Here are some of the things that Reuters has reported over the past two months about Aubrey McClendon, chief executive officer of Chesapeake Energy, the second-largest natural gas producer in the U.S.:
Mr. McClendon borrowed $1.1 billion against his personal stake in company wells, ran a private $200 million hedge fund that invested in the same commodities that Chesapeake produces, secured a personal loan from a board director on Chesapeake’s compensation committee and presumably profited as Chesapeake kicked in $36 million in a sponsorship deal with the Oklahoma City Thunder, the NBA franchise in which Mr. McClendon is part-owner.
So we can say at the very least that the guy has displayed a willingness to play fast and loose with the whole notion of conflict of interest.
And now we can say that the same lack of regard for propriety, if not, you know, fiduciary duty, when it comes to managing and disclosing potential conflicts carries over to Mr. McClendon’s feelings for the Sherman Antitrust Act. You don’t really believe rules against bid-rigging were meant to apply to old Aubrey, do you?
From Reuters today:
In emails between Chesapeake and Encana Corp, Canada’s largest natural gas company, the rivals repeatedly discussed how to avoid bidding against each other in a public land auction in Michigan two years ago and in at least nine prospective deals with private land owners here.
In one email, dated June 16, 2010, McClendon told a Chesapeake deputy that it was time “to smoke a peace pipe” with Encana “if we are bidding each other up.”
The Chesapeake vice president responded that he had contacted Encana “to discuss how they want to handle the entities we are both working to avoid us bidding each other up in the interim.”
McClendon replied: “Thanks.”
Chesapeake and Encana, for what it’s worth, say they discussed forming a joint venture to explore the Michigan shale, but that explanation wouldn’t necessarily absolve either company of collusion charges.
Meanwhile, Chesapeake replaced half of its board last week, and named former ConocoPhillips CEO Archie Dunham to replace Mr. McClendon as board chairman. Shares are down more than 8 percent today on the news from Reuters, and 39 percent for the year, but that sort of small stuff doesn’t phase the man Forbes called “America’s most reckless billionaire.”
On the other hand, he’s probably thinking he poured the Petrus for the wrong news outlet, right?