Billionaire Icahn Endorses Donald Trump as 'Business' Candidate

ICAHN LYFT

Billionaire activist investor Carl Icahn attends the Leveraged Finance Fights Melanoma charity event in New York on May 19, 2015.

Photographer: Victor J. Blue/Bloomberg
  • `Trump says he’s very serious and I believe him,' Icahn said
  • Fiorina unlikely `to withstand the scrutiny' of H-P record

Republican presidential candidate Donald Trump mentioned investor Carl Icahn as a potential Treasury Secretary, should he win. Now, Icahn is endorsing his fellow billionaire as the only campaigner speaking out on crucial business and economic concerns.

In a video posted on his new website Tuesday, Icahn criticized “the dysfunction that is going on both in Washington and the boardrooms of corporate America” and lambasted the U.S. Congress for failing to reform taxes or immigration. He backed Trump’s calls to strike tax deals to encourage corporations to bring back overseas profits and stay based in the U.S.; to end the carried interest tax discount for hedge fund and private-equity managers; and said the Federal Reserve is overdue in beginning to raise interest rates.

“You have this movement toward a guy like Donald Trump, because you want someone that’s not beholden to an establishment,” Icahn said in the video. “So we need a president that can move Congress and I think Donald Trump could do it. I disagree with him on certain issues, and certainly would talk to him more, but this is what this country needs -- somebody to wake it up.”

Carl Icahn: Trump Willing to Say What He Believes

‘He Understands’

When asked in a follow-up interview if this meant he endorses Trump, Icahn said yes:

“I would say it’s an endorsement. I think at this moment in time, he’s the only candidate that speaks out about the country’s problems,” Icahn said by phone. “I’m behind Trump. I disagree on certain points I don’t want to get into, I’m sure those can be worked out, but the basic thing is, you need somebody that can get things going in Congress, and I think he can do it. You need somebody that understands business, and I think he understands it.”

That raises the candidacy of Carly Fiorina, the Republican hopeful whose experience includes six years as chief executive officer at Hewlett-Packard Co., and whose face Trump has disparaged. Fiorina was fired from Hewlett-Packard in 2005 after disappointing results and the disastrous acquisition of Compaq.

“I really don’t think there’s anybody else there that does” understand business, he said. “You might argue Carly Fiorina, but I don’t think Carly Fiorina is going to withstand the scrutiny of what happened at Hewlett-Packard.”

Icahn also dismissed speculation that Trump is running for publicity rather than as a serious political candidate, saying the money and time Trump is spending shows he’ll run for president should he win the Republican nomination.

“Trump says he’s very serious and I believe him,” Icahn said in the interview. He dismissed the other contenders as unlikely to bring needed change to Washington. “I can’t think of any other candidate that’s going to be much different than what you have today.”

Treasury ‘Joke’

Icahn said he had dinner with Trump recently and had spoken to the Republican front-runner by phone three or four times in the past few weeks. Still, he dismissed any talk of being Treasury Secretary for a potential Trump administration, calling earlier online exchanges “a joke -- you know I’m joking around on that.”

In June, Trump suggested the former corporate raider could be his Treasury nominee. Icahn demurred, saying that while he was “flattered” -- as well as impressed by the real estate mogul’s comments on the Fed -- he doesn’t “get up early enough in the morning to accept this opportunity.”

Following the August Republican debate, Icahn lit up Twitter joking that after that discussion, “I decided to accept @realDonaldTrump offer for Secretary of Treasury.”

Icahn, 79, rebranded as an activist investor and outspoken shareholder advocate after gaining fame as a corporate raider in the 1980s. His Icahn Associates Corp. has in recent years taken stakes in companies including Apple Inc., Cheniere Energy Inc., Freeport-McMoRan Inc. and EBay Inc., agitating for shareholder-rewarding changes. In May he led a venture capital investment in car-hailing service Lyft Inc.

The New York-based investor is worth more than $20 billion, according to the Bloomberg Billionaires Index, and primarily invests his own fortune, rather than relying on money from outsiders. Trump claims he is worth $10 billion, a figure questioned by some.

No Joke

Icahn routinely bypasses standard press releases by tweeting his news and comments, and in 2013 started his Shareholders’ Square Table website to opine on corporate governance and whatever else is on his mind.

Last week, he stepped up this trend, starting www.carlicahn.com. His firm Icahn Enterprises LP issued a statement saying he would use both websites “as well as Tumblr, Facebook, Twitter” to communicate with the public.

In the video posted Tuesday, Icahn also reiterated his criticism of companies using financial engineering and cheap debt-fueled mergers to boost share prices; warned many corporations should invest in equipment and employee skills instead of buying back stock; criticized the Fed for creating bubbles by holding interest rates too low for too long; and called the expansion of high-yield debt exchange traded funds “amazingly risky.”

The Fed should have raised rates at least six months ago, Icahn said in the interview, calling the September decision not to begin hiking “a huge mistake.” Low rates and cheap debt are leading companies to borrow to do unwise deals and buybacks, he said.

The video includes highlights from Icahn’s July 15 debate with BlackRock Inc. CEO Larry Fink, whom he accused of peddling junk bond ETFs that Icahn has repeatedly warned risk becoming dangerously illiquid investments. 

His video includes a cartoon drawing illustrating Icahn’s punchline from that July event, depicting Fink and Fed Chair Janet Yellen pushing a low-interest party bus over a cliff, onto a big black rock. Fink said at the time that he disagreed with Icahn’s characterization.

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