May 3, 2017
Icahn Bet Pays Off, Highlighting His Conflict of Interest
Statement of Tyson Slocum, Director, Public Citizen’s Energy Program
Note: Carl Icahn, special adviser to President Donald Trump, made a rare profit on biofuels credits through his CVR Energy company, according to a news report. Public Citizen in March called on Congress to investigate whether Icahn, Icahn Enterprises and/or CVR Energy are violating the Lobbying Disclosure Act. Icahn has pushed Trump to change the structure of the Renewable Fuel Standard in a way that would be profitable for Icahn and his corporations.
Carl Icahn has used his role as special adviser to the president of the United States on regulatory reform to publicly push for fundamental changes to the Renewable Fuel Standard (RFS) program that was first created by a law signed by George W. Bush.
The RFS mandate requires a company controlled by Icahn, CVR Energy, to purchase credits to comply. In his role as special adviser, Icahn complained about the cost. Icahn’s role gave him an official public platform to push for changes to this mandate and associated program, and Icahn’s public statements and actions resulted in falling prices in the credit market.
Disclosure by Icahn’s CVR Energy that the company’s shorting of that market – while Icahn was whispering into Trump’s ear – caused prices to drop apparently has netted the company $50 million in the first quarter of 2017.
Industry analysts say they have never seen bets like the kind Icahn is making in the biofuels markets.
It’s not hard to see that Icahn is counting on his ability to leverage his position and political influence to persuade the Trump administration to change ethanol rules – while making tens of millions in profits.
Icahn’s political interference with a regulatory market for his personal financial gain raises fundamental conflict of interest concerns. Public Citizen filed a complaint with Congress in March on Icahn’s unregistered lobbying on this matter (to which we have not received a response), but this latest revelation that Icahn is profiting from his role as special adviser must result in President Trump demanding that Icahn resign his special adviser position and instructing the U.S. Department of Justice to investigate the company’s actions.