Meet Carl Icahn, the billionaire advising Trump on regulations

During the election campaign, Donald Trump called for a dramatic overhaul of the federal government regulatory apparatus. He argued that 70 percent of federal regulations could be eliminated, and he promised to cut two of them for every new one that’s enacted. To turn his vision into reality, President-elect Trump has turned to another billionaire, this time in the role of special adviser: Carl Icahn.

Now 80 years old, Icahn is chairman of Icahn Enterprises (IEP) and made his fortune on Wall Street as an activist investor. That means he buys stocks that he considers to be undervalued, presses the company’s board of directors for dramatic changes (which often means a sale of the company) and sells the shares at a tidy profit when investors bid up their price. 

He has tangled with a myriad of businesses, ranging from airlines such as the now-defunct TWA to media conglomerates such as Viacom (VIA.B) and food conglomerates such as RJR Nabisco, now known as Mondelez International (MDLZ).

Icahn doesn’t shy away from a fight. He invested in nutritional supplement maker Herbalife (HLF) even though a rival billionaire investor, Bill Ackman, had declared the company a fraud and took a short position in Herbalife shares (a bet that would pay off if the share price declines). According to Herbalife, Icahn is currently the company’s biggest shareholder.

Icahn also has made his share of blunders, such as his investment in the now-defunct video-rental chain Blockbuster, which he described as his worst move ever.   

“He is the smartest guy that I have ever met,” said Mark Stevens, author of the 1993 biography “King Icahn: Portrait of a Renegade Capitalist.” “He is very analytical, obviously, from what he’s done,” said Stevens, “so he’s ideal for analyzing what needs to be done with the regulatory environment.”

Officials from both parties have lamented the growth of the federal bureaucracy for decades and have often promised to fix overly burdensome regulations. The Competitive Enterprise Institute noted that the Federal Register, where proposed and final rules are published, has hit 91,642 pages, the most in its 81-year history.

“A lot of them are silly, but most of them don’t cost anything,” said Dean Baker, co-founder of the liberal Center for Economic Policy and Research, adding that he’s worried that Icahn’s inclinations wouldn’t necessarily be for the “public good.”

During his many boardroom battles, Icahn often argues that he’s working in the best interest of all shareholders. Stevens and others, though, have countered for years that the Brooklyn, New York, native is interested only in himself and that his strong suit is agitating for change rather than operating companies.

“Carl hates people [and] if you operate a company, you have to like people,” said Stevens, who likened the billionaire to a guard dog who jumps on the neck of a CEO and doesn’t let go.

In a recent interview with CNBC, Icahn argued that regulations impede economic growth. He also rejected criticisms that he wouldn’t act in the best interest of taxpayers because of his many investments. He didn’t respond to a phone message left at his office, and officials from the Trump transition team didn’t respond to a request for comment.

Icahn’s many critics over the decades accuse him of focusing too much on short-term gains at the expense of long-term growth, a claim he rejects.

“He’s widely disliked by corporate CEOs and long-term investors alike, and putting him in charge of regulatory rollbacks is almost certainly a guarantee of a race to the bottom -- which will hit working families in wages, savings, health, the environment and much more,” wrote Andy Green, managing director for economic policy at the left-leaning Center for American Progress, in an email.  

Icahn’s influence on Mr. Trump already has been seen in important policy decisions such as the choice of Steve Mnuchin as Treasury secretary and his fellow billionaire Wilbur Ross to head the Commerce Department, according to The Wall Street Journal, 

Icahn told the paper that “what Trump is trying to achieve is to show business in a lot of this country they aren’t going to be ruined by absurd regulations by bureaucrats.”

Major news organizations often prepare obituaries for famous people like Icahn in advance. While performing such a task for Bloomberg News, Stevens was asked to reflect on Icahn’s legacy.

“My answer was, after I thought about it for a moment, is that he doesn’t have a legacy,” Stevens said. “Carl never built a company. He never created anything.” 

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    Jonathan Berr is an award-winning journalist and podcaster based in New Jersey whose main focus is on business and economic issues.