Letter to Congress in Response To Public Citizen’s Formal Complaint About Carl Icahn and the Lobbying Disclosure Act

Reflection of a Refinery — Making the Joy of Travel Possible*

March 10, 2017

Julie E. Adams
Secretary of the Senate
232 Hart Senate Office Building
Washington, D.C. 20510–7116
lobby@sec.senate.gov

Karen L. Haas
Clerk of the House of Representatives
U.S. Capitol, Room H154
Washington, D.C. 20515–6601
Karen.haas@mail.house.gov

Re: Public Citizen’s Congressional Complaint of Carl Icahn’s possible violation of the Lobbying Disclosure Act.

Dear Ms. Adams, and Ms. Haas:

Public Citizen’s (“PC”) specious complaint (the “Complaint”) to Congress suggesting that Carl Icahn violated lobbying laws, is without merit. The Complaint purports to validate itself by citing certain provisions of the Lobbying Disclosure Act (the “Act”) but had it cited certain other provisions of the Act the Complaint would have nullified itself, as elucidated further below. Mr. Icahn has violated no laws and certainly has not acted as a lobbyist. If anything, Mr. Icahn, has been an advocate for many middle class Americans and their IRA’s, 401(k)’s, pensions, and for not for profit endowments, and others that have relied on the distributions (aka “dividends”) from American companies like CVR Refining, the publicly traded company that owns and operates critical infrastructure that is essential to our national security, to which the Complaint relates.

The Complaint initially lists the three thresholds that must be met to trigger the registration requirement under 2 USC § 1603. None of these three thresholds have been met by Mr. Icahn, likewise, the Complaint does not provide any empirical data to substantiate its dubious assertions. The Complaint goes on to state that “on December 21, 2016, President-Elect Donald J. Trump named Icahn special advisor to the President on Regulatory reform.” It continues on, stating, “as special advisor, Icahn is an uncompensated private individual who does not serve as a government official subject to the requirements and exemptions applicable to government employees.” On February 27, 2017, Mr. Icahn submitted a formal proposal concerning certain recommendations on revisions to the Renewable Fuel Standard (“RFS”) Program, as President Trump had requested. While the Complaint points out these facts, it fails to point out, inter alia, that in 2 U.S.C. § 1602(8)(B)(vi) the term “lobbying contact” does not include a communication that is “made in the course of participation in an advisory committee subject to the Federal Advisory Committee Act” and further fails to point out, inter alia, that in 2 U.S.C. § 1602(8)(B)(viii) the term “lobbying contact” does not include, “information provided in writing in response to an oral or written request by a covered executive branch official or a covered legislative branch official for specific information”. These are just a few reasons, and examples of provisions out of several within the Act, that demonstrate the Complaint is without merit and is spurious, as many believe it is merely a cover for the underlying goals of certain of the PC constituency, namely, those that loathe the fossil fuel industry and harbor an irrational proclivity toward environmental extremism far off the rail of accepted mainstream scientific facts, and is just the latest in an ongoing series of attacks on Mr. Icahn and those of us who share concerns about our national infrastructure; it isn’t about non-compliance with the Act, it is merely propaganda perpetrated by the leftist environmental extremists establishment in support of their anti-western agenda.

CVR, an independent refiner, owns two refinery facilities, one in the small town of Wynnewood, Oklahoma, about one half hour from where I grew up, and another in Coffeyville, Kansas, as well as a network of pipelines throughout the U.S. with a nexus at the West Texas Intermediate delivery point in the global oil trading hub of Cushing, Oklahoma. CVR is a master limited partnership and has historically paid out significant distributions (essentially dividends but technically called distributions) every quarter that the aforementioned middle class and not for profit beneficiaries have relied on to help make ends meet. But not anymore.

Due to the manner that the EPA has implemented and administered the RFS’ Renewable Identification Number (“RIN”) trading program and the establishment of the point of obligation, CVR, in 2016, had no alternative but to suspend these distributions indefinitely as the company’s profits have been siphoned away by having to use these funds to purchase RINs to the tune of about $ 213,000,000 every year, over the past three years. Ironically, the Complaint states that if the Trump Administration implements the regulatory changes recommended by Mr. Icahn, that the changes would save CVR hundreds of millions of dollars a year. In a PC press release dated February 28, 2017 entitled, “Top Trump Adviser to Reap Possible $200 Million Annual Benefit From President’s Executive Order on Renewable Fuel Standard” it states, “Regardless of the merits of shifting the RFS point of obligation, the issuance of an executive order that could directly benefit a close adviser to the president…” giving it the appearance that Mr. Icahn will reap a $ 200 million windfall profit. The reality is, Mr. Icahn isn’t going to reap a $ 200 million annual benefit if the RFS point of obligation is shifted, we, the shareholders, will only be getting back what was taken from us in the first place by an ill-conceived government regulation.

Moreover, CVR’s stock price has fallen from a high of about $ 35 per share in 2013 to a low of about $ 6.25 per share in 2016. These shares represent a lot of savings, retirement, and not for profit endowments’ investments, 82% of which have evaporated over the past 3 years, not due to the competitive markets of a capitalist economy, but due to ill-conceived government regulations. All of this added insult to injury as CVR and other refiners were, contrary to popular belief, also negatively affected by the oil price collapse in 2014–2016.

Again, now think about this, 82% of an American company’s market value wiped out, or looking at it from the perspective of middle class investors, 82% of the value of part of their hard-earned savings and retirement funds, wiped out, all solely due to an ill-conceived government regulation, and $ 200 million per year of not only shareholders’ dividends but the source of funds needed for the company’s maintenance CapEx program, extorted and transferred to its larger integrated oil company competitors like BP, to large foreign owned retail convenience store chains, and to others, including criminal elements that create phony RINs by taking advantage of the ill-conceived regulatory implementation and administration of the 2007 energy security law by a certain few overzealous bureaucrats at the EPA that failed to consider the potential negative consequences of their implementation decisions, blinded by their overwhelming propensity to prioritize green over everything else; these are the one’s reaping a windfall, having invested nothing up front, at the expense of those who did. This is the wholesale destruction of one American company out of several independent refiners being driving to potential bankruptcy, with its workers permanently laid off, solely due to ill-conceived government regulations.

If the corrupted RIN trading program is not changed, CVR, as well as other small, independent refiners, will not be able to make the necessary capital investments to maintain, replace and upgrade their equipment, directly impacting their ability to remain competitive. CVR’s refinery assets are a significant component of our nation’s critical and essential infrastructure as these refineries and pipeline systems are a primary supplier of gasoline and other fuels in the PADD II region, the price of which could escalate if even one refinery were to go offline for an extended period of time. The RIN program, as it now operates, is in fact, not only a destroyer of economic wealth that many middle-class people depend on, it has become a direct but silent assault on our national security. Absent an executive order to change this regulation to save these independent refiners from this egregious corporate welfare mechanism, the RIN program should be halted immediately for a 90 or 180 day period to allow a contemporaneous review by the Administration’s new EPA staff under the leadership of Scott Pruitt, as well as Congress.

Mr. Icahn, and many others including myself, contrary to what many on the left say, are not opposed to clean air and biofuels, or what the RIN trading program was originally intended to accomplish, but it doesn’t, it has gone terribly off course from its original intent. So what if Mr. Icahn makes a little money, everyone else benefits too, not just Mr. Icahn. Revising the RIN program will help to lift all boats, those of the middle-class and those of the not for profit endowments, among others, as well as help to secure our nations’ energy production and transportation infrastructure. I urge all those with the power to do so to take immediate action to remedy this terrible situation, whether it be by an executive order signed by President Trump, or new legislation drafted by Congress to permanently right this wrong.

Finally, we ask that Congress not waste taxpayer’s dollars on an investigation about spurious claims that Mr. Icahn violated the Act. PC has already investigated and laid out their findings and opinions in their “fake” Complaint, and as shown above, the Complaint is without merit, Mr. Icahn has done nothing wrong. Thank you for your time and consideration of the information set forth herein.

Sincerely,


Randy Whitehead,
Chairman
Infrastructure Realty Trust

RCW/tjc

cc:
Senator Mike Enzi
379A Senate Russell Office Building
Washington, D.C. 20510
senator@enzi.senate.gov

Senator John Barrasso
307 Dirksen Senate Office Building
Washington, D.C. 20510
senator@enzi.senate.gov

Administrator Scott Pruitt
U.S. Environmental Protection Agency
USEPA Headquarters
1200 Pennsylvania Avenue, N.W.
Mail Code: 1101A
Washington, D.C. 20460
Pruitt.scott@Epa.gov

Carl C. Icahn
767 Fifth Avenue, 47th Floor
New York, NY 10153


#TimetoBuild

*Reflection of a Refinery — Making the Joy of Travel Possible — by Kelly Thompson, Director of Corporate Communications, Infrastructure Realty Trust.