Carl Icahn, Critic of the EPA, Is Helping Donald Trump Shape It
Source: By Rebecca Ballhaus, Amy Harder and David Benoit, Wall Street Journal • Posted: Tuesday, December 6, 2016
Investor Carl Icahn, an early supporter of Mr. Trump’s who became a top donor to his campaign, is among several people talking to the president-elect about who should lead the EPA, according to two people familiar with their conversations. Mr. Icahn has spent months publicly blasting the EPA for its regulations, which the chief executive of a company in which he has a controlling stake, CVR Energy Inc., estimates will cost the firm more than $200 million this year.
Mr. Trump has said his business acumen is a key qualification for the presidency, and his naming of several successful businesspeople to cabinet posts—and having Mr. Icahn vet EPA candidates—is in keeping with that message. Republicans have long said EPA regulations stifle businesses and curtail economic growth.
But there is growing concern within the Trump transition team about the number of wealthy individuals and their allies being appointed to top posts. Some advisers see the next round of nominations for domestic policy posts as an opportunity to bring on individuals with a more diverse set of backgrounds, such as state-level elected officials.
Mr. Icahn has interviewed several prospective EPA administrators, including Jeffrey Holmstead, an assistant agency administrator during the George W. Bush administration. Until recently, Mr. Holmstead was a registered lobbyist on EPA and Energy Department issues, and he is a lawyer at a firm, Bracewell LLP, that lobbies for oil refineries, though it doesn’t work directly for Mr. Icahn.
“Over the last few weeks, I’ve spoken with a number of candidates, three or four, including Holmstead, who I believe to be very impressive,” Mr. Icahn said Friday in an interview. CVR declined to comment.
Some advisers inside the transition team are pressing for Mr. Trump to select a set of people with more diverse backgrounds for the EPA, energy and interior posts, which could come as early as this week, according to two people involved in the transition. Concerns have been raised in the New York and Washington transition offices about the public optics of the cabinet picks and more specifically about Mr. Holmstead’s recent status as a lobbyist, according to a transition adviser.
Mr. Icahn pushed back on criticism his wealth and financial interests were cause for concern. “It’s not OK for someone that came from a poor background and made literally billions of dollars for all shareholders to give advice to a president that he hopes will make much-needed changes in our economy?” Mr. Icahn said. “I’d like to understand the logic.”
So far, Mr. Trump’s choices for four cabinet positions—treasury, commerce, education and transportation—have a combined net worth of at least $8.1 billion, more than four times the net worth of President Barack Obama’s appointees for those posts in 2013, according to a Wall Street Journal analysis.
That concentration of wealth rubs against Mr. Trump’s populist tone during the campaign, when he pledged to champion working-class voters and said he—unlike other candidates—wouldn’t be beholden to special interests.
Newt Gingrich, former speaker of the House and a top Trump supporter, said in an interview that most of the appointees are “outsiders” and that “Trump believes in investing in winners.”
Vice President-elect Mike Pence said in an interview that “the standing order from the president-elect is, ‘I want the best men and women for these positions.’ ” Mr. Pence also praised the “diversity of backgrounds” of the candidates being considered for White House posts.
Mr. Holmstead isn’t considered the front-runner for the EPA job. He is one of several candidates Mr. Icahn says he can support. The leading prospective nominees include Kathleen Hartnett White, former chairman and commissioner of the Texas Commission on Environmental Quality, and Scott Pruitt, Oklahoma’s Republican attorney general. Ms. White and Mr. Pruitt met with Mr. Trump on Monday, while Mr. Holmstead hasn’t yet met with the president-elect.
Mr. Holmstead on Nov. 18 deregistered himself as a lobbyist for eight energy companies, including Duke Energy, Southern Co. and Ameren, a move that would put him in compliance with the transition’s mandate to “drain the swamp” of lobbyists and special interests and ban them from administration jobs.
“Since the election, I have talked with a number of Mr. Trump’s supporters about a lot of EPA issues,” Mr. Holmstead said Friday. “I certainly enjoyed talking with Mr. Icahn and understand that other folks under consideration for the EPA job have had the same opportunity.” He added: “In no conversation with anyone have I agreed to take any particular action on any EPA issue should I be appointed to a position at EPA.”
Mr. Icahn’s particular interest is in the renewable fuel standard, a federal mandate enforced by the EPA that requires refineries to blend an increasingly large amount of ethanol into the nation’s gasoline supply. Mr. Holmstead’s firm, Bracewell, has done work for refineries on the mandate but doesn’t work for CVR.
CVR is one of several smaller refineries pushing for the EPA to change a part of the mandate that requires companies that don’t have infrastructure to blend ethanol with gasoline—such as CVR—to buy credits from companies that can. The latter category includes bigger oil firms that have both refineries and gasoline stations, such as Royal Dutch Shell and BP PLC.
In August, Mr. Icahn sent a letter to the EPA criticizing the system. At an investor conference hosted by CNBC in September, Mr. Icahn said “arrogant” regulators who didn’t have markets or management experience were slowing companies down, and he specifically targeted staff at the EPA.
On Friday, Mr. Icahn said his role in the EPA selection was “not necessarily a question about the environment” but was about changing regulatory agencies that are “scaring businesses.”
In September, Mr. Trump’s campaign website published—but then quickly removed—a policy platform appearing to back the argument by CVR that the current ethanol mandate rules favored big oil companies over small refineries.
Mr. Trump has said he backs the ethanol mandate. He hasn’t weighed in publicly on the particular policy Mr. Icahn wants changed, and his transition team didn’t return requests for comment.
Mr. Holmstead also faces other hurdles to being named EPA chief in a Trump administration. He acknowledges that human activity affects climate change, which marks a contrast with some other EPA contenders, such as Ms. White, now a senior fellow at the Texas Public Policy Foundation.
Environmentalists have criticized the former Bush official for being a Washington fossil-fuel lobbyist. “He’s exactly the sort of swamp creature that Trump said he wouldn’t appoint,” said Jamie Henn, spokesman for environmental activist group 350.org.