Billionaire Carl Ichan departs from Trump administration

Billionaire investor Carl Icahn stepped down from an unpaid post as President Donald Trump’s adviser on deregulation efforts just days before The New Yorker was preparing to publish a lengthy article detailing potential conflicts of interest.

Icahn said in a letter to Trump released Friday that he would resign to prevent ‘partisan bickering’ about his role that Democrats suggested could benefit him financially. 

The resignation came just three days before The New Yorker was scheduled to post its story online and begin selling printed magazines on newsstands.

Carl Icahn drops out as informal adviser on deregulation council after potential conflicts of interest issues arise

Carl Ichan 

Age: 81

Net worth: $15.9 billion 

Nationality: American

Education: Princeton University

Profession: Investor 

In the story, the magazine points out potential conflicts and even possible criminal law violations involving obscure rules that require oil refineries to blend ethanol into gasoline. 

In his letter, Icahn wrote that he ‘never had access to nonpublic information or profited from my position, nor do I believe that my role presented conflicts of interest.’

But The New Yorker wrote that in 2012, Icahn, who made his name and fortune as a corporate raider, bought an 82 per cent stake in CVR Energy, a Sugar Land, Texas, refinery. 

To comply with regulations designed to promote use of ethanol, refiners must blend the renewable fuel with their gasoline or buy credits from other refiners that are called ‘Renewable Identification Numbers.’

Carl Icahn and Donald Trump attend Make A Wish Foundation Benefit on March 13, 1990 at the New York Hilton Hotel

Carl Icahn and Donald Trump attend Make A Wish Foundation Benefit on March 13, 1990 at the New York Hilton Hotel

Carl Icahn, billionaire investor and chairman of Icahn Enterprises Holdings LP, center, walks outside of the Nasdaq

Carl Icahn, billionaire investor and chairman of Icahn Enterprises Holdings LP, center, walks outside of the Nasdaq

When Icahn bought his stake in CVR in 2012, the credits were cheap, about 5 cents each, so rather than equip refineries to add ethanol to its gas, the company just purchased credits. 

But by 2016 CVR was spending $200 million per year to buy them, and its stock value had dropped 70 per cent from the prior year, the story said.

Icahn unsuccessfully tried to get the Obama administration’s Environmental Protection Agency to change the point at which the ethanol blending was required, making it closer to the gas pump so refiners weren’t responsible and CVR wouldn’t have to buy the credits, the magazine wrote.

Several weeks after Trump’s November victory, Icahn agreed to become special adviser to the president on regulatory reform, and CVR’s stock nearly doubled in value on the expectation that the renewable fuels rule would be changed, the magazine wrote.

On Dec. 22, the day after Icahn was formally declared a White House adviser, the price of the credits dropped.

Then, on Feb. 27, news leaked that Icahn had struck a deal with the Renewable Fuels Association to change the ethanol blending requirement. That sent the price of credits down more, and it fell further when word leaked that an executive order on ethanol blending was imminent.

Icahn gives an interview on FOX Business Network's Neil Cavuto show in New York- February 11, 2014

Icahn gives an interview on FOX Business Network’s Neil Cavuto show in New York- February 11, 2014

Previously the Renewable Fuels Association had opposed any changes, the magazine said. 

The association’s head later said he was told by Icahn that the blending point would be changed whether the association objected or not, so he agreed to take a deal to his board.

Early in the year, CVR actually was selling renewable fuel credits, the magazine wrote. It was able to buy them later at a discount to meet federal requirements, according to the story.

A day after news of the deal with the Renewable Fuels Association, the White House denied there was any plan to change the renewable fuel requirements, and no such change was made, according to the magazine.

Icahn’s attorney, Jesse Lynn, rejected allegations that Icahn exploited his relationship with Trump to make bets on the renewable fuel credits. He said the CVR board, which Icahn chairs, made decisions on when buy or sell credits. 

‘Any suggestion that we had access to information that others didn’t is unequivocally false,’ he told the magazine.

Richard Painter, a former chief White House ethics lawyer to President George W. Bush, told the magazine that a federal law makes it illegal for executive-branch employees to work on matters in which they have a financial interest.

Lynn said the law doesn’t apply to Icahn because he had no official role or duty. But Painter said Icahn’s title was clearly an official one. He suggested the Justice Department should be investigating.

Painter, reached Saturday by The Associated Press, said Icahn faces potential legal exposure to insider trading laws as well as other fraud statutes “if he took information from the White House or government in violation of any relationship or trust.”

Despite being unpaid, his job title as adviser to the president exposes him to possible legal action, Painter said. “When you have a title like that, that’s ‘to the president,’ it’s very hard to argue that you’re not a government employee,” Painter said.

A spokeswoman for CVR Energy would not comment when reached Saturday by The AP.

Carl Ichan’s Letter to the President  

Dear Mr. President:

This will confirm our conversation today in which we agreed that I would cease to act as special advisor to the President on issues relating to regulatory reform.

As I discussed with you, I’ve received a number of inquiries over the last month regarding the recent appointment of Neomi Rao as Administrator of the Office of Information and Regulatory Affairs (or “regulatory czar,” as the press has dubbed her) – specifically questions about whether there was any overlap between her formal position and my unofficial role. As I know you are aware, the answer to that question is an unequivocal no, for the simple reason that I had no duties whatsoever.

I never had a formal position with your administration nor a policymaking role. And contrary to the insinuations of a handful of your Democratic critics, I never had access to nonpublic information or profited from my position, nor do I believe that my role presented conflicts of interest. Indeed, out of an abundance of caution, the only issues I ever discussed with you were broad matters of policy affecting the refining industry. I never sought any special benefit for any company with which I have been involved, and have only expressed views that I believed would benefit the refining industry as a whole.

Nevertheless, I chose to end this arrangement (with your blessing) because I did not want partisan bickering about my role to in any way cloud your administration or Ms. Rao’s important work. While I do not know Ms. Rao and played no part in her appointment, I am confident based on what I’ve read of her accomplishments that she is the right person for this important job.

I sincerely regret that because of your extremely busy schedule, as well as my own, I have not had the opportunity to spend nearly as much time as I’d hoped on regulatory issues. I truly appreciate the confidence you have in me and sincerely hope that the limited insights I shared have been helpful to you. I love our country which has allowed me to achieve so much and I thank you for the informal opportunity you have given me to aid it.

 

 

 

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