Carl Icahn’s Failed Raid on Washington

http://www.newyorker.com/magazine/2017/08/28/carl-icahns-failed-raid-on-washington

by GabrielF00 • 9 years ago

135 44 9 years ago

rayiner• 9 years ago

Corn lobby beats oil lobby this round. Yawn.

Animats• 9 years ago

Meanwhile, Icahn makes money on the deal, by anticipating market reaction to his lobbying. Even though it doesn't succeed, the market drops, his short selling profits, and he's up about $200M.

klipt• 9 years ago

Does that not violate insider trading laws?

valuearb8• 9 years ago

If he still is shorting the credits he's at risk of being forced to cover at a massive cost. He could get short squeezed really hard, and which is why other wall street players are shorting his refineries stock.

pavlov• 9 years ago

That's not the story. It's that someone appointed as "special advisor to the President on issues relating to regulatory reform" didn't actually have any interest in reforming regulations except for one very specific niche issue that has been affecting the profits at his refinery.

He tried to pull a fast one and even wrote an executive order, hoping Trump would sign it. Even though it didn't work out, the refinery made handsome profits by short-selling a regulatory instrument, apparently by exploiting information from Icahn.

It's an interesting background piece around Trump's regulatory teardown, one of the few issues where he can claim to have accomplished anything close to his campaign promises.

csours• 9 years ago

Because most attendants were women, Icahn insisted, they were not “breadwinners,” and should not expect compensation commensurate with that of male employees. At one point in the negotiations, he reportedly suggested that if the flight attendants were having such trouble making ends meet they “should have married a rich husband.” (Icahn denied having made sexist comments.) C. E. Meyer, the company’s chief executive, described Icahn as “one of the greediest men on earth.” T.W.A. eventually went out of business.

What a nice fellow.

timefractions• 9 years ago

Isn't he one of Lyft's biggest investors?

AVTizzle• 9 years ago

Seems like this piece made an impact before going live:

"Trump advisor Carl Icahn resigned ahead of negative magazine article"

http://www.latimes.com/nation/nationnow/la-na-icahn-resignat...

__derek__• 9 years ago

And the departure caused the article to be published early[1]:

I've been reporting on Carl Icahn's role as an adviser to Trump. Monday, in an email to me, the White House fired him. Today, he resigned.

[1] https://twitter.com/praddenkeefe/status/898674961161662464

kelukelugames• 9 years ago

Icahn’s role was novel. He would be an adviser with a formal title, but he would not receive a salary, and he would not be required to divest himself of any of his holdings, or to make any disclosures about potential conflicts of interest. “Carl Icahn will be advising the President in his individual capacity,” Trump’s transition team asserted. In the months after the election, the stock price of CVR, Icahn’s refiner, nearly doubled—a surge that is difficult to explain without acknowledging the appointment of the company’s lead shareholder to a White House position. The rally meant a personal benefit for Icahn, at least on paper, of half a billion dollars. There was an expectation in the market—an expectation created, in part, by Icahn’s own remarks—that, with Trump in the White House and Icahn playing consigliere, the rules were about to change, and not just at the E.P.A. Icahn’s empire ranges across many economic sectors, from energy to pharmaceuticals to auto supplies to mining, and all of them are governed by the types of regulations about which he would now potentially be advising Trump.

How is this shit legal?

jacquesm3• 9 years ago

How is this shit legal?

In a banana republic? Or in a country that takes these things serious? It all depends on where you live. The absolutely incredible conflicts of interest the Trump administration has brought into the whitehouse ought to have been enough to put several people behind bars. The brands of family members are openly advertised by whitehouse advisors on national TV and the president did not divest himself from his holdings but created some kind of smoke-and-mirrors version of divestment.

It's ridiculous, and it sets the tone for the rest of the nation. If you feel that it isn't legal you are probably right but it would require someone in a position in power to do something about it and that is not going to happen for the time being.

The real problem this causes: precedent has been set and future administrations will not feel bound by these rules any more.

maxerickson• 9 years ago

It isn't all that unlikely that new laws will be passed (for example, there were substantial reforms after Watergate/Nixon).

A big part of the problem is that a lot of the ethics rules surrounding the president are just norms, they aren't laws.

If we are real lucky the imperial office of the president will be neutered quite a lot.

valuearb8• 9 years ago

How did Al Gore's pals get a billion federal dollars to fund their dumb Solyndra idea? This kind of stuff is as old as the federal government itself.

PhantomGremlin• 9 years ago

You're being voted down. That's because oh so many here weren't around when the Chicoms were funneling cash to the Democratic Party for the 1996 election.[1]

Al Gore explained himself thusly: "The vice president also observed that he drank a lot of iced tea during meetings, which could have necessitated a restroom break," the FBI summary stated. "It was not uncommon for him, and for that matter the president, to excuse themselves from meetings to use the restroom."[2]

And, boys and girls, unlike the current special prosecutor to investigate Russia's influence in the most recent election, the Democrats brazenly stonewalled and the media let them get away with it.

This kind of stuff is as old as the federal government itself.

Yup. Anyone who doesn't realize this either had a crappy US History teacher or daydreamed instead of paying attention.

[1] https://en.wikipedia.org/wiki/1996_United_States_campaign_fi... [2] http://community.seattletimes.nwsource.com/archive/?date=200...

nl• 9 years ago

Didn't Solyndra get burnt by dropping conventional silicon panel prices?

valuearb8• 9 years ago

I wasn't defending the practice, just saying it's a flaw in our governmental structure that it's so easy.

curun1r• 9 years ago

How is this shit legal?

From the article...

One recurring feature of the Trump Presidency has been an acute collective sensation, shared by a substantial portion of the electorate, of helpless witness. Dismayed Americans wait, like spectators at a game that has turned suddenly dangerous, for a referee to step in and cry foul...What this means in practice is a serious deficit of accountability. Whom can you call when the authorities are the ones breaking the rules?

This, for me, is the troubling part of the Trump administration. It's not whether the crap he's pulling is legal or not. It's whether there is anyone with the power to do so who will hold him and his fellow law-breakers to account. And when he can just fire the people that are investigating him, you seriously have to question whether our system really does have the legendary checks and balances we're taught in school or whether we've just never before elected the wrong cohort of leaders who were willing to abdicate the responsibilities of their offices.

And with Trump's FEC appointees blocking efforts to plug the holes that Russia may have used to influence the outcome of the last election, we may not even have the opportunity to exercise the ultimate check on corruption during the upcoming elections.

Brybry• 9 years ago

Historically the system of checks and balances, when it works, takes years to accomplish its goal.

For example, it took almost two years after Watergate for the impeachment process to even start and over two years before it started to reach its conclusion. And then of course Nixon resigned before it went to trial.

If the whole process had been completed it would probably have been at least 3 years from crime to conviction. Though any sitting President would be foolish to let it go that far: much easier to resign and have your Vice President blanket pardon you.

cmurf2• 9 years ago

Nation of spectators, not citizens. And I find in tech, they prefer not to even watch. It seems people think ethics and law are on autopilot. And they think aristocrats are from a bygone age rather than alive and well and want more classism and money, not less of either.

Of course, it's not quite so simple. Richard Painter, former ethics lawyer to Bush 2 has said about this specific instance that DoJ should investigate on the basis that this was clearly an official role and title.

I would add, that this administration insists everyone watching is a moron, and will thus just let them get away with it. They might be right, we'll just have to see how it plays out in a future episode of President Celebrity Chaos Clown.

In any case, a huge amount of the way things works in government is based on norms including etiquette and ethics, not laws or regulations. When you get people who don't care about norms, things start to fall apart quickly because there's no law or regulation to fall back on.

mandeepj• 9 years ago

There are a lot of stocks which have appreciated at least 50% during last 12 months like apple, netflix, amazon etc. Market has gone through a crazy bull ride.

paganel• 9 years ago

Icahn playing consigliere,

I like this tidbit that implicitly assumes that guys like Icahn are like Mafia people. I'm still waiting for magazines like The New Yorker to compare the financial executives from Wall Street with Michael Corleone, I'm pretty sure that that will happen once one of them decides to switch camps and pass on to openly supporting Donald Trump.

And before anyone accuses me of being a right-wing paranoid nut, I'm not an American, I've never set foot in the States, have very little skin in this game, I'm just writing down what I consider as being mass-media manipulation (one of my first jobs while I was in my early 20s was to read papers, did that for 3 years, after you're doing that it's pretty easy to see all these journalistic "schemes").

zeitg3ist• 9 years ago

As an Italian, “consigliere” to me just means “counselor”, so I completely missed that reference. Thanks for pointing it out.

valuearb8• 9 years ago

Great article, I love Carl Icahn stories. He's an unrepentant SOB, and massively OCD. He's a smart guy who is right a lot, usually thinks clearly about the long term, and that makes this story so compelling he's put his own nuts in a vise over such a trivial benefit, while relying on an idiot "friend". I mean Icahn should not be this dumb, ever.

Great quotes in the article as well.

"But, in reality, many New York financiers considered him a buffoon. In 2015, Lloyd Blankfein, the C.E.O. of Goldman Sachs, greeted the suggestion that Trump might run for President by remarking that the notion of the former star of “The Apprentice” having his “finger on the button blows my mind.”

"In 2010, Trump again found himself in trouble in Atlantic City. But this time Icahn was his antagonist. Along with a Texas banker, Icahn was trying to gain control of three Trump casinos. When a lawyer asked, during a deposition, whether Icahn intended to rebrand the casinos, he said that a consultant had deemed the Trump name a “disadvantage.” In an interview, Trump shot back, “Everybody wants the brand, including Carl. It’s the hottest brand in the country.” But in Icahn’s opinion the only real downside to shedding the Trump name was the expense that would be associated with changing all the signage"

"In court papers, Icahn’s lawyers suggested that Trump’s name was no longer “synonymous with business acumen, high quality, and style.” Icahn told the Wall Street Journal, “I like Donald personally, but frankly I’m a little curious about the big deal about the name.” If the Trump brand carried such cachet, he asked, why did Trump properties keep going bankrupt?"

metaobject• 9 years ago

I'm not sure I'd call ~$500 million a trivial benefit.

valuearb8• 9 years ago

It's a $200m a year benefit based on what the refinery paid last year for the credits . The article used a jump in the stock price to say Icahn made $500M, but that's not really true because

1) Stock prices go up for many reasons 2) Icahn didn't sell to monetize in that gain and hasn't sold yet. And likely wasn't going to sell even if RIN reform passed. 3) Now that he's resigned and the odds of passing any RIN reform is virtually zero, the refinery's stock has zero RIN value in it.

I say it's trivial because $200m a year on a $17B portfolio is barely 0.1% a year. His deal-making efforts are worth many times that, at least 10% a year. So why get tied up in a mud fight with a pig over a scrap of a morsel?

Carl Icahn’s Failed Raid on Washington

Related Stories