Who has Trump's ear?_00010806.jpg
Who has Trump's ear?
03:24 - Source: CNN

Editor’s Note: Former Ambassador Norman L. Eisen, a CNN contributor, is a fellow at The Brookings Institution and served as President Obama’s “Ethics Czar” from 2009–11. Fred Wertheimer is the Founder and President of Democracy 21, a nonprofit, nonpartisan organization that seeks to promote government accountability and integrity. The opinions expressed in this commentary are theirs.

Story highlights

Norman Eisen and Fred Wertheimer: Carl Icahn, named an adviser to President Trump, is pushing for a rule change that would save one of his companies hundreds of millions of dollars

President Trump should be honest with the public about how his multibillionaire friend is influencing regulation policies, they say

CNN  — 

Carl Icahn, a close friend of President Trump, is a multibillionaire businessman and investor who was named during the transition to serve as “a special advisor to the President on issues relating to regulatory reform.” He is strongly opposed to government regulations, and in particular, to one that affects his huge business interests – including a rule that costs one of the companies he controls hundreds of millions of dollars.

The transition press release stated that Icahn “will be advising the President in his individual capacity and will not be serving as a federal employee or a Special Government Employee and will not have any specific duties.”

Norman Eisen
Fred Wertheimer

But Icahn’s actual behavior in his role as special adviser suggests he may very well be a Special Government Employee, or “SGE.” If so, he should follow conflicts and disclosure laws governing the behavior of such employees.

“SGE” is a term the government uses to refer to part-time federal employees. An SGE is anyone who is “retained, designated, appointed, or employed to perform, with or without compensation,” temporary duties for a limited number of days per year “on a full-time or intermittent basis.” According to the Office of Government Ethics, the “SGE category was created by Congress as a way to apply an important, but limited, set of conflict of interest requirements to a group of individuals who provide important, but limited, services to the Government.”

There is substantial evidence that Icahn has been “designated” or “appointed … to perform … duties” for President Trump. Before Icahn was named a special adviser to the President, he met with Scott Pruitt, then the Oklahoma Attorney General, twice, and had additional phone calls that related to whether Trump would nominate Pruitt to head the Environmental Protection Agency (EPA), according to Bloomberg.

Icahn also met with two other candidates for the job and, Bloomberg also reported, pressed all three candidates “for their views on a regulation that he says is costing his oil refineries hundreds of millions of dollars a year.” Initially disappointed that Pruitt seemed to have little knowledge of the regulation, Icahn said to Bloomberg that “he was satisfied after another meeting and additional phone calls.”

Pruitt got the EPA job.

Icahn has since used his role as special adviser to continue to push to change this EPA regulation. Icahn owns 82% of CVR Energy, an oil refining company that is required to purchase “biofuel credits” from other companies if it does not mix fuels, such as ethanol, into its gasoline and diesel products. (The credits are purchased from companies that do perform such fuel mixing.)

According to Bloomberg BusinessWeek, in February 2017, Icahn gave President Trump a proposal he negotiated with the head of the Renewable Fuels Association to eliminate the obligation on his company and similar oil refining companies to pay for “biofuel credits.” This proposal would save Icahn hundreds of millions of dollars and is reportedly under consideration in the White House. Meanwhile, since the election of President Trump, Icahn’s holdings in CVR Energy have increased in value by more than $500 million.

Icahn has said about the existing EPA regulation that it is “the quintessential example of the type of insane regulations throttling our economy that Donald Trump said all throughout his campaign he wanted to see changed.” Icahn also said: “It is within the White House’s power to move quickly on this issue,” and predicted that the changes he is seeking would be made soon.

This level of engagement with government operations while holding the title of special adviser to the President is not the role of an informal adviser. Icahn should be treated as an SGE. As such, Icahn would be subject to the federal conflict of interest law, which would impose serious penalties on Icahn if he has advanced his personal financial interests in his role as a part-time government employee. Icahn’s actions also would be governed by ethics regulations which prohibit the use of public office for personal gain, and he could also be subject to the STOCK Act, which prohibits insider trading by government employees.

Moreover, this analysis is based just on available public information. Who knows what else Icahn may have been up to?

Icahn and the Trump administration should inform the American people about any other actions that have been taken or advice Icahn has offered in dealing with the government. We also need to know the full extent of Icahn’s financial holdings in order to assess whether there are any other potential conflicts of interest. SGE employees are generally subject to the financial disclosure requirements applicable to most government employees, and Icahn should make this filing.

Icahn has maintained that he has only been offering advice to President Trump. “I’m not making any policy,” Mr. Icahn said. “I am only giving my opinion.”

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    The Trump team has simply declared by fiat that Icahn is not an SGE employee. The facts, however, call that declaration into serious question. The situation brings to mind a statement made in “Alice in Wonderland”:

    “When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean – neither more nor less.”

    “The question is,” said Alice, “whether you can make words mean so many different things.”

    “The question is,” said Humpty Dumpty, “which is to be master – that’s all.”

    In Icahn’s case, the law must be master. No American is above it, not even a billionaire friend of the President.