Carl Icahn’s Failed Raid on Washington
newyorker.com
newyorker.com
How is this shit legal?
In a banana republic? Or in a country that takes these things serious? It all depends on where you live. The absolutely incredible conflicts of interest the Trump administration has brought into the whitehouse ought to have been enough to put several people behind bars. The brands of family members are openly advertised by whitehouse advisors on national TV and the president did not divest himself from his holdings but created some kind of smoke-and-mirrors version of divestment.
It's ridiculous, and it sets the tone for the rest of the nation. If you feel that it isn't legal you are probably right but it would require someone in a position in power to do something about it and that is not going to happen for the time being.
The real problem this causes: precedent has been set and future administrations will not feel bound by these rules any more.
A big part of the problem is that a lot of the ethics rules surrounding the president are just norms, they aren't laws.
If we are real lucky the imperial office of the president will be neutered quite a lot.
This is my preferred outcome for the Trump administration: that it serves as a vaccine, a shot in the arm for those calling for more restrictions on what a single person can do to the country and that this helps to curb a future wanna-be emperor who is actually competent. Trump - fortunately - is a bungler, imagine the damage he could do if he was half as competent as he claims he is. That would be a much larger issue.
http://www.gallup.com/poll/1597/confidence-institutions.aspx
If we are real lucky, the president will have resigned two weeks ago, so obviously we are already not lucky. What we have ahead of us is more of the forest fire in progress, damaging trust. That's what is being neutered, public trust in all of government. And that is risky.
http://www.people-press.org/2017/05/03/public-trust-in-gover...
Al Gore explained himself thusly: "The vice president also observed that he drank a lot of iced tea during meetings, which could have necessitated a restroom break," the FBI summary stated. "It was not uncommon for him, and for that matter the president, to excuse themselves from meetings to use the restroom."[2]
And, boys and girls, unlike the current special prosecutor to investigate Russia's influence in the most recent election, the Democrats brazenly stonewalled and the media let them get away with it.
This kind of stuff is as old as the federal government itself.
Yup. Anyone who doesn't realize this either had a crappy US History teacher or daydreamed instead of paying attention.
[1] https://en.wikipedia.org/wiki/1996_United_States_campaign_fi... [2] http://community.seattletimes.nwsource.com/archive/?date=200...
The other thing to realise is that throughout human history there has always been some degree of grift. In a money driven system like US politics, especially so.
Therefore, it has always been the case that the degree and brazennesss of grift is a part of how it is judged in practice.
So if you want to be honest with yourself, respectful of the history - you've got to ask yourself whether you honestly believe whether Trump is doing a bit of grift for election funds, maybe fund a lifestyle, but otherwise seeks to be a great president. Or like his entire life, is he defined by fraudulent pitches, self-dealing, financial and moral bankruptcy, law-breaking, and stiffing his people every chance he gets?
This is why you get down voted. Not because people think the Democrats have been pure as driven snow, but because they (and past Republicans) have passed that test. Hell, Nixon resigned despite arguably passing that test end it was clear he was getting close. Trump is failing it, big time.
"There are faults on both sides" has always been a cop-out for the worst human behaviour.
From the article...
> One recurring feature of the Trump Presidency has been an acute collective sensation, shared by a substantial portion of the electorate, of helpless witness. Dismayed Americans wait, like spectators at a game that has turned suddenly dangerous, for a referee to step in and cry foul...What this means in practice is a serious deficit of accountability. Whom can you call when the authorities are the ones breaking the rules?
This, for me, is the troubling part of the Trump administration. It's not whether the crap he's pulling is legal or not. It's whether there is anyone with the power to do so who will hold him and his fellow law-breakers to account. And when he can just fire the people that are investigating him, you seriously have to question whether our system really does have the legendary checks and balances we're taught in school or whether we've just never before elected the wrong cohort of leaders who were willing to abdicate the responsibilities of their offices.
And with Trump's FEC appointees blocking efforts to plug the holes that Russia may have used to influence the outcome of the last election, we may not even have the opportunity to exercise the ultimate check on corruption during the upcoming elections.
For example, it took almost two years after Watergate for the impeachment process to even start and over two years before it started to reach its conclusion. And then of course Nixon resigned before it went to trial.
If the whole process had been completed it would probably have been at least 3 years from crime to conviction. Though any sitting President would be foolish to let it go that far: much easier to resign and have your Vice President blanket pardon you.
That's not quite right, the break-in occurred in June 1972 and Nixon resigned in August of 1974 - that's only slightly over two years total (whereas you're suggesting four). It did take almost two years before the impeachment process started (in February 1974), but the process was "concluded" with Nixon's resignation six months after it had started.
https://en.wikipedia.org/wiki/Watergate_scandal
https://en.wikipedia.org/wiki/Impeachment_process_against_Ri...
Of course, it's not quite so simple. Richard Painter, former ethics lawyer to Bush 2 has said about this specific instance that DoJ should investigate on the basis that this was clearly an official role and title.
I would add, that this administration insists everyone watching is a moron, and will thus just let them get away with it. They might be right, we'll just have to see how it plays out in a future episode of President Celebrity Chaos Clown.
In any case, a huge amount of the way things works in government is based on norms including etiquette and ethics, not laws or regulations. When you get people who don't care about norms, things start to fall apart quickly because there's no law or regulation to fall back on.
I like this tidbit that implicitly assumes that guys like Icahn are like Mafia people. I'm still waiting for magazines like The New Yorker to compare the financial executives from Wall Street with Michael Corleone, I'm pretty sure that that will happen once one of them decides to switch camps and pass on to openly supporting Donald Trump.
And before anyone accuses me of being a right-wing paranoid nut, I'm not an American, I've never set foot in the States, have very little skin in this game, I'm just writing down what I consider as being mass-media manipulation (one of my first jobs while I was in my early 20s was to read papers, did that for 3 years, after you're doing that it's pretty easy to see all these journalistic "schemes").
Great quotes in the article as well.
"But, in reality, many New York financiers considered him a buffoon. In 2015, Lloyd Blankfein, the C.E.O. of Goldman Sachs, greeted the suggestion that Trump might run for President by remarking that the notion of the former star of “The Apprentice” having his “finger on the button blows my mind.”
"In 2010, Trump again found himself in trouble in Atlantic City. But this time Icahn was his antagonist. Along with a Texas banker, Icahn was trying to gain control of three Trump casinos. When a lawyer asked, during a deposition, whether Icahn intended to rebrand the casinos, he said that a consultant had deemed the Trump name a “disadvantage.” In an interview, Trump shot back, “Everybody wants the brand, including Carl. It’s the hottest brand in the country.” But in Icahn’s opinion the only real downside to shedding the Trump name was the expense that would be associated with changing all the signage"
"In court papers, Icahn’s lawyers suggested that Trump’s name was no longer “synonymous with business acumen, high quality, and style.” Icahn told the Wall Street Journal, “I like Donald personally, but frankly I’m a little curious about the big deal about the name.” If the Trump brand carried such cachet, he asked, why did Trump properties keep going bankrupt?"
1) Stock prices go up for many reasons 2) Icahn didn't sell to monetize in that gain and hasn't sold yet. And likely wasn't going to sell even if RIN reform passed. 3) Now that he's resigned and the odds of passing any RIN reform is virtually zero, the refinery's stock has zero RIN value in it.
I say it's trivial because $200m a year on a $17B portfolio is barely 0.1% a year. His deal-making efforts are worth many times that, at least 10% a year. So why get tied up in a mud fight with a pig over a scrap of a morsel?
Why do it? Because the penalty for getting caught is both tolerable and much smaller than the reward if you are successful.
"Trump advisor Carl Icahn resigned ahead of negative magazine article"
http://www.latimes.com/nation/nationnow/la-na-icahn-resignat...
> I've been reporting on Carl Icahn's role as an adviser to Trump. Monday, in an email to me, the White House fired him. Today, he resigned.
[1] https://twitter.com/praddenkeefe/status/898674961161662464
What a nice fellow.
> In May, after the revelations about the rin trading by CVR, the senators wrote to the heads of the S.E.C., the E.P.A., and the Commodities Futures Trading Commission, calling on them to investigate. But it could not have escaped the senators’ attention that two recipients of their letter—Jay Clayton and Scott Pruitt—had met with Icahn in the context of securing their jobs. The Senate Democrats cannot issue subpoenas to agencies unless they get the Republican majority to sign on—an unlikely outcome. In May, the C.F.T.C. replied to the senators’ letter: the agency would not be investigating Icahn or CVR, because rins, even though they are commodities, do not trade on a futures market, and the agency therefore had no jurisdiction to look into the matter. By this logic, the fifteen-billion-dollar market for renewable-fuel credits is not regulated by any government agency.
I don't think that will hold water.
Do you even know what insider trading is, and anything about the laws surrounding it?
That's not so much insider trading, and "market manipulation" also doesn't completely fit. I guess Buffett has just become a self-fulfilling investment prophet.
The real reason current returns are lower is that the constraints on Buffett have grown over time and now are the heaviest they've ever been. Investing a $400B portfolio offers him far fewer opportunities than a $50M or even $10B portfolio did.
And announcements of his purchases are very damaging to his returns. Typically only has a month or two before he's required to file with the SEC disclosing significant new purchases. So accumulating billions of dollars of stock in most companies in those months without driving up the price is either impossible or really difficult. Once he files his SEC report, the prices almost always increase substantially from 'free riders' trying to piggyback on his trades.
The stock price popping up quickly not good for Buffett, in fact it's terrible. It forces him to stop buying what he regarded as a bargain. He never flips his positions, he's going to hold them for many years, usually many decades. The free rider problem means he has to invest less, and make less on each investment, hurting his returns.
And the "sweet deal" allegation is pretty ludicrous. Berkshire is a very special financial source, a CEO can call Buffett directly and get a hard price almost immediately. The price he gives is never very good, but for businesses that need money badly they know he will always close the transaction quickly without trying to renegotiate or bailing out.
Goldman Sachs during the 2008 crisis was a good example. Goldman is owned/run by hard eyed partners, but during the crisis their backs were against the wall. They had to add more capital, and were being forced to sell shares at really horrible prices to raise it. They got $5B from Warren in an emergency phone call, and in preferred shares were less dilutive than selling common shares.
No one else on earth was willing to step up during that immense crisis and give Goldman a better deal, more likely any deal at all (Lehman had just filed bankruptcy). If someone else gave them a slightly better offer, the sharks at Goldman would have taken it.
And Buffett is always laughed at when making these deals because wall street execs claim he overpaid. Its not till years later when the results come in that revisionists says they were obvious sweetheart deals. Yet somehow the revisionists never picked up the phone to get in on them.
There is nothing illegal about having an edge in the capital markets.
Even if the CFTC did "investigate", there isn't a prohibition on having "inside information" in the futures markets either... for the most part.
You have to look at the history and intent. Investing in companies is a great way to grow an economy, adding a ring of confidence by the state helps promote that so they can push that kind of investment exclusively on the population. As a result stock investing is really popular but the rules around it are extrapolated to being relevant to other capital markets only due to the similarities of trading.
Using information only you have to trade in the market is not "insider trading" by itself; in fact, it's the only way the markets can actually function!
https://www.sec.gov/fast-answers/answersinsiderhtm.html
> The SEC adopted new Rules 10b5-1 and 10b5-2 to resolve two insider trading issues where the courts have disagreed. Rule 10b5-1 provides that a person trades on the basis of material nonpublic information if a trader is "aware" of the material nonpublic information when making the purchase or sale.
Are you just pointing out that the SEC will come after you even if you're not trading against the interests of your shareholders/clients/whatever?
He tried to pull a fast one and even wrote an executive order, hoping Trump would sign it. Even though it didn't work out, the refinery made handsome profits by short-selling a regulatory instrument, apparently by exploiting information from Icahn.
It's an interesting background piece around Trump's regulatory teardown, one of the few issues where he can claim to have accomplished anything close to his campaign promises.