Last month, corporate raider Carl Icahn sold off a large chunk of his holdings in a Wisconsin manufacturer of construction equipment. That wouldn’t be news in and of itself, but this massive stock dump came just a week before Donald Trump announced he was imposing massive tariffs on steel imports. Icahn has been a confidant of Trump for some time, and even briefly served as a special White House adviser on economic matters.
That construction company, and many others heavily dependent on steel, saw its stock get pulverized in the wake of the planned tariffs. Since then, a lot of people have if Icahn’s timing was too exceptional to be legitimate–including a number of Democratic lawmakers.
On March 2, ThinkProgress reported that from February 12 to February 22, Icahn sold off nearly one million shares in Manitowoc Company, a major crane manufacturer. At the time, Manitowoc was trading at between $32 and $34 a share. At that price, Icahn made out like a bandit, selling his stock for $31.4 million.
Trump’s announcement about the tariffs on February 28 sent Manitowoc’s stock into free fall; it lost about six percent of its value. It lost another six percent by the end of the week. As of the close of business on Friday, it is trading at $29.97 a share–a modest recovery, but still a little over $4.30 a share less than where it stood when Icahn first started unloading his stock.
There are a number of reasons why this sale smells like a fish decaying in the moonlight. For one thing, Icahn started selling his stock some four days before the Commerce Department recommended a 24 percent tariff on steel imports. For another thing, it represented the first time Icahn bought or sold Manitowoc stock in over three years. And of course, there is the close relationship between Trump and Icahn.
Duke Law professor James D. Cox, a leading expert on insider trading and corporate governance, believes that Icahn’s trading activity looks “awfully suspicious.” He believes the FBI or SEC ought to look into whether Icahn had “material nonpublic information” about the planned tariffs. According to Cox, under current insider trading law, if Icahn had information from the White House that gave him “a better insight of the possibility, if not the likelihood” that Trump was going to greenlight the tariffs, it wouldn’t matter if he knew the exact date–his trading would have been illegal.
Icahn himself adamantly denied any wrongdoing, via a statement from his firm.
In response to inquiries, we released the following statement regarding The Manitowoc Company, Inc. ($MTW) – https://t.co/u1PQQYZo3Y
— Carl Icahn (@Carl_C_Icahn) March 7, 2018
Icahn went on to say that the trades were for “legitimate investment reasons.”
Hogwash, said Cox. He believed it was no different from a bank robber being busted with a bagful of cash and claiming, “I have all this cash because I found it on the street.” Cox conceded this may very well be the case, but the circumstances still demand an investigation.
Several Democratic lawmakers aren’t buying it either. Congressman Frank Pallone of New Jersey, ranking Democrat on the House Energy and Commerce Committee, teamed up with Congressman Elijah Cummings of Maryland, ranking member of the House Oversight Committee, and Senators Elizabeth Warren and Sheldon Whitehouse to demand answers about the trades. In letters to Icahn, the White House, Ross, and U. S. Trade Representative Robert Lighthizer, the lawmakers sought details about any non-public communications between Icahn, the White House, the Commerce Department, and the Office of the Trade Representative.
So far, the White House’s response has been curious, to say the least. At Friday’s press briefing, Fox Business Network’s Blake Burman asked Press Secretary Sarah Huckabee Sanders when Trump last spoke with Icahn. Watch here.
The Princess of Lies’ reply amounted to word salad. She said that she didn’t know about “any recent conversation” between Trump and Icahn, but needed to “verify” that information.
ABC News’ Jon Karl asked a similar question to Deputy Press Secretary Raj Shah on Sunday’s edition of “This Week.” He got a similar response. Watch here.
Shah said that he didn’t “know of any call.” But like Sanders, he didn’t offer a categorical denial.
So let’s review. A longtime confidant of Trump takes home some serious loot after unloading stock in a company heavily dependent on steel. He does so just days before Trump announces tariffs on steel that cause that company’s stock to lose some 12 percent of its value in the days after the announcement.
Granted, there may be an innocent explanation for this. But under the circumstances, this is firmly in “what did Icahn know, and when did he know it?” territory.
(featured image courtesy Icahn’s Facebook)