Investor Carl Icahn steps down as adviser
to President Trump
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[August 19, 2017]
By Trevor Hunnicutt and Svea Herbst-Bayliss
(Reuters) - Billionaire investor Carl Icahn
ended his role as a special adviser to U.S. President Donald Trump on
Friday after facing criticism that policy recommendations he offered
could help his own investments.
Some Democratic lawmakers and biofuels advocates argued that Icahn's
guidance to the Republican administration created a conflict of interest
with his businesses, including oil refining company CVR Energy Inc.
Icahn has denied any conflict of interest.
Icahn's departure followed a flurry of changes at the White House. Trump
on Friday fired his chief strategist, Stephen Bannon, two days after
disbanding two high-profile business advisory groups.
"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," Icahn wrote in a letter to Trump released on his
The White House declined to comment. A call to Icahn's office was not
The activist investor, who leads Icahn Enterprises LP, was an early and
close ally of Trump who was often praised by the Republican for his
business acumen. One of Icahn's first tasks was to vet the future
Securities and Exchange Commission chairman and a number of candidates
met with the octogenarian investor in his Fifth Avenue office just a few
blocks north of Trump Tower in Manhattan.
While Icahn stopped managing money for clients years ago, he still has
large stakes in companies like Herbalife Ltd , CVR and American
International Group Inc , which have faced regulatory issues.
Icahn was so sure Trump's election last year would give a boost to
stocks that he left the campaign's victory party to make a $1 billion
bet on the market, he told Reuters last year. The day after the
election, stocks leapt.
In his letter to Trump, Icahn downplayed his role as an adviser on
regulatory matters, saying "I never had access to nonpublic information
or profited from my position."
Trump, who came to office promising to roll back regulation, reform the
tax code and boost infrastructure spending, never put Icahn on the
But Icahn's involvement was considerable. He interviewed Scott Pruitt,
now the administrator of the Environmental Protection Agency, the very
agency that would determine regulations about requiring refiners to
blend biofuels. His web of financial interests became a lightning rod.
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Billionaire activist-investor Carl Icahn gives an interview on FOX
Business Network's Neil Cavuto show in New York, U.S. on February
11, 2014. REUTERS/Brendan McDermid/File Photo
"If he was not willing to admit he was a de facto special government
employee, and follow the rules, then he had no place serving in
government," said Norman Eisen, co-founder of Citizens for
Responsibility and Ethics in Washington, who served as the chief
ethics lawyer for former President Barack Obama.
"His short tenure, marred by serious conflicts allegations, was yet
another black eye for an administration that has become notorious
for violations of ethics and the rule of law."
Icahn has been one of the loudest critics of the federal biofuels
program, and he was working at price-crushing reforms of the program
at the same time he was betting that credits at the center of the
program would fall.
Biofuels regulations require refiners either to blend biofuels into
gasoline or - in the case of companies like CVR that have no
blending facilities - to buy credits from competitors. The
regulation, the Renewable Fuel Standard, also allows companies to
delay those credit purchases by a year.
As an adviser to Trump, Icahn urged the president in February to
alter the policy to lift the blending burden from refiners. Yet
environmental regulators are preparing to formally reject that
proposal, sources told Reuters. Investors have built up a large
short position in CVR in the past three months, according to Reuters
data, as evidence mounts that the company's gamble on the biofuels
market is going sour.
(Reporting by Trevor Hunnicutt in New York and Svea Herbst-Bayliss
in Boston; Additional reporting by Jarrett Renshaw in Philadelphia,
Chris Prentice in New York and Valerie Volcovici in Washington;
Editing by Tom Brown and Lisa Shumaker)
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