Federal investigators have issued subpoenas for information on Carl Icahn’s efforts to change biofuel policy while serving as an adviser to President Donald Trump, according to regulatory filings.
The U.S. Attorney’s office for the Southern District of New York is “seeking production of information” pertaining to Icahn’s activities regarding the Renewable Fuel Standard, according to a Form 10-Q that Icahn Enterprises LP filed on Friday with the U.S. Securities and Exchange Commission.
The investigators also want information on Icahn’s role as an adviser to the president, the document says.
“We are cooperating with the request and are providing information in response to the subpoena,” Icahn Enterprises said in the filing. “The U.S. Attorney’s office has not made any claims or allegations against us or Mr. Icahn.”
Representatives of White House and Icahn did not immediately respond to messages seeking comment. Wyn Hornbuckle, a spokesman for the Department of Justice, declined to comment.
CVR Energy shares sank as much as 2.9 percent to $30.50 Wednesday, the steepest intraday decline since Oct. 23.
When Trump named Icahn as an unpaid “special adviser” on Dec. 21, he tasked the billionaire with helping to shape his regulatory agenda. By August, Icahn had left the role, after drawing criticism from senators and watchdog groups for pushing a change to the renewable fuel program that would benefit CVR Energy, an independent oil refiner in which he owns a majority share.
Specifically, Icahn wanted the Environmental Protection Agency to alter the way it administers the Renewable Fuel Standard, a program that requires refiners to use biofuel. Icahn wanted the EPA to relieve refiners of that compliance burden, potentially shifting it to fuel blenders. EPA Administrator Scott Pruitt specifically ruled out that policy change in a letter to a handful of farm-state senators last month.
In the initial days that change was under discussion, however, the price of Renewable Identification Numbers, the credits used to show compliance with it, fell. Earlier this year, Icahn told Bloomberg that he was betting against the credits by delaying purchases in the expectation their value would fall. CVR saved about $60 million in the first quarter, regulatory filings show.
Overall the prices for the credits have been volatile. The RIN tracking ethanol consumption, for example, tumbled some 35 percent in one day after it was reported that Icahn struck a deal for changes with segments of the ethanol industry. That deal never resulted in policy changes.
The U.S. Attorney also sent subpoenas to CVR Energy for information on its activities, as well as those of CVR Refining and Icahn, according to a separate filing by the refiner. CVR’s refineries in Kansas and Oklahoma rely mostly on buying credits to comply with the biofuel mandate.
RINs tracking 2017 ethanol consumption targets fell as much as 4.3 percent Wednesday to 90 cents in intraday trading. That’s the lowest in at least two weeks, according to broker data compiled by Bloomberg.
Icahn’s role as an adviser to Trump drew scrutiny on Capitol Hill as Democratic lawmakers argued his appointment ran afoul of ethics standards and presented a conflict of interest because Icahn hadn’t made any obvious effort to separate his business holdings from his broad mandate to address regulations.
“It’s clear that the company crossed a number of lines in influencing policy while Icahn had this role as special adviser,” said Tyson Slocum, director of the energy program at the watchdog group Public Citizen. “It’s important for prosecutors to be looking into the actions and activities of Icahn and his company around biofuel policy.”
The value of Icahn’s stake in CVR increased by $491 million between Nov. 8 and Aug. 2, to about $1.4 billion, a period running from Trump’s election to the day before reports surfaced that the Trump administration was set to reject the bid to relieve refiners of their burden to satisfy annual biofuel quotas.