GOP Crony Capitalism Part II – Carl Icahn
Carl Icahn is an informal adviser to Donald Trump, having been appointed the so-called “regulatory czar” in order, in Trump’s words, to help “American entrepreneurs shed job-killing regulations that stifle economic growth”. Of course, since Icahn is an informal adviser, he does not have to disclose or divest his current financial interests. That, of course, opens up the opportunity for Icahn to propose cutting regulations that would benefit his own businesses.
And, not surprisingly, the Intercept is reporting that Icahn is already doing just that. The issue revolves around another huge government boondoggle, the requirement that all US gasoline contain some renewable source, usually corn ethanol. If a company does not comply with that renewable standard, it must buy a renewable fuel credit to fulfill that renewable source obligation.
The responsibility for fulfilling the renewable requirement falls on the gasoline refiners, not the gasoline wholesalers or blenders. According to the Intercept, “Icahn is the majority owner of CVR Energy, a refiner which does not have the infrastructure to blend ethanol. As a result, CVR must buy renewable fuel credits to comply with their obligation. In its most recent SEC filing, CVR stated it spent $205.9 million last year on renewable fuel credits. Shifting the point of obligation to blenders would relieve CVR of that expense.”
Lo and behold, rumors of a Trump executive order that would shift the burden to the gasoline wholesalers surfaced earlier this week. The very next day, the Trump administration then denied that such an order was in the works. But according to Renewable Fuels Association President and CEO Bob Dinneen, “We received a call from an official with the Trump administration, informing us that a pending executive order would change the point of obligation from refiners to position holders at the terminal, a potentially small increase in the number of obligated parties, but one which would distribute the obligation more equitably. Despite our continued opposition to the move, we were told the executive order was not negotiable”. The open question is who was the official that called Dinneen.
So far, no executive order has been forthcoming but it will be worth keeping an eye on this as well as who will benefit from all the regulations the Trump administration rolls back. And Icahn won’t be the first one of Trump’s advisers, nor Trump himself, who we will find benefit monetarily from the actions of the Trump administration.