(This was written before the news surfaced that McClendon died in a car crash this morning. My condolences go out to McClendon’s family.)
While Democratic presidential hopeful Bernie Sanders was all over the news Tuesday for his victory in the primary here in Oklahoma and deservedly so, the U.S. Justice Department made the stunning announcement that it had indicted local oil and gas wildcatter Aubrey McClendon for rigging lease prices from early 2007 to late 2012.
I’ll let my progressive friends parse through the meaning of Sanders’ victory here, but McClendon’s indictment represents something important about the oil and gas industry here and the overall Oklahoma economy, which continues to sink. Sanders’ victory here may or may not have greater meaning in terms of the state’s political climate. I’m unsure his victory means much on the national level.
For those of you old enough to live through the 1980s here as an adult, the McClendon indictment should trigger memories of the energy-related corruption that brought about the collapse of Penn Square Bank, which is still emblematic of those dark economic times in Oklahoma when the boom, as it always does, went bust.
Aubrey McClendon, Ex-Chesapeake C.E.O., Charged With Conspiracy in Gas Bidding https://t.co/FO93SIUj48
— DealBook (@dealbook) March 2, 2016
The cases are different, but the question is pertinent: Will McClendon’s case become the same type of historical marker of the folly, hubris and greed that seems to be as much of a part of the oil and gas industry here as all the oil pumpers dotting Oklahoma’s landscape?
Here’s The New York Times article about the indictment. Essentially, the indictment alleges McClendon, former CEO and founder of Chesapeake Energy, was part of a scheme in which “two oil and gas companies colluded not to bid against each other for the purchase of several leases in northwestern Oklahoma from late 2007 to early 2012.”
The companies weren’t named in the indictment, and McClendon has denied any wrongdoing. The leases in question are in or were in northwestern Oklahoma. The basic gist of the indictment is that the companies worked together to suppress prices paid to leaseholders, according to the article.
The Times article quotes William J. Baer, who is an assistant attorney general for the antitrust division of the Justice Department:
Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions.
What strikes me is the length of time the allegations cover.
The indictment is just one more jolt to the idea so often expressed here that the oil and gas industry is so vitally important to our state. Like many people, I’m sad for the people who have lost their jobs recently in the energy sector because of the worldwide slump in fossil field prices, but it could have been prevented through better fiscal management.