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Carl Icahn Tests Out Have-The-President-Pass-Policy-For-You Investment Strategy

One way to arbitrage regulatory outcomes is to whisper them into your friend Donald Trump's ear.
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Betting on Washington is a great way for an investor to lose money. Even when you think you might have a lay-up – like say, Bill Ackman and the federal probe of Herbalife – DC has a way of mucking things up. Perhaps the range of potential outcomes in the political arena is broader than those in business. Maybe people just underestimate their own political bias.


But Carl Icahn has an edge, and that edge is one Donald Trump. When you have an old buddy in the White House who is as impervious to shame as you are, it's only natural that the arrangement presents an investment opportunity. As Bloomberg reports:

Billionaire investor Carl Icahn and the leading U.S. biofuel trade group provided a deal to the Trump administration for revamping the Renewable Fuel Standard that would give both parties a long-sought change to the regulation, according to people familiar with the agreement.

The parties, including representatives of refiner Valero Energy Corp., presented the White House with a memorandum containing draft language it could use to direct the Environmental Protection Agency to make the adjustments. A presidential memorandum could be issued sometime soon, according to the people, who declined to be identified discussing ongoing negotiations.

It's a classic Uncle Carl move: unambiguous, totally direct, unflinchingly self-interested. And you can't really blame him for tossing the proposal against the Oval Office wall to see if it'll stick: He's a billionaire hedge funder with his fingers in industries from CVR Energy (which would benefit from the ethanol regulation in question, to nutritional milk shakes. Finding profit opportunities is what he does (at least when he's not trying his hand at the film documentary).

The only thing that would keep the ad hoc regulatory czar and informal economic adviser to Trump from pursuing such baldly conflicted policies is having a bad-look detector with even the slightest functionality. But the 81-year-old Icahn – who, recall, once called Bill Ackman a whiny little Jew – has long since given his last shit. On that note, remember this, from the campaign?

“Over my years I’ve listened to a lot of salacious talk in locker rooms, bachelor parties, et cetera, by a lot of high-level people, some of whom are now supposedly so outraged,” Icahn told in a phone interview. “All I can do is refer to that great quote, ‘Let he who has not sinned cast the first stone.'”

This is what makes Icahn the perfect figure to occupy Trump's expansive orbit. He acts like a prism for the president's most venal and uncouth tendencies, refracting them into a brilliant rainbow of nakedly self-serving opportunism. While every industry in America is clamoring to win friends and influence policy in the White House, Icahn is content to just waltz in with a plan that would directly benefit him and leave it right on the White House doorstep.

Few would risk their reputations by approaching the White House with such clear conflicts of interest and personal stakes attached. But Icahn lacks scruples. In this way he does the public the service of essentially mapping out the farthest reaches of the Trump administration's willingness to engage in crony dealmaking.

In the case at hand, he may have found a limit: The White House denied an order was “in the works.” At least for now, that is. Don't underestimate Uncle Carl.



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