Hours after billionaire investor Carl Icahn said he would no longer be advising President Trump, The New Yorker dropped a lengthy investigation on his efforts to direct policy to benefit a company he is invested in.
The short version of the story, by Patrick Radden Keefe, is that Icahn could be in “legal jeopardy.”
“He’s walking right into possible criminal charges,” Richard Painter, a Bush administration ethics lawyer, told Keefe.
If you have time, go read the full story, which is excellent. If you’re short on time, here are the key takeaways:
- Icahn has a 82% stake in CVR, a refiner.
- Refiners have to blend ethanol into their products, or buy credits, called Renewable Identification Numbers (RIN), from refiners that do. The cost of these RINs has increased, costing CVR more and more money.
- Icahn has lobbied vocally against the policy that forces refiners like CVR to buy RINs, arguing in favour of changing the “point of obligation,” which would force other parties to buy them instead. He even likened RINs to the mortgage-backed securities that fuelled the financial crisis.
- According to The New Yorker, Icahn told Bob Dinneen, the head of the Renewable Fuels Association, which had been supporting the existing RIN policy, that an executive order would change the rules.
- “Icahn was always talking about an ‘executive order’ — that was his vernacular,” Dinneen told The New Yorker. According to Icahn’s lawyer, Icahn only expressed “hope” that Trump would agree with his view on RINs
- Either way, Dinneen said he would propose to his board that the Renewable Fuels Association would end its opposition to the “point of obligation” change. When news leaked of the potential change in the association’s stance, there was an outcry from the ethanol industry.
- spokeswoman for the White House later denied that there was any plan to shift the point of obligation.
- Keefe reported that an official in the Trump administration told him that there was a draft executive order, but that it was “something Icahn sent to us.” Icahn’s lawyer also denied that Icahn had prepared the executive order.
- According to Painter, Icahn is “walking right into possible criminal charges,” because of “a federal statute that makes it illegal for executive-branch employees to work on any matter in which they may have a direct financial interest.” As a reminder, Icahn had the title “special adviser to the president.”
- Icahn’s lawyer told Keefe the relevant law does not apply to Icahn: “Unlike a government employee, Mr. Icahn has no official role or duties and he is not in a position to set policy.”