading to speculation -- not all of it idle -- within the transition that Mr. Trump's flirtation with Romney was a power move to erase Giuliani from the spotlight and remind him of the new presidential power dynamic.

Giuliani endorsed Mr. Trump shortly before the New York primary and became his most enthusiastic supporter, frequently the warm-up act that drew the longest, most enthusiastic applause. "America's Mayor" offered unfiltered praise of Trump and unrelenting criticism of Hillary Clinton, sounding much more like a born-again conservative firebrand and not much at all like the moderate Republican who ran New York and campaigned unsuccessfully for the GOP nomination in 2008. It even prompted some to wonder if Giuliani had lost his sense of perspective. In typically understated fashion, Politico asked if Giuliani had "lost his mind."

Giuliani's business ties and lucrative post-mayoral career of speech-making and foreign dealing might have presented confirmation problems, too. His consulting firm did work on behalf of an Iranian group long favored by conservatives that was once on the State Department list of terrorist organizations (a designation lifted in 2012). It also has relationships with firms that did business with Qatar, Russia and Ukraine.

Giuliani was a regular presence inside Trump Tower in the weeks immediately following the election but was noticeably less visible the last two weeks.

After news broke Friday that he had taken himself out of contention, Giuliani was already discouraging Mr. Trump from choosing one of the two top candidates left. In light of the intense criticism Romney leveled at Mr. Trump during the campaign, "My advice would be Mitt went just a little bit too far," he told Fox News' Neil Cavuto Friday afternoon.

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