Podcast Summary: The Political Scene | The New Yorker

Episode: When Carl Icahn Tried to Control Trump

Date: August 31, 2017
Host: Jeffrey Toobin (sitting in for Dorothy Wickenden)
Guest: Patrick Radden Keefe (New Yorker staff writer)

Overview

This episode centers on the relationship between billionaire investor Carl Icahn and President Donald Trump, specifically focusing on Icahn’s influence as Trump’s “special adviser on regulatory reform.” The discussion, led by Jeffrey Toobin and Patrick Radden Keefe, unpacks how Icahn attempted to leverage his advisory role to shape government policy in ways that would benefit his personal business interests, raising questions about ethics, legality, and the inner workings of Trump’s White House.

Key Discussion Points & Insights

1. Introducing Carl Icahn and His Relationship with Trump

• Background: Icahn gained fame as a “corporate raider” in the 1980s through hostile corporate takeovers. He's worth about $17 billion according to Forbes.
• Relationship with Trump: Both Icahn and Trump hail from Queens, have brash personalities, but Icahn is truly self-made while Trump inherited wealth.
  • "It's this aspect of [Trump's] character where he likes to associate himself with more famous business people." (06:03, Patrick Keefe)

2. Early Connections and Business Entanglements

• In the 1980s, Trump sought to curry favor with Icahn, viewing him as an aspirational figure.
• Their most notable business intersection was Atlantic City, where Icahn “saved” Trump’s then-troubled Taj Mahal casino by acquiring distressed debt, allowing Trump to retain his brand presence despite heavy financial losses.
  • "Trump always owed him for that." (06:11, Patrick Keefe)

3. Icahn’s Investment in CVR and Conflict of Interest

• Icahn’s company CVR is a major oil refiner subject to costly government regulations requiring them to blend ethanol into gasoline or purchase expensive credits.
  • "CVR Icahn's company is paying $200 million a year under this regulation." (08:46, Jeffrey Toobin)
• Icahn’s personal stake: He lobbied against regulations that directly cost his company millions, aiming to shift regulatory obligations away from refiners like CVR.

4. Appointment as Trump’s Adviser—and the Loopholes

• Following Trump’s election, Icahn was formally named “special adviser on regulatory reform.” However, he was classified as a “private citizen,” exempting him from conflict-of-interest and disclosure rules that apply to official appointees.
  • "With Icahn, there was this interesting thing where they said, he's coming in... but he's serving as a private citizen. So he doesn't need to give up any of his investments." (10:40, Patrick Keefe)

5. Icahn’s Push for Policy Change

• Icahn’s advisory activity focused solely on the ethanol regulation issue, which directly affected CVR.
• He negotiated with key industry players, convincing the Renewable Fuels Association (the ethanol industry’s main trade group) to shift their position under the impression that the White House (in practice, Icahn) was going to move ahead regardless.
  • "Whatever Icahn said to them, they were given to understand that he was representing the Trump administration." (13:36, Patrick Keefe)

6. Legal and Ethical Ramifications

• Federal law prohibits executive branch employees from working on policy that affects their own financial holdings—unless they are the president or vice president.
  • "Richard Painter, who was the top ethics lawyer for George W. Bush, told me... He was a White House employee, and so he is squarely in violation of that criminal statute." (14:40, Patrick Keefe)
• The legal defense from Icahn and the White House hinged on the notion he wasn’t officially an “employee”—a contention not all experts agree with.

7. The Failed Executive Order

• Icahn drafted an executive order to benefit his company, but it never materialized after press scrutiny and pushback from lawmakers like Chuck Grassley.
  • "There was in fact, an executive order. It never ended up getting signed, but there was a draft." (16:29, Patrick Keefe)
  • "That was something Carl Icahn sent to us." (16:48, White House source, relayed by Patrick Keefe)

8. Icahn’s Abrupt Resignation

• Shortly before publication of Keefe’s investigative piece, Icahn resigned from his adviser role, issuing a public statement framing it as his decision.
• The White House simultaneously backpedaled, disputing that he was ever employed in any meaningful sense.
  • “It wasn't a situation where we would have let him go because he never really worked here in the first place.” (18:28, White House, relayed by Keefe)
  • "You can't fire me, I quit." (19:30, Jeffrey Toobin; echoed by Patrick Keefe)

9. Broader Implications for Trump and Business

• The Icahn episode exemplifies how the Trump administration allowed business figures with vested interests unusual access and influence.
  • "The government is not a vending machine for the president's friends. ...Unfortunately, that's a view that not everybody in this administration holds." (20:54, White House source, relayed by Keefe)

Notable Quotes & Memorable Moments

• On Trump’s Admiration for Icahn:

  • "I like guys like Henry Kravis. I'd love to bring my friend Carl Icahn... We have people that are great. We have people that are better than any of their negotiators. We don't use them, Joe. We use people that are soft and weak and frankly, stupid and incompetent."
    (02:05, Donald Trump)

• On the Surreal Denial from the White House:

  • "It's strange for me, having reported stories about government for years and years, that I have small children and they come up with better alibis than that."
    (18:49, Patrick Keefe)

• On the Nature of Trump-Era Conflicts:

  • “This is the cheapest takeover Carl's ever done.”
    (20:17, Someone close to Icahn, relayed by Keefe)
  • “Let's just pretend it never happened may actually be an encouraging sign.”
    (22:11, Patrick Keefe)

Timestamps for Key Segments

• [01:16] – Introduction & Icahn’s White House Appointment
• [04:36] – Icahn–Trump Relationship Origins and Atlantic City Business History
• [06:43] – What is CVR? Explanation of the Ethanol Credit Issue
• [09:25] – How Icahn’s Adviser Role Was Structured to Avoid Oversight
• [12:08] – What Icahn Did as Adviser: Lobbying and Industry Outreach
• [14:18] – Legal Questions Surrounding His Activities
• [15:27] – How the Draft Executive Order Unfolded and Failed
• [17:49] – The Sequence of Events Leading to Icahn’s Resignation
• [20:08] – Broader Takeaways for Trump, Icahn, and Crony Capitalism

Conclusion

The episode provides a penetrating look at how power, wealth, and personal relationships can shape federal policymaking when transparency, legal checks, and ethical standards are undermined. The Icahn story becomes a microcosm for the broader dynamics at play in the Trump administration—an era marked by blurred lines between public service and private gain.

Host: Jeffrey Toobin
Guest: Patrick Radden Keefe
Podcast: The Political Scene | The New Yorker
Episode Date: August 31, 2017