Feb. 28, 2017
Top Trump Adviser to Reap Possible $200 Million Annual Benefit From President’s Executive Order on Renewable Fuel Standard
Immediate Investigation of Carl Icahn’s Influence and Role During Presidential Transition Is Needed
Note: Politico reports that President Donald Trump may soon issue an executive order (EO) making significant changes to the credit structure of the Renewable Fuel Standard (RFS). The RFS stems from a former President George W. Bush-era law, enforced by the U.S. Environmental Protection Agency (EPA), requiring oil refiners to blend certain volumes of ethanol into gasoline. Current EPA regulation of the RFS requires refiners that lack the infrastructure to properly blend the ethanol to purchase credits from those who already possess blending infrastructure. Carl Icahn owns a majority stake in CVR Energy, an oil refiner that the Wall Street Journal reported in December spends $200 million a year buying credits to comply with the RFS. Also today, Bloomberg News reports that Icahn already has negotiated a deal on RFS changes with other corporate leaders and waits only for the Trump administration to issue its EO, which likely would save him hundreds of millions of dollars before its ink is dry.
Trump’s rumored executive order would shift responsibility, known industrywide as the point of obligation, from larger well-financed corporate refiners and importers to the smaller retail blending rack sellers. This change is exactly what Mr. Icahn has been lobbying for, and would no longer require his refining company to purchase $200 million worth of RFS credits per year.
Icahn not only advised Trump’s presidential campaign, but he served as a top transition team official, vetting the eventual EPA nominee and advising the president-elect on regulatory policy. Additionally, Icahn currently serves as Trump’s special adviser on regulation.
Regardless of the merits of shifting the RFS point of obligation, the issuance of an executive order that could directly benefit a close adviser to the president creates significant financial and ethical conflict of interest concerns. The U.S. Department of Justice must launch an immediate investigation into the role Mr. Icahn played during the transition and currently plays as a formal adviser to the president.