Chesapeake Energy Ex-CEO McClendon Indicted

March 2016, Vol. 243, No. 3

OKLAHOMA CITY (AP) — Aubrey McClendon, the former chief executive of Chesapeake Energy Corp., was indicted Tuesday on a charge of conspiring to rig bids to buy oil and natural gas leases in northwest Oklahoma.

The Department of Justice said in a statement that McClendon is suspected of orchestrating a scheme between two large energy companies, which are not named in the indictment, from December 2007 to March 2012. The companies would decide ahead of time who would win bids, with the winner then allocating an interest in the leases to the other company, according to the statement.

McClendon denied violating antitrust laws in a statement released Tuesday.

“The charge that has been filed against me today is wrong and unprecedented,” McClendon said in the statement. “Anyone who knows me, my business record and the industry in which I have worked for 35 years, knows that I could not be guilty of violating any antitrust laws. All my life I have worked to create jobs in Oklahoma, grow its economy, and to provide abundant and affordable energy to all Americans. I am proud of my track record in this industry, and I will fight to prove my innocence and to clear my name.”

The indictment, filed in U.S. District Court for the Western District of Oklahoma, does not name anyone else alleged to be involved.

Leasehold interests usually include the right to develop the land and to extract oil and natural gas for a period of time, typically three to five years.

“His actions put company profits ahead of the interests of leaseholders entitled to competitive bids for oil and gas rights on their land,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division. “Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions.”

Oklahoma City-based Chesapeake said it is cooperating with the investigation.

“Chesapeake does not expect to face criminal prosecution or fines relating to this matter,” company spokesman Gordon Pennoyer said in a statement. “Chesapeake has taken significant steps to address legacy issues and enhance legal and regulatory compliance throughout the organization.”

McClendon, part-owner of the NBA’s Oklahoma City Thunder, stepped down in 2013 at Chesapeake and founded American Energy Partners, where he currently serves as chairman and chief executive officer.


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