There are troubling parallels between Trump and Icahn, who used his charity to turn a profit while enjoying massive tax savings.
By George Joseph, AlterNet
Most people know Carl Icahn as a real-life Gordon Gekko—the investor who helped drive Trans World Airlines to bankruptcy, selling the company’s prime routes and saddling it with debt, while pocketing millions for himself. Today, Icahn is once again in the national spotlight with Donald Trump, his former business associate, floating the possibility of making him Treasury Secretary.
Like Trump, Carl Icahn has also named a school after himself—seven charter schools in New York City to be exact (Icahn Charter School 1, Icahn Charter School 2, Icahn Charter School 3, etc.). And as with Trump University, the money trail suggests the organization running these schools may have served to enrich its billionaire founder, Icahn, at the expense of its own students. An AlterNet investigation finds that Carl Icahn appears to have treated his charity like a personal piggy bank, using it to make potentially tens of millions for himself while benefiting from tens of millions in tax deductions.
In 1997, Carl Icahn made a $100 million tax-deductible “contribution” to his public charity, the Foundation for a Greater Opportunity, scoring about a $45 million income tax reduction, according to an estimate by Gregg Polsky, a law professor at UNC. In January 2006, Icahn’s foundation suddenly sold back the stock gift to an Icahn corporation, Modal LLC. The $100 million gift in American Railcar Industries Inc. shares was conspicuously sold three days before the company was to go public, a process that often sparks a short-term hike in share value. The convenient date of the sale strongly suggests Icahn knew his limited liability corporation, rather than his educational charity, would make a killing off the public offering.
Three days after the sale was inked, American Railcar Industries went public, opening at $23.60 a share and jumping up almost 40 percent in a month. As of 2016, Icahn holds a majority stake in ARII and the company’s shares are up nearly 70 percent more than when Icahn reacquired them. Thus, even if his LLC held onto his foundation’s former shares, rather than selling in the initial surge, Icahn would be in line for tens of millions in profit.
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