Democratic senators send letter on conflict of interest to Trump advisor Icahn '57| Mar 30, 2017
On March 27, several Democratic senators sent a letter to investor and business magnate Carl Icahn ’57, requesting he clarify his role as special advisor to President Donald Trump and respond to questions about conflicts of interest. This expression of concern over Icahn’s role in the administration follows an ongoing effort to establish a conflict of interest that is created by this informal advisory position.
Icahn is the majority shareholder of Icahn Enterprises, a conglomerate valued at over $6 billion that owns companies in the automotive, energy, and mining sectors. In particular, Icahn has 82 percent ownership stake in CVR Energy, an oil refiner valued at $1.6 billion. CVR has called for changes to the federal Renewable Fuel Program, which was expanded in 2007, to take the burden of blending biofuels into gasoline off of refiners and to instead place it on marketers. The regulatory change would have saved CVR $205.9 million last year.
Earlier this month, six senators wrote a letter to White House Counsel Donald F. McGahn II, expressing concern about Icahn’s role as special advisor on regulations to the President.
“We are concerned that his substantial and widespread private-sector investments present perverse incentives for Mr. Icahn in his role as a special advisor to the President,” the senators wrote in the letter. Quoting an ethics watchdog, the senators noted that Icahn’s involvement with the Trump administration is “the purest definition of a conflict of interest that you can get.”
Icahn has dismissed the idea of a conflict of interest, stating that his role as advisor and views on regulations are to serve the entire industry, not only his companies.
After Icahn met with Trump in February about changing the Renewable Fuel Standard, an EPA regulation that requires oil refiners to blend their oil with renewable fuels, CVR shares rose 6 percent. Icahn has called the regulation “natural stupidity.”
In a letter directly to Icahn, senators wrote that he should be classified as a “special government employee,” or SGE, which would subject him to a number of rules, including prohibiting him from participating in matters in which he has a financial interest without written authorization. An SGE can be a personal friend or unpaid advisor who “departs from his usual role as an informal advisor” and “assumes considerable responsibility for coordinating the Administration’s activities in particular ways,” the letter stated.
Icahn has not yet responded to request for comment.
The March 27 letter was signed by Senators Sheldon Whitehouse (D-RI), Elizabeth Warren (D-MA), Patrick Leahy (D-VT), Sherrod Brown (D-OH), Jeff Merkley (D-OR), Tammy Baldwin (D-WI), and Tammy Duckworth (D-IL).
“You cannot have it both ways,” they wrote, “if your involvement with the Administration is not significant enough to require you to play by the conflict of interest rules required of other advisors to the President, it cannot also be significant enough to require you to advise your company’s shareholders of the materiality of your White House position.”
On Monday, Icahn was brought into an insider trading trial involving sports gambler William Walters, who is charged with using nonpublic information while trading shares of a dairy processing company, Dean Foods. Prosecutors believe Walters was involved with another case of insider trading in shares of Clorox, alleging that Icahn shared information with Walters in 2011. However, an insider trading violation would only have occurred if Icahn breached a fiduciary duty while giving the tip, which remains unknown.