U.S. Subpoenas Icahn Over Biofuel Policy (Renewable Fuel Standard) While Trump Adviser
November 8, 2017; Date:
Billionaire Carl Icahn is under investigation for double-dealing, a.k.a. personal enrichment, regarding biofuels policy changes he pushed for while an advisor to the Trump Administration. Namely, in December 2016 Icahn joined the Trump Transition team to help shape Trump's regulatory agenda. During the time he was in that role, Icahn pushed for changes in the renewable fuel standard that would have benefited CVR Energy, an independent oil refiner in which Icahn owns a majority share.
Specifically, Icahn wanted the Environmental Protection Agency (EPA) to change the way it administers the Renewable Fuel Standard program. This program requires refiners to use Biofuels (like Ethanol) in the belief that it improves emissions. Icahn wanted the EPA to eliminate a requirement for refiners to use Biofuels, and instead push the requirement to fuel blending operations.
Remember that Icahn owns a majority stake in CVR Energy. Icahn directed CVR Energy to delay purchasing Renewable Identification Numbers, the credits used to show compliance with the Renewable Fuel Standard. He was betting that if his proposed change were accepted, the value of RIN's would fall. Indeed, in Q1 2017, CVR Energy saved $60 million in RIN purchase costs. CVR's refineries rely mostly on buying RIN's rather than Biofuels.
In other words - Ican's policy change proposal caused RIN prices to fall giving a $60 million benefit to a company where he's the majority shareholder.
The US Attorney for the Southern District of New York has issued subpoenas on
- Carl Icahn’s efforts to change biofuel policy while serving as an adviser to President Donald Trump
- CVR Energy for information on its activities, as well as those of CVR Refining, and Icahn
Last March, Public Citizen filed a complaint with Congress saying that Icahn and CVR Energy were in violation of the Lobbying Disclosure Act.
“Icahn’s dual role as an owner of an oil refining business and Trump’s special adviser on regulations not only presents a significant conflict of interest, but Icahn’s failure to register himself and his affected businesses as lobbyists makes a mockery of our nation’s good governance laws,” said Tyson Slocum, director of Public Citizen’s Energy Program. “He vetted the eventual EPA nominee, advised the president-elect on regulatory policy and is pushing the president to change policy so that his company can save hundreds of millions of dollars.”
The Public Citizen complaint concludes, “All of this has occurred with no record of any LDA filings by or on behalf of Mr. Icahn, Icahn Enterprises or CVR Energy. It is unlikely that all these activities occurred without some individual or entity being obligated to report lobbying activity under the LDA.”
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