May 09, 2018

Warren, Colleagues Question Carl Icahn, Scott Pruitt on Renewable Fuel Standard Waiver for Icahn's Refinery

Icahn's CVR Energy Claimed "Economic Hardship" - but Made a Profit of over $200 Million in 2017; DOJ Investigating Icahn for Potential Illegal Actions While Advising President Trump on RFS

Letter to Icahn (PDF) |  Letter to EPA (PDF)

Washington, DC - United States Senators Elizabeth Warren (D-Mass.), Sheldon Whitehouse (D-R.I.), Sherrod Brown (D-Ohio), Tammy Duckworth (D-Ill.), Tammy Baldwin (D-Wis.), Amy Klobuchar (D-Minn.), and Tina Smith (D-Minn.) sent letters to Environmental Protection Agency (EPA) Administrator Scott Pruitt and Carl Icahn, billionaire former adviser to President Trump and Chairman of CVR Energy Inc., to request information on reports that the EPA granted CVR an "economic hardship waiver" from the Renewable Fuel Standard (RFS). The senators have previously raised concerns about Icahn's actions related to the RFS and his access to key Administration RFS decision makers when he was a White House special adviser. They expressed concern that Mr. Icahn, who is currently under investigation by federal prosecutors for potential illegal activity while working as a White House adviser to change RFS regulations, received a "hardship waiver" even though CVR made a profit of over $230 million in 2017.

In 2016, Mr. Icahn, who was a public supporter of Scott Pruitt's nomination as EPA Administrator, bet heavily on a drop in the price of renewable fuel credits. Mr. Icahn then secured a position as a senior adviser to President Trump and recommended personnel and policies that did in fact cause the price of these credits to drop - ultimately resulting in a $50 million windfall for his company. After Mr. Pruitt was nominated, Mr. Icahn said that Scott Pruitt "feels strongly about the absurdity of these (RFS) obligations."

"We are troubled by the news that a corporation that made a profit of over $200 million in 2017, and that is owned by a billionaire former 'special adviser' to the President who is currently under investigation by federal prosecutors for his activities in the RFS market, has now received a 'hardship waiver' from the RFS," wrote the senators.

Refiners can receive a temporary exemption from RFS requirements if they produce less than 75,000 barrels of oil per calendar day and prove to the EPA that complying with the RFS "would impose a disproportionate economic hardship" on them. The EPA has granted at least 24 waivers in recent months, a significant change from the 6-8 waivers granted annually in the past several years. CVR reported profits of over $230 million in 2017 and reportedly received an exemption this year after being denied in a previous year. The senators asked the EPA and Mr. Icahn to answer questions about the exemption and how it was granted by no later than May 22, 2018.

In February 2017, Senator Warren led a letter to White House Counsel Don McGahn about the role Mr. Icahn was playing in President Trump's White House, how he was involved in the selection of Scott Pruitt to be the nominee for EPA Administrator, and to what extent Icahn influenced RFS policy. They also asked the EPA for information about Mr. Icahn's role in determining the fate of the RFS. In May of 2017, they called on the heads of the Commodities Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), and the EPA to investigate the activities of Mr. Icahn for potential insider trading, market manipulation, and other securities and commodities law violations in the market for renewable fuel credits. Mr. Icahn's company disclosed in its November 2017 public SEC filings that DOJ had opened an investigation of Mr. Icahn's activities in the RFS market.

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