In December 2016, President Trump named billionaire investor Carl Icahn as a special advisor for overhauling the U.S. regulatory framework.[i] Through his firm, Mr. Icahn’s portfolio includes investments in a wide variety of industries including energy. Before this announcement, Mr. Icahn had already advised President Trump on the nomination of Scott Pruitt to head the Environmental Protection Agency.[ii] In announcing their decision to give Mr. Icahn an advisory role, the Trump transition team explicitly asserted that Mr. Icahn would not be “serving as a federal employee or a Special Government Employee and will not have any specific duties.” [iii] As a result, the White House claims that when Mr. Icahn advises the president in his current role, he does so only as a private citizen and does not have to follow government ethics rules or sell any financial holdings to reduce conflicts of interest.

However, the policies Mr. Icahn has advocated to President Trump demonstrate the dangers in allowing him to advise the president without following the ethics requirements of a government employee. For example, Mr. Icahn has pushed to shift the compliance requirements of biofuel quotas from refining firms to fuel-blending companies while he currently sits as the majority shareholder of the refining firm CVR Energy.[iv] CVR would have saved more than $200 million in costs last year alone if the regulations had been changed according to Mr. Icahn’s suggestions.[v] Since President Trump’s election, Mr. Icahn’s stake in CVR has climbed more than $500 million in value.[vi] In another instance of questionable conduct, during the confirmation hearings of Jay Clayton, President Trump’s nominee to lead the Securities and Exchange Commission, Mr. Clayton stated that he had met with Mr. Icahn shortly after he had been nominated for the position.[vii] The discussion centered around the merits of activist trading, the strategy of buying shares in a publicly traded firm with the goal of gaining the ability to influence the firm’s future decisions, with Mr. Icahn advocating that activist trading was beneficial to the U.S. economy. Mr. Icahn himself is a well-known activist trader and due to his extensive participation in the stock and bond markets would be greatly interested in the future direction of the SEC on this question.

The Trump administration’s position that Mr. Icahn is not a federal employee or special government employee appears to be contradicted by an opinion issued by the Department of Justice’s Office of Legal Counsel (OLC). In addressing the fluidity by which an “informal advisor” to the president, such as Mr. Icahn, may take on the status of a special government employee, OLC noted that the term “employee” was “no doubt intended to contemplate an employer-employee relationship as that term is understood in other areas of the law.”[viii] In that opinion, when the informal advisor called and chaired several meetings with agency employees and “assumed considerable responsibility” for coordination, OLC determined that the advisor “quite clearly engag[ed] in a governmental function,” and for this reason should be “designated as a special Government employee” for purposes of this work.[ix]

OLC’s opinion also rejected the view that an actual act of appointment is necessary “for an individual to be regarded as an officer or employee in a particular case where the parties omitted it for the purpose of avoiding the application of the conflict-of-interest laws.”[x] By avoiding a formal appointment, the Trump administration attempted to insulate Mr. Icahn from the conflict of interest laws. However, by assuming the formal title of special advisor with specific responsibilities to overhaul the U.S. regulatory framework, the Trump administration has laid the foundation for him to be considered an employee. As a result, his meetings or other consultations with government officials or members of the private sector on behalf of the administration with regard to regulatory reform and the degree to which he assumes responsibility for this area may provide the basis to conclude that he is engaging in a governmental function and therefore should be subject to conflict of interest laws.[xi]

Mr. Icahn is in a high-profile position to assist in crafting the U.S. regulatory framework while directly profiting off the decisions that are being made. Government ethics laws are created to prevent these explicit conflicts of interest, and the Trump administration cannot insulate Mr. Icahn from the application of the ethics laws simply by refusing to classify him as a government employee.

[i] Patrick Temple-West, Trump taps investor Icahn to advise on regulatory reform, Politico, Dec. 21, 2016, available at

[ii] Mario Parker, Icahn Cheers Trump EPA Pick Amid Calls for Fuel-Rule Revamp, Bloomberg, Dec. 9, 2016, available at

[iii] The Trump-Pence Transition Team, President-Elect Donald J. Trump Names Carl Icahn Special Advisor to the President on Regulatory Reform, Dec. 21, 2016, available at

[iv] Jennifer A. Dlouhy and Mario Parker, Trump Said to Consider Biofuel Plan Between Icahn, Ethanol Group, Bloomberg, Feb. 27, 2017, available at

[v] Eric Lipton, Icahn Raises Ethics Flags With Dual Roles as Investor and Trump Adviser, New York Times, Mar. 26, 2017, available at

[vi] Zachary Mider and Jennifer Dlouhy, Icahn Bets Against Renewables Market He Wants Trump to Overhaul, Bloomberg, Mar. 17, 2017, available at

[vii] Benjamin Bain and Zachary Mider, Warren Wants SEC to Review Icahn’s Role Advising Trump on Rules, Bloomberg, Mar. 23, 2017, available at

[viii] Memorandum Opinion for the Attorney General, Conflict of Interest – Status of an Informal Presidential Advisor as a “Special Government Employee”, Opinion 77-9 (Feb. 24, 1977), available at

[ix] Id.

[x] Id.

[xi] 18 U.S.C. § 208; 5 C.F.R. § 2635.402.