Why Plutocrats Like Carl Icahn Are Almost Never Held Accountable
Former financial regulator Bill Black says Trump promised to “drain the swamp” but instead filled his administration with Washington insiders and elite billionaires like Carl Icahn
DONALD TRUMP: But the very dishonest media, those people right up there with all the cameras.
JAISAL NOOR: Donald Trump railed against the fake news media in Phoenix on Tuesday, but he didn’t mention how The New Yorker prompted mega-billionaire investor Carl Icahn to quit his advisory role in the Trump administration last week. Icahn resigned just before an article was published a detailed corruption and likely conflicts of interest Icahn likely profited from.
Now, joining us to discuss this from Kansas City, Missouri is Bill Black. Bill is an associate professor of economics and law at the University of Missouri, Kansas City. He’s a white-collar criminologist, a former financial regulator, author of “The Best Way to Rob a Bank is to Own One,” and is a regular contributor the Real News. Bill, thanks so much for joining us, and give us your thoughts on who Icahn is and what his resignation means. Talk about the substance of this New Yorker piece.
BILL BLACK: Icahn has been around a very long time. He’s an old person at this time, who has been very successful as a corporate raider and has heavily invested, in particular in recent times, in energy. Don’t get too purist about all of this. This is really a fight between two sets of very strong moneyed interests.
One set pretends to be very green. These are the ethanol folks. This is a form of fuel that is made by basically taking corn pretty much. It’s not always corn, but in the United States context, it’s mostly corn, and that means mostly Iowa and that means mostly the first primary, which is to say lots of politicians, try to make Iowa corn producers very happy.
One of the ways they came up with was this idea that either your refinery has to be able to accept ethanol and blend it into fuel, because you can’t put ethanol, very much of it, into a standard vehicle without burning out the engine, so don’t do that even if it’s cheaper when you’re driving through Iowa, which it is. It will ruin your car. But blended, of course, it can work even without specialized vehicles.
As an incentive system, they said, if your refinery can’t take ethanol and blend it in, you have to purchase these credits, and there was a cost to doing that. Now, Icahn has refineries, and his refineries don’t blend ethanol, so he has to buy these special credit things. Of course, if he could change the rules so that he no longer had to do that, well then, his refineries would be worth a whole lot more and Icahn, who’s already a billionaire, would be worth at least tens of millions of dollars more.
Now, how to do this? Icahn, of course, was a supporter of Trump. Trump drops his name all the time because he is a famous businessman, and Trump was never a famous businessman contrary to all of his staff. He just loves the staff getting treated, getting to be around real people who are in fact famous for their business skills.
He, Trump, brings Icahn in. Of course, Icahn is very happy to do this as an unpaid adviser with unspecified duties, no salaries, no requirements to do anything, and access to all the key people in secret. In other words, he gets to lobby directly with the top people in the Trump administration. In other words, he has a massive conflict of interest.
Unsurprisingly, when it was announced that he was taking this position, the stock price of his company shot up. In fact, over 10 cents a share and such making him again tens of millions of dollars just getting appointed to this council. It looked like he was going to be successful in changing this rule and being evermore wealthy.
But that infertile media, that fake media, the fake press learned about this and started investigating. The stories started coming out over four months ago, but as you said, in your setup, The New Yorker was just about to run a major expose. But Icahn is smart. He was lucky, as well as smart. This happens, of course, in context of the fallout of Trump’s disaster, the many sides and then the beautiful monuments and the good Nazis and all that stuff that led all these business leaders to rush away from these business councils that Trump had set up.
Icahn resigns at the same time that all these other folks are fleeing, which you would think that means he’s one of the good guys, appalled Trump’s statements. No, not at all. It was just a way to get out and try to reduce the stench of the disclosures coming on his massive conflict of interest. Again, very bright, very lucky, very sleazy.
JAISAL NOOR: Now, if he was an official member of the Trump administration, what he had done, what he was doing would be illegal. But if he was a non-official member, as the Trump administration now claims and as he claims, then the same rules would not apply to him. Is that correct? Can you explain what needs to happen now for him to be held accountable, or do billionaires like Carl Icahn never get held accountable for these crimes?
BILL BLACK: He’s probably not going to be held accountable is the answer. You’re right, employees, when I was a federal employee, starting as a GS 11, I was subject to these conflict of interest rules and I didn’t have much of any wealth to be a conflict, of course. But Carl had massive conflicts and he was set up to advise on getting rid of regulations, an area as to which he has enormous conflict.
The very first thing he emphasized was the one getting rid of the rule that would make him even wealthier. This is outrageous, but the question is, have we lost the ability to have outrage? Probably more to the point, is there anything that will convince Trump’s core supporters that he is the swamp creature? He has no intention of draining the swamp, he is populating it with the greatest predators in the history of the world.
JAISAL NOOR: To Carl’s credit, he was transparent about this. He’s been open about wanting to repeal regulations, especially the ones that would hurt his companies and hurt his profits. Can you talk about that? Also, he has left a big mark on the Trump administration. He personally vetted people like EPA head, Scott Pruitt, who sued his own state because of regulations. He helped put in people that are directly undermining, for example, the EPA, which is supposed to be managing regulations of fossil fuels.
BILL BLACK: I agree. Maybe you get credit for being open about all of these things, although he wasn’t terribly open about this one that we’ve been discussing in terms of the ethanol credit stuff. But it’s true that Carl is blunt. There’s no question that he hates regulation, he hates the rule of law, and that by coming in early for Trump and being so strong and so famous, he’s got an unusual ability to influence the key policymakers.
What people need to understand is there’s all this emphasis that Trump hasn’t gotten any legislative victories. That’s true. But on the regulatory side, there are already literally hundreds of what they consider victories. Now, all of these things make the swamp more toxic, more opaque. All of these things are done to make wealthy people far wealthier in ways many times that will endanger lives and the environment.
This one, not necessarily so much. This one being ethanol. Ethanol is actually a terrible thing. Heavily subsidized, leads to massive monoculture development, particularly outside the United States, does tremendous harm to the environment. This particular thing that The New Yorker is exposing is not a question of a good rule versus a bad rule. Both rules were designed to make wealthy people wealthier and had nothing much really to do with the environment. In the godfather terms, “Tell Michael it wasn’t personal, it was just money.”
JAISAL NOOR: All right. Bill Black, thank you so much for joining us.
BILL BLACK: Thank you.
JAISAL NOOR: Thank you for joining us at the Real News Network.