Column, 619 words

Requiem for a Wrecking Ball

Fracking pioneer Aubrey McClendon epitomized the oil and gas industry’s destructive nature.

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Aubrey McClendon’s 2013 Chevy Tahoe ignited after he slammed into an Oklahoma City overpass at high speed. Flames charred the brazen oil and gas executive’s body so badly that medical experts relied on dental records to verify that he’d died.

One day before McClendon swerved to hit a concrete wall, a grand jury charged him with conspiring to rig bids for fracking leases. If convicted, the Chesapeake Energy Corp. co-founder could have spent a decade behind bars. It looks like he preferred suicide by SUV.

“Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions,” said Assistant Attorney General Bill Baer of the Justice Department’s antitrust division while announcing this unprecedented indictment on March 1.

McClendon’s comeuppance was overdue.

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Forbes Magazine

He was a Miley Cyrus businessman — a wrecking ball who blurred the lines between his own wealth and assets belonging to all Chesapeake shareholders. Both pools of money came from oil and gas fracking, the inherently destructive extraction method he championed.

Drilling by injecting water, toxic chemicals, and sand into the ground at a high pressure to fracture layers of rock has helped nearly double U.S. oil production and boosted natural gas output by 50 percent. It has also poisoned the environment, stoked climate change, triggered earthquakes, and made a small number of Americans filthy rich.

McClendon leveraged his earnings to buy a stake in Seattle’s basketball team and duplicitously transplant it to Oklahoma City. He collected homes in places like Bermuda and Vail, along with antique maps and boats. At one point, he possessed 100,000 bottles of fine wine.

The Oklahoman also splurged on his conservative political agenda, bankrolling right-wing candidates and helping to finance the misleading “Swift Boat Veterans for Truth” attack ads that contributed to Democratic presidential nominee John Kerry’s 2004 defeat.

He was also a self-serving philanthropist who gave the Sierra Club $25 million to support its anti-coal campaign. To its credit, the Sierra Club rejected his donations — which McClendon treated as an investment in boosting natural gas demand — after 2010.

McClendon topped the AP’s list of the nation’s highest-paid CEOs in 2008, when his compensation totaled $112.5 million even as Chesapeake’s shares plunged 60 percent. Under his leadership, the company barely paid federal corporate taxes and became a leading purveyor of junk bonds.

Chesapeake’s board booted McClendon in 2013 after the Reuters news service revealed that he’d treated the company’s coffers like his own piggy bank and made its employees work on his private ventures. Among those side business was a $200 million hedge fund that reaped profits when Chesapeake’s stock fell.

Once the energy company made McClendon walk the plank, he boarded a golden yacht. Chesapeake gave its fired CEO 33 installments of $112,500, followed by a lump sum payment of $7.2 million and other gilded perks, according to Bloomberg.

He launched a new fracking company called American Energy Partners. But the 56-year-old former billionaire’s fortune was already dissipating when he perished, partly because of the collapse in oil and gas prices fracking brought on.

The government has reportedly chosen to dismiss its indictment of McClendon while continuing to investigate whether the oil and gas industry is systematically ripping off landowners by rigging the bidding process for fracking leases. Chesapeake says the feds have granted it immunity.

In the days following its co-founder’s death, the company’s beaten-down shares rallied.

“The knowledge that the executive would no longer be able to exercise his influence on the company may very well have been a weight off investors’ minds,” observed Fortune’s Jen Wieczner.

McClendon was apparently worth more to Chesapeake’s shareholders dead than alive.

Columnist Emily Schwartz Greco is the managing editor of OtherWords, a non-profit national editorial service run by the Institute for Policy Studies. OtherWords.org.

  • Jerry Hirsch

    “Money ain’t for nothing …Jus let me be” Must have part of his Brain Destroyed,Hopefully!