Chesapeake Energy’s Ex-CEO Killed in Car Crash

     
     OKLAHOMA CITY (CN) – Former Chesapeake Energy CEO Aubrey McClendon died in a single-car crash Wednesday, a day after being charged with conspiring to rig bids on oil and gas leases.
     McClendon crashed into an embankment while traveling at “a high rate of speed” in Oklahoma City just after 9 a.m. Wednesday, according to Oklahoma City Police Department Capt. Paco Balderrama.
     The vehicle burst into flames and was burned so badly investigators could not tell if McClendon was wearing a seatbelt.
     “He pretty much drove straight into the wall,” Balderrama said, adding that it would take one to two weeks to determine exactly what happened.
     McClendon’s death comes a day after federal prosecutors charged him with one count of conspiring to rig bids, in violation of the Sherman Act. If convicted, he could have faced up to 10 years in federal prison and a $1 million fine.
     More than 800 civil lawsuits have been filed against Chesapeake Energy in the past three years, most of them accusing the company of underpaying property owners for oil and gas royalties, according to the Courthouse News database.
     Founded by McClendon in Oklahoma City in 1989, Chesapeake is the second-largest natural gas producer in the country. It expanded its business through hydraulic fracturing, or fracking, in major domestic shale formations, including the Marcellus Shale, spanning from West Virginia to New York, and the Barnett Shale in North Texas.
     According to the federal indictment, he “orchestrated a conspiracy” with another oil and gas company “to not bid against each other” for leases in northwest Oklahoma from December 2007 to March 2012.
     “The conspirators would decide ahead of time who would win the leases,” prosecutors said in a statement Tuesday evening. “The winning bidder would then allocate an interest in the leases to the other company. McClendon instructed his subordinates to execute the conspiratorial agreement, which included, among other things, withdrawing bids for certain leases and agreeing on the allocation of interests in the leases between the conspiring companies.”
     Assistant Attorney General Bill Baer said McClendon put company profits ahead of leaseholders who should have received competitive bids for oil and gas rights.
     “Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions,” Baer said.
     The leases typically give companies the right to drill for oil and natural gas under a property for three to five years.
     Chesapeake said it is “actively cooperating” with the Justice Department’s criminal antitrust investigation.
     “Chesapeake does not expect to face criminal prosecution or fines relating to this matter,” spokesman Gordon Pennoyer said Tuesday evening. “Chesapeake has taken significant steps to address legacy issues and enhance legal and regulatory compliance throughout the organization.”
     McClendon also co-owned the National Basketball Association’s Oklahoma City Thunder, which plays its home games at Chesapeake Energy Arena.
     The Justice Department’s antitrust division said it was “saddened” to hear of McClendon’s death and offered its condolences to his family.
     Chesapeake said in a statement that it was “deeply saddened by the news,” and McClendon’s new company American Energy Partners said it would “continue to work hard to live up to the unmatched standards he set for excellence and integrity.”
     McClendon had denied the antitrust charges against him.

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